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FOR IMMEDIATE RELEASE
JULY 23, 2002
4:07 PM
CONTACT:  Mineral Policy Center
Michael Kharfen 202-478-6175
Mineral Policy Center: Mining Industry Seeking to Evade Financial Responsibility for Cleaning Up Billions in Toxic Pollution
 
WASHINGTON - July 23 - Mining expert Jim Kuipers from the Center for Science in Public Participation testified before the House Resources Subcommittee on Energy and Mineral Resources today that taxpayers may have to pay as much as 10 billion dollars to clean up polluted mine sites on public lands. Recent rule changes require the mining industry to ensure adequate funding for mine clean-ups before mining begins. In response to industry lobbying against these rules, the Bush Administration formed a task force that is likely to propose changes to allow ineffective "corporate guarantees" rather than real financial guarantees. This would make it much easier for mining companies to avoid financial responsibility for clean-ups and shift the costs to taxpayers.

"At a time when the Enron and Worldcom scandals have rocked public confidence and demonstrated a need for much greater corporate accountability, why is the Bush Administration about to allow the mining industry to evade responsibility for paying to clean up toxic pollution from mines?" Kuipers told the committee. "Instead of proposing to weaken the regulations, the Bush Administration should enforce current regulations and seek new tools to ensure that polluters pay, not taxpayers."

Under existing federal regulations, mining companies are required to purchase bonds or cash equivalents to cover the costs of environmental clean-ups from mining operations on public lands. The up-front bond purchases ensure that toxic pollution will be cleaned up and mutilated landscapes reclaimed when a company is unable or unwilling to pay. These financial guarantees are needed because the mining industry has left a trail of toxic contamination: 500,000 abandoned mines across the county; the pollution of 40 percent of Western watersheds; and nearly 30 mine sites currently on the EPA's Superfund National Priority List of the most contaminated sites in the nation.

Typically, a large mine site will disturb more than 10,000 acres of land. At many mines, acid drainage can result in the leaching of toxic and carcinogenic contaminants such as arsenic into water sources. The costs of addressing this pollution can climb above one hundred million dollars per mine. Mining companies have been underestimating the cost of the clean-ups, and have failed to provide adequate guarantees to ensure that the mines will be cleaned up. Kuipers estimates that mining companies in the U.S. have a potential gap of $10 billion in clean-up coverage. If the mining companies won't be able to pay for the clean-ups, taxpayers will have to pay.

Now, in the midst of corporate accountability scandals, the mining industry is seeking relief from the Bush Administration. It has asked the administration to eliminate the bond requirement and replace it with a worthless paper "corporate guarantee" without any financial resources attached to it. The only financial guarantee would be the taxpayer. The Environmental Protection Agency Superfund has already paid out more than $500 million to clean up mine sites.

The mining industry claims there is a crisis in the availability of bonds. Prices have risen for legitimate financial guarantees, but it is reflective of the track record of the mining industry's underestimation of costs. The true crisis is the potential costs of repairing public lands from mining operations.

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