MAC: Mines and Communities

From small town poisoning to mega-buck deal

Published by MAC on 2009-10-19

"Bankrupted" Asarco could compensate for Buchans' disaster

Last week, this website asked why a huge US copper miner is apparently escaping responsibility for recently-revealed pollution at a Canadian township, called Buchans, where it had operated for sixty years. See:

It's true that the culprit company, Asarco, filed for bankruptcy in 2005.

But that's hardly an end to the story, nor to Asarco's culpability for the likely poisoning of hundreds, if not thousands, of Buchans' residents and ex-workers.

Within the next six weeks a US District Judge should make a final ruling on which of two reputationally-defunct outfits, Grupo Mexico or Sterlite Industries (owned by Vedanta Resources plc), will be allowed to take over Asarco.

Whichever company wins, it must settle asbestos-related cases brought by many thousand former Asarco workers in the US, through a prescribed compensation fund.

As of now, however, it doesn't seem that anyone is advocating a similar case be levelled against Asarco on behalf of the hapless citizens of Buchans.

It's not that Asarco doesn't (at least in theory) have money in the bank.

In fact, over the past four years, Asarco has made a profit of about US$1.54 billion of revenues of $5.47 billion.

The Texas-based copper king operates five mining-related sites. Just last month a worker died at one of these, while a year ago the death of another was laid by the US mine safety department at Asarco's door.

According to one Canadian journalist, rumours are currently circulating in Buchans that, following its takeover by Grupo Mexico or Vedanta/Sterlite, Asarco may return to the township of Buchans, picks in hand.

"Not on my life!"- do we hear some residents declare?

[Comment by Nostromo Research, 17 October 2009]

Asarco Case enters final round

Tim Steller, Arizona Star

13 October 2009

The final stage of the courtroom battle to take over Asarco LLC, the Tucson-based copper producer, will start Oct. 19 in Brownsville, Texas.

That day, U.S. District Judge Andrew S. Hanen will entertain arguments about whether he should accept bankruptcy Judge Richard Schmidt's advice and give Asarco back to its formal owner, Grupo Mexico. The state of Arizona is likely to weigh in against Schmidt's recommendation. In a Sept. 29 filing, Assistant Attorney General Rick Zeise argued that Grupo Mexico's plan would saddle Asarco with too much debt, putting the company at risk for another bankruptcy.

Instead, Zeise said, Hanen should accept Indian company Sterlite Industries' plan for taking Asarco out of bankruptcy. Sterlite itself, as well as Asarco and the United Steelworkers, which represents most Asarco workers, have also filed arguments against Grupo Mexico's plan and for an amended plan Sterlite filed after Schmidt made his Aug. 31 recommendation.

Grupo Mexico has also filed a lengthy argument that Hanen should rule in its favor, saying that its plan is more financially sound and that legal arguments against it are baseless. Hanen is expected to rule by the end of November.

He is making the final ruling, instead of the bankruptcy judge, because both plans to take Asarco out of bankruptcy would require an injunction forcing people with asbestos-related claims into a prescribed fund for paying out those claims - and a bankruptcy judge can't issue such an injunction. Whoever emerges with the company will take on a company that is making steady profits.

In its monthly report for August, filed Sept. 30, Asarco reported it made about a $40 million profit on revenue of about $100 million. That was way up from July's results: A $24 million profit on $76 million in revenue.

Since filing for bankruptcy protection in August, 2005, Asarco has made a profit of about $1.54 billion, while pulling in revenue of $5.47 billion.

Asarco is the third-largest dedicated copper producer in the U.S., and the company has interest in five mining or milling sites in Montana, including the Black Pine Mine near Philipsburg, the Troy Mine near Noxon, the Mike Horse complex, the East Helena smelter and the Continental Pit in Butte.

Defunct for 20 years, Buchans NF mine source of toxic pollution

By Stephanie Dearing, Digital Journal

12 October 2009

This small town with a population of just under 900 people has always been a mining town since its inception in 1928. The mine hasn't been operational since 1984, but recently residents learned that the past is still actively with them today.

