TED Case Studies

The Summitville Mine

Summitville, CO in October 1993 Aerial photo by Intra Search Inc.

CASE NUMBER: 338

CASE MNEMONIC: SUMMIT

CASE NAME: Summitville Mine

I. Identification

1. The Issue

The Summitville Mine in southwestern Colorado is a Superfund site of the federal Environmental Protection Agency. The EPA took over supervision of the mine at the request of Colorado mining regulators after the most recent operator of the 1,400-acre gold and silver mine, Galactic Resources Ltd. of Canada, walked away from the site and filed for bankruptcy late in 1992, leaving behind acid mine drainage and a 160-million-gallon containment filled with cyanide-laden water that threatened to spill over the earthen berm holding it back. (1)

It is estimated that the restoration of the site to an environmentally acceptable state will cost $120 million. (2) Attempts to garner some portion of those costs from Galactic Resources Ltd. thus far have been unsuccessful, though the firm's former chairman, Robert Friedland, is involved in a number of other mining ventures around the world and is reported to be worth at least $400 million on paper as a result of one venture in eastern Canada.(3) Friedland has contended that he cut his ties with Galactic prior to its bankruptcy and maintains that he has no knowledge of the environmental problems at the Summitville site.(4) According to records obtained by The Denver Post, Friedland is a subject of a federal grand jury probe of the Summitville pollution. A grand jury in 1995 indicted two former mine managers; a guilty plea was entered to charges of 40 environmental crimes from Summitville Consolidated Mining Co., the mine's corporate owner.(5)

2. Description

Though the Summitville site had been mined for gold and silver for decades following the discovery of gold in 1870, Vancouver-based Galactic Resources began its work on the site in the early 1980s.(6) With a permit from Colorado mining regulators, the corporation prepared the high alpine site for a "heap- leach" operation in which tons of crushed ore were placed in a pit atop a vinyl liner. The ore heap then was surrounded by an earthen berm, and a solution of water and cyanide was sprayed over the heap, removing gold molecules into the solution as it seeped through the pile. The resulting solution then was piped to a separate location on the site where the gold was chemically isolated and the cyanide solution recaptured for reuse.(7)

State mining regulators became aware that cyanide solution was leaking through the vinyl liner. Despite fines against Galactic, at least a dozen different cyanide spills totaling more than 86,000 gallons entered Cropsy Creek, one of the waterways at the top of the drainage that leads to the Alamosa River and eventually to the Rio Grande.(8)

In 1990, regulators noted that trout in three farm ponds that took in water from the Alamosa were killed and also noted the death of 15,000 young trout stocked by the state in the Terrace Reservoir downstream from Summitville.(9) Though threats of further action against the mine's operators continued and the EPA began to propose involvement, some 294,365 ounces of gold and 319,814 ounces of silver worth more than $113 million at current spot-market metals prices were mined before events reached a crisis point late in December, 1992.(10)

Early in December 1992 -- just days after informing state regulators that the mine would require at least $20 million to clean up -- Galactic announced it was filing for bankruptcy. The figure it had cited exceeded the bonds it had posted with state mining regulators by more than $15 million.(11)

When the EPA arrived at the site December 8, the level of cyanide solution in the 127-foot-deep containment around the leach pad was within five feet of the top of the earthen berm that held it back.. Further, EPA officials found six leak sites at the mine releasing 3,000 gallons of potentially toxic fluids per minute.

By hiring 55 workers immediately, EPA was able to prevent the overtopping of the berm and keep pipes from freezing and pumps from failing as the high alpine site weathered the attack of a particularly snowy winter in one of the snowiest locations in the Colorado Rockies.(12)

Though EPA initially estimated the cost of cleanup at about $60 million, that figure has risen to nearly twice that sum in the more than three years the agency has been containing contamination there. Costs have at times reached $40,000 a day.(13) Chemical reduction of the cyanide solutions has continued, along with work to dam two mine drains, or "adits," that were releasing large amounts of acidic ore filtrate laden with heavy metals from the heavily mined mountain overlooking the operation.(14)

