Feds Get $1.79 B from ASARCO to Clean Up Mining Sites
- By L.K. Williams, EPonline
- Dec 11, 2009
The U.S. Environmental Protection Agency, along with the departments of justice, interior, and agriculture, on Dec. 10 reported that a settlement with a bankrupt and now reorganized American Smelting and Refining Company LLC (ASARCO) will bring $1.79 billion for the cleanup and restoration of contaminated sites and facilities throughout the country.
"This is unique," said John C. Cruden, acting assistant attorney general for the Justice Department’s Environment and Natural Resources Division in a press conference call. "This is a function of what the company has available as assets. This is a company that made money while in bankruptcy."
Tucson, Ariz.-based ASARCO filed for protection under Chapter 11 of the U.S. bankruptcy code on Aug. 9, 2005 when its operations were limited to assets in Arizona and Texas. Nearly 100 years old, the business began as a holding company for diverse smelting, refining, and mining operations and is now an integrated copper-mining, smelting, and refining company. It submitted disclosure statements last October.
In March, the company had proposed settlement agreements. By August, the U.S. Bankruptcy Court for the Southern District of Texas held a two-week hearing on competing plans of reorganization for ASARCO that would allow the company to be purchased out of bankruptcy. During this hearing, two competing plans emerged that proposed to pay creditors in full with interest. On Aug. 31, Judge Richard Schmidt of the U.S. Bankruptcy Court in Corpus Christi recommended the U.S. District Court for the Southern District of Texas confirm the plan proposed by ASARCO’s parent company—a subsidiary of Grupo Mexico. U.S. District Judge Andrew Hanen in Brownsville accepted the recommendation and confirmed Grupo Mexico’s plan on Nov. 13. On Dec. 9, the company paid the federal government.
Associate Attorney General Tom Perrelli explained that high copper prices influenced the bidding and helped the settlement result in payment plus interest.
The funds are being distributed pursuant to agreements approved in 2007, 2008 and most recently in June 2009:
- The United States received approximately $776 million, which will be distributed in accordance with the underlying settlements to address 35 different sites;
- The Coeur d’Alene Work Trust was paid $436 million;
- The three custodial trusts that address the owned but not operating properties of ASARCO and involve a total 13 states and 24 sites were paid a cumulative total of approximately $261 million; and
- Payments totaling in excess of $321 million were paid to 14 different states to fund environmental settlement obligations at 36 individual sites.
The money from environmental settlements will be used to pay for past and future costs incurred by federal and state agencies at more than 80 sites contaminated by mining operations in 19 states (Arizona, Alabama, Arkansas, California, Colorado, Idaho, Illinois, Indiana, Kansas, Missouri, Montana, Nebraska, New Jersey, New Mexico, Ohio, Oklahoma, Texas, Utah, and Washington).
The Superfund sites that will benefit from the settlement include the following:
- Barker, Big River Mine Tailings/St. Joe Minerals, Bunker Hill/Coeur d’Alene, California Gulch, Cherokee County, Circle Smelting Corporation, and
- East Helena, El Paso County/Dona Ana County Metals, El Paso Smelter, Federal Mine Tailing, Federated Metals-Whiting, Hayden Smelter,
Jack Waite Mine, Madison County Mines Project, Murray Smelter, and Newton County Mine Tailings.
- Omaha Lead, Oronogo-Duenweg Mining Belt, Richardson Flat Tailings, Stephenson-Bennett Mine, Tacoma Smelter, Tar Creek, Taylor Springs,
Terrible Mine, and Vasquez Boulevard/Interstate-70.
Tom Strickland, assistant secretary for Fish, Wildlife and Parks, Department of the Interior, said that his agency would get about $194 million for natural resource claims and that he expected the restoration to take several years. "At least we have the finances to start," he added.