Hardrock Reclamation Bonding Practices in the Western US

From the Center for Science in Public Participation.

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Hardrock Bonding Report

Hardrock mining has had a major impact on the social landscape and environment of the western United States. In the past, hardrock metal mining for gold and silver, copper, molybdenum and other metals were largely conducted in smaller high-grade operations. These operations produced a legacy of one time riches for a few individuals and abandoned mines, broken towns, and environmental impacts that will forever remain a part of the western United States.

Today, modern mining companies employ advances in technology that have led to massive mining operations such as those that employ open pit mining and leaching methods to exploit lower-grade ores. At the same time, the increased size, techniques used, and proactive environmental standards result in significantly increased costs to restore lands and waters damaged by mining operations, which is required to varying extent by all the western states. In addition, all the states require some form of “reclamation bonding” to ensure that mining operations are conducted responsibly and reduce their liability in the event mining companies fail to fulfill their responsibilities.

Today’s major hardrock mining operations in the western U.S. typically range in disturbance area from 100 acres to more than 10,000 acres. At the same time reclamation costs, which vary significantly from state to state and mine site to mine site, range from less than $1,000 per acre to more than $20,000 per acre.

The total, potential reclamation bonding liability of all the western states presently exceeds one billion dollars.

At the same time, the financial failure of numerous mining companies has exposed shortcoming in both bond methods and bond amounts.

American taxpayers are faced with significant liability for mines left unreclaimed, shifting the economic burden from the companies that profited from the mines and leaving environmental disasters behind for the public to clean up. The number of bankrupt or abandoned mines has increased significantly, with state and/or federal agencies presently potentially responsible for at least some portion of the cleanup costs of 13 mines in Nevada, five in Montana, and additional mines in South Dakota, Alaska, Idaho, Colorado and New Mexico. Given the potential for a major collapse within the gold and copper mining industry (as demonstrated by recent metals prices at 20-year lows), the potential for public liability of an even greater magnitude certainly exists. The relatively obscure regulatory principal of reclamation bonding has recently become more important and warrants both public and regulatory scrutiny…