EPA regulators have concluded that acid mine drainage into Cropsy Creek and Wightman Fork is the largest environmental threat and have long-term plans to attempt to "cap" the ore piles with a water-repellent clay layer that will reduce the percolation of rain and snowmelt through the fractured ore.(15)

There was substantial concern that cyanide compounds or acid mine drainage would harm crops or livestock in the Alamosa River Valley below Summitville. Cattle and sheep are raised there along with barley used in brewing, alfalfa used for livestock feed, wheat, and potatoes. Further, the area offers aquatic significant wildlife habitat to species including ducks and the endangered whooping crane.(16)

However, a series of studies carried out by the U.S. Geological Survey suggest that no serious threat has been posed by the Summitville leakages thus far, though elevated levels of iron, aluminum, copper, manganese and zinc are carried into the watershed by the acidic runoff. It is some of the most acidic water in the state, with a pH generally below 3. Two natural reasons for such loading of the watershed with no major ill effect to date come, ironically, from the chemical reactions that occur when cyanide solutions mingle with acid mine drainage: sometimes hydrogen cyanide is formed, which volatilizes into the atmosphere, and in other cases metals suspended in the AMD combine with cyanide to form compounds which degrade with exposure to sunlight.(17)

3. Related Cases

COPPER case BOLGOLD case
BRAGOLD case
GHANGOLD case
YELLOW case

Keyword clusters

(1): Trade Product = GOLD

(2): Bio-geography = TEMPERATE

(3): Environmental Problem =POLLUTION LAND

4. Draft Author:

Jennifer Gavin (July, 1996)

II. Legal Clusters

5. Discourse and Status:

DISagree and INPROGress

6. Forum and Scope:

USA and Bilateral

Though the environmental problem resides entirely within the United States and is addressed through U.S. state and federal law, efforts have been made to access the corporation that used the heap-leach system at the mine through the Canadian legal system as well.(18)

7. Decision Breadth:

1 (United States)

8. Legal Standing:

LAW

The mine became a "Superfund" site as provided by federal law; it also is subject to state mining regulations.

III. Geographic Clusters

9. Geographic Locations

a. Geographic Domain: North America [NAMER]

b. Geographic Site: Western North America [WNAMER]

c. Geographic Impact: USA

10. Sub-National Factors:

YES

11. Type of Habitat:

COOL

IV. Trade Clusters

12. Type of Measure:

ADMINISTRATION

13. Direct v. Indirect Impacts:

DIRect

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product: YES, Gold

b. Indirectly Related to Product: NO

c. Not Related to Product: NO

d. Related to Process: YES, Land Pollution

15. Trade Product Identification:

Gold

16. Economic Data

17. Impact of Trade Restriction:

18. Industry Sector:

MINING, METAL

19. Exporters and Importers:

One corporation, many

V. Environment Clusters

20. Environmental Problem Type:

SOURCE: HABITAT. Pollution, land and water [POLL]

21. Name, Type, and Diversity of Species

Alpine and subalpine flora, ducks and whooping cranes, freshwater fish, farmed animals and crops

22. Resource Impact and Effect:

LOW and REGULatory

Extensive scientific study of possible effects of Summitville Mine releases on the alpine environment and on downstream water users in the Alamosa River Valley have been conducted since 1993 by a consortium of agencies including the U.S. Geological Survey , the State of Colorado, the EPA, the U.S. Fish and Wildlife Service, Colorado State University and some private interests. The results were presented at a forum at CSU in January, 1995.(19)

Analysis of crops including those grown in the area for livestock feed, ring analysis of trees along the Summitville drainage and wetlands studies have led to the conclusion that heavy metals carried in the mine's highly acid drainage as yet pose no threat to people, flora or fauna, though the runoff water contains concentrations of copper that reach levels potentially hazardous to sheep. (20)

"Extreme acid rock drainage, rather than cyanide releases, is the dominant long-term environmental concern at Summitville," wrote Robert C. Bigelow of USGS' Denver office. "Extensive remedial efforts will be required to minimize (rock) weathering and dissolution of unweathered sulfides and soluble metal salts." Bigelow also notes that "It is likely that natural contamination adversely affected water quality and fish habitat in the Alamosa River prior to mining, and will continue to have adverse effects even when acide drainage from Summitville is remediated. Thus, realistic geochemical baselines for the Alamosa River basin must be defined."(21)

23. Urgency of Problem:

MEDium

This site posed a high urgency early in the intervention phase when a massive cyanide spill could have occurred. Now that pollution source is controlled and other pollution in the form of acid mine drainage is in the process of being abated, though it probably will never be completely halted. Urgency could rise again if the budget of the federal agency controlling these releases, the EPA, is cut.

