Mining legal battle brewing

Environmental watchdogs in Nevada and three other states plan to file suit today in federal court to close a loophole they say allows mining companies to skip out on costly cleanups by declaring bankruptcy.

Reno-based Great Basin Resource Watch and conservation groups in Idaho, Illinois and New Mexico want tighter federal controls on the bonds companies must put up to cover the cost of mine closure and restoration activities.

Earthjustice, the legal defense fund for the Sierra Club, will file the lawsuit on behalf of the groups.

Environmentalists claim that old mine sites across the country have not been cleaned up properly because the companies responsible for them went out of business or were bonded insufficiently.

The main example cited in Nevada is the Paradise Peak Mine near Gabbs in northwestern Nye County. Arimetco Inc. operated there until 1997 when it filed for bankruptcy protection in Arizona, casting doubt on nearly $3.5 million in unsecured bonds for reclamation work at the mine. By some accounts, the cleanup could cost as much as $50 million.

"It's the poster child for bad bonding practices," said Glenn Miller, a chemist and professor of natural resources and environmental science at the University of Nevada, Reno.

Miller helped found Great Basin Resource Watch, then known as Great Basin Mine Watch, in 1994. He said he is not so worried about large mining companies such as Newmont and Barrick, which have "worldwide reputations to protect" and are unlikely to shirk responsibilities. Far more problematical are what he called the "nickel and dime, small mining companies."

But Mark Amodei, executive director of the Nevada Mining Association said state regulations were strengthened some time ago.

"They are not filing (the lawsuit) in Nevada to close a loophole here ... because Nevada law is considered a model for reclamation bonding," Amodei said. "If the feds want to imitate that, we'd be happy to have them do it."