Buchans' richly controversial history is has just taken another dark twist. Residents of Buchans, Newfoundland had been asking for the mine to be cleaned up since it closed in the late 1980s. Last year the town residents met with the province and former mine owners, AbitibiBowater. In that meeting, officials revealed that there had never been an assessment of the risk to human health from the abandoned mining operation. Said Mayor Derm Corbett, "We, the residents of Buchans, speak with one voice in saying that you have failed us."

With pressure from the angry townsfolk, soil tests were taken this past summer. Last week, a year after learning that the corporation and province was not working to safeguard their health, Buchans residents learned that they have been - and continue to be - exposed to ten different toxins. The toxins are left-overs from the mines that used to operate in the area.

The ten toxins include lead, arsenic, uranium and copper. The population of 877 has been advised to get their blood tested for the pollutants after being told they have been breathing contaminated dust.

Residents are worried, but are trying to be pragmatic. Derm Corbett, said "There has never been a case of lead poisoning reported from our community. In all likelihood, the results of any blood work ... are likely to indicate we're not dealing with a serious problem."

Resident Jeremy Chippett told the Globe and Mail

"Ever since I've grown up we've always had these issues ... it was just a part of life here. It's no great surprise to me or anybody else in town."

Newfoundland officials, such as the Environment Minister, have been downplaying the health threat. The Ministry of Environment issued a statement in which Minister Charlene Johnson said "... While this data is preliminary, it allows us to inform the town so appropriate measures can be taken to reduce their exposure while additional testing is ongoing. While several of the heavy metals tested in the Buchans area have exceeded the recommended guidelines, it does not necessarily mean the soil is dangerous or that there is a health hazard."

The Ministry of Environment issued an eight page document outlining the test results and providing advice on how to reduce ingestion of lead. Further soil testing will be carried out, particularly around the school. Because the mines' original owners are bankrupt, the government has said it will clean up the mine tailing spill area, suspected to be the key source of contamination. Lead is the contaminant of greatest concern for the government. It is anticipated that the clean-up will take place in the spring of 2010.

Known as Lucky Strike, the mine was a prime source of lead, zinc, copper, silver and gold. The productive mine produced over 16 tons of high-grade ore while it was in operation. The mine was established in 1905 and became fully functional in the 1920s. The town of Buchans was built by the owners at the government's expense. The town was owned and controlled by the mine owners until the late 1970s. Employees lived on site with their families. Buchans was isolated for most of its history, and the mine owners controlled not only what people could purchase, but whether or not employees could leave the property.

Currently, Royal Roads Corporation has been prospecting the Buchans area for diamonds. The government of Newfoundland recently gave the company $200,000 in grants for those prospecting activities, which are planned to continue into 2010. Royal Roads is the new owner of the mine. There is a possibility that the old Lucky Strike mine may resume operations in the future.

The Lucky Strike mine was originally owned by the American Smelting and Refining Company (ASARCO) and AbitibiBowater. ASARCO has a notorious history of profiting from its mining operations whilst poisoning the people who extracted the ore. ASARCO is estimated to have left behind polluted sites in the United States that will cost taxpayers around $7 billion to clean up. The company declared bankruptcy in 2005 and thus far has not resumed operations, although there is speculation that the company might resume operations next year under new ownership.

AbitibiBowater had co-owned the mine since 1926 and was to undertake a clean-up, after ASARCO folded in the 1980s. The clean-up was expected to cost at least $2 million, but the company declared bankruptcy earlier this year. The government of Newfoundland said it will pursue costs for clean-up from AbibitBowater.

New Asarco worker death -- latest in an occasional, unfortunate series

Tim Steller, Arizona Star

28 September 2009

An Asarco worker at the Ray mine died Sunday after crashing while driving a haul truck. Robert C. Stewart was 29 years old.

This is the latest in a series of deaths at Asarco's mines - I count four since January 2000. Whether that's a low or high number, I can't say right now.

On Aug. 15 last year an electrical apprentice named Peter Eudave, 41, was electrocuted while installing a flood light at the Ray mine. The federal Mine Safety and Health Administration blamed the company's negligence for the death. Asarco appealed this ruling, and the administration appears not to have made a final ruling

In June 2002, John Lucero, 32, was killed in a conveyor belt at Asarco's Hayden site

In January 2000, José Villanueva, 58, was killed at Asarco's Mission mine, southeast of Tucson. That incident resulted in heavy fines and a series of lawsuits against Asarco, one of which reached the Supreme Court.

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