The Growing Weakness of the Crandon Mine ProjectPublished by MAC on 2002-06-04
The Growing Weakness of the Crandon Mine Project
The legal and technical challenges ahead for the proposed Crandon mine are numerous. Even without factoring in the technical hurdles to gaining mine permits, recent financial, legal and regulatory developments make it clear that the latest attempt to open a mine at this pristine site is likely to fail. The mine is proposed by the Nicolet Minerals Company, a wholly owned subsidiary of the Australian/South African mining conglomerate BHP Billiton--now the world's largest mining company.
It is time to face the obvious. Metallic sulfide mining at the headwaters of the Wolf River is unlikely to be permitted by the state or federal governments.
The proposed mine is opposed by the people of the area and of people from around the state who come to vacation, to fish, to canoe, to relax.
1. The Crandon Mine is an increasingly risky investment
Zinc and copper prices have reached historic lows in the last year. BHP Billiton reported a 33% drop in profits for its most recent quarter (Dec. 2001-Feb. 2002). Weak copper prices pushed earnings from its base metals division down by more than one half compared to the same period a year earlier.
BHP Billiton shut down its operating Arizona copper operations at the beginning of this year, and has recently begun significant cuts of copper outputs in its South American operations, including Peru and Chile.
Even if a Crandon permit were issued, the depressed state of metals prices has led to the closure of other mines around the world. The proposed Crandon mine is not economically viable.
The mining company wrote the project down to zero on its books in 1999, and in 2001 declared the project a "non-core asset." On June 19, 2002, BHP Billiton announced the sale of its only remaining operation in the U.S. (Wyoming's Smith Ranch uranium mine) "...as part of its planned divestment of non-core businesses."
2. The Wisconsin public increasingly opposes the Crandon mine
New public relations efforts to educate the public about the mine's potential impacts have reawakened the public, the media and public officials to the threats of the mine. NMC's inability or refusal to respond in kind to a statewide $250,000 ad campaign for the cyanide ban legislation is a strong signal that the project funding is unstable.
Statewide polling data proves that the longer the mine permitting controversy continues the more state residents oppose it and support mining law reform. Polling data from last summer showed the majority of state residents oppose the mine and strongly support mining law reforms such as the cyanide ban for mining and the closure of loopholes giving the mining industry special treatment. The numbers increased in northeastern Wisconsin, closer to the proposed mine site. http://www.alphacdc.com/treaty/poll.html
The state Conservation Congress, whose mission is to advise the Department of Natural Resources on policy issues, has twice voted overwhelmingly to oppose the use of cyanide in mining, and many local governments, conservation groups and unions have passed similar resolutions.
3. Recent legal and regulatory developments render the project more difficult
The DNR has rejected the mining company's single example of a mine that had been operated and closed for 10 years -- a requirement that must be met under Wisconsin's Mining Moratorium Law. The DNR's rejection of the Sacaton mine in an Arizona desert as a proof that mining can be conducted safely in a Wisconsin wetland environment is a major victory for mine opponents.
The U.S. Supreme Court upheld the right of the Sokaogon Chippewa to adopt water regulations that have an impact on upstream, off-reservation activities - specifically the proposed mine. The right of the Chippewa to protect the resources of Swamp Creek and Rice Lake from the impacts of the mine creates tough new challenges for any mining applicant.
Although the cyanide ban and no special treatment bills were blocked in the Assembly Environment Committee, both bills were passed by the State Senate, and attracted widespread bipartisan support in the Assembly. Both bills will be reintroduced in the next legislative session.
4. The mine as proposed will be unlikely to receive permits
NMC's most optimistic predictions show that the mine will violate state groundwater regulations when mining halts and the mine is reflooded with groundwater. NMC's own predictions show violations of state groundwater standards at the compliance boundary in all portions of the bedrock and groundwater. DNR-directed modeling of contaminates from the mine shows even greater contamination of the groundwater.
NMC's method for containing contaminants requires perpetual pumping of groundwater at the mine site. The contaminated groundwater would need to be treated at a wastewater treatment plant and discharged. The company assumes that contaminated groundwater can be pumped from the reflooded ore body forever.
State modeling of contaminates traveling from the Tailings Management Area (TMA) shows violation of groundwater standards at the compliance boundary (edge of the regulated mine area). These predictions assume that the TMA cap will be replaced approximately every 100 years forever. NMC calculations of TMA compliance with state groundwater standards unrealistically assume, among other things, that the TMA cap will be maintained and replaced forever. Air modeling by the state shows that NMC will be in violation of air standards for Total Suspended Particulates. The federal Environmental Justice Doctrine, as well as the fiduciary responsibility of the U.S. Army Corps of Engineers, to protect cultural resources of American Indian tribes in the area create significant impediments to issuing permits for any mining applicant at this site.
Mine opponents have retained a cadre of expert witnesses that are first class in the following areas: mining, solid waste, structural stability, air emissions, groundwater/surface water, wetlands, urban planning, etc. These experts provide important "fire power" in raising technical and legal issues in the federal and state permitting cases.
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