The state of Montana will require copper miners in Meagher County to post a $4.6 million bond to commence construction, the first of multiple bonds the company will need to post to mine north of White Sulphur Springs.
The Montana Department of Environmental Quality announced its bond calculation Wednesday for Phase 1 of the Black Butte Copper Project. Sandfire Resources America, formerly Tintina Resources, recently satisfied environmental reviews for an operating permit. The company must post the bond as security to cover environmental cleanup costs should Sandfire not complete required reclamation.
“The bond for the Phase 1 activities at the Black Butte Mine has been carefully calculated by the DEQ financial assurance experts,” DEQ Director Shaun McGrath said in a statement. “Additionally, we will review the amount periodically to ensure the state has the resources to complete reclamation of these activities, if that becomes necessary.”
Jerry Zieg, Sandfire senior vice president, said the bond came in higher than the company calculated for actual costs, but felt the state’s justifications reasonable. Sandfire will post the bond and begin construction in June, he said.
Sandfire will finance its bonding in increments as it develops various phases of the mine. DEQ has not released estimated total bonding for Black Butte, which would be expected to operate for 13 years.
Rob Scargill, Sandfire America's CEO and vice president of project development, told the Associated Press the company will seek roughly $300 million to develop the project and expects to bring in about $2 billion in revenue. An estimated $1 billion would stay in Montana in the form of taxes, wages, leases and other services during the 13-year life of the mining operation, he said.
Zieg says Sandfire’s engineers are working with a contractor now but he does not expect the bulk of hiring to begin until next year, calling Phase 1 a “baby step” toward the opening of the mine.
Phase 1 of Black Butte includes only construction on the surface. Projects include a small reservoir to catch runoff and pad construction for the area of the tunnel and near ore processing facilities, said Jerry Zieg, Sandfire senior vice president.
“It’ll take us the rest of this year to complete that batch of work,” he said. “We won’t go underground or construct the portal until next year.”
The Black Butte mine has been a controversial project due to its location near a tributary of the Smith River.
Supporters of the mine note the economic impact and say that modern mining techniques will protect the environment. In its permitting decision, DEQ is requiring Sandfire to supplement water flows affected by the mine, and monitor water quality and temperature.
DEQ is also requiring the company to store water that comes into contact with acid-producing minerals in a double-lined, cemented tailings facility, to backfill mined areas with a mix of tailings and cement as work is completed and to seal mine tunnels and entryways to prevent groundwater flows across acid-producing minerals, the AP reported.
Opponents point to ongoing pollution from mining in Montana including companies that went bankrupt, resulting in state and federal agencies taking over cleanups. They believe the iconic Smith River, which draws thousands of applications to float each year, is too precious to risk.
Last month, opponents told the AP they were evaluating whether to challenge the mining permit in court.
Reporter Tom Kuglin can be reached at 447-4076 @IR_TomKuglin
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