24. Substitutes:

NONE

In addition to its utility as an ornament and repository of value (i.e., coinage) dating back centuries, the element gold has some properties relating to its purity and conductive behaviors that make it currently indispensable in certain technical manufacturing processes.

VI. Other Factors

25. Culture:

YES

Hard-rock mining is an economic activity with deep roots among many of Colorado's mountain denizens, particularly in towns where harsh weather and remoteness from urban centers can make eking out a living difficult. Some residents of the area near the mine have complained that government regulation is making mining uneconomic or suggested that concerns about metals in the watershed are much ado about nothing.(22) In 1995, owners of the land on which the Summitville Mine is located sued the government, alleging that EPA plans to cap ore piles and seal various adits and shafts would make future mining there difficult or impossible, and therefore constituted a "taking" of their property without just compensation.

26. Trans-Boundary Issues:

YES

Pollution runs from Cropsy Creek and Wightman Fork into the Alamosa River and thence to the Rio Grande, which crosses three states and borders Mexico. However there is no evidence as yet of pollution damage from this source outside Colorado.

27. Rights:

YES

The Summitville situation poses human rights issues in two senses: first, that the governments overseeing the area have an obligation to protect neighboring citizens from hazardous pollutants and secondly, in the question of the right of Canadian citizens to have access to information about a Canadian corporate entity's actions or alleged actions in another nation. In fall of 1993, a Canadian judge issued an order barring Canadian journalists from broadcasting or publishing stories about Robert Friedland and his alleged ties to the Summitville problems. The Canadian Broadcasting Corp. had been preparing an investigative report. But when U.S. and Canadian citizens asked for reprints of an article about Summitville from The Denver Post, the newspaper faxed or mailed out hundreds of copies of the piece.(23)

28. Relevant Literature

(1) Robert C. Bigelow and Geoffrey S. Plumlee (U.S. Geological Survey), "The Summitville Mine and its Downstream Effects," undated. Alta Vista online, World Wide Web, June 10,1996.

(2) Ibid.

(3) Mark Obmascik, "Mine Disaster Worsens to Tune of $33,000 a Day," The Denver Post February 21, 1993 p. 1A.

(4) Jennifer Gavin, "Summitville Mine Remains one of State's Costliest Sites," The Denver Post June 25, 1995 p. A16.

(5) Mark Obmascik, "Summitville Firm Guilty," The Denver Post May 3, 1996 p. A1.

(6) Bigelow and Plumlee, Ibid.

(7) Ibid.

(8) Obmascik, Ibid.

(9) Ibid.

(10)Mark Obmascik, "Feds Launch Criminal Probe of Summitville" The Denver Post January 26, 1994 p. B5.

(11)Mark Obmascik, Mine Disaster Worsens to Tune of $33,000 a Day," Ibid.

(12) Ibid.

(13) Janet Day, "Colorado Looks to Mine to Set Pace," The Denver Post, October 31, 1993 p. 1A. (14) Jennifer Gavin, Ibid.

(15) Bigelow and Plumlee, Ibid.

(16) Ibid.

(17) Ibid.

(18) Jennifer Gavin, Ibid.

(19) Bigelow and Plumlee, Ibid.

(20) Ibid.

(21) Ibid.

(22) Janet Day, "Miners, Others Wrangle Over Rules to Prevent Summitvilles," The Denver Post March 24, 1994 p. C1.

(23) Joanne Ostrow and Tracy Seipel, "KCNC Caught in Canadian Censor Flap" The Denver Post December 3, 1993 p. A1.


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