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Rocky Mountain MineRal law
Foundation
Special Institute on
www.rmmlf.org
Mine Closure,
Financial Assurance,
and Final Reclamation
Westin Hotel • Westminster, Colorado
November 5-6, 2009
Experience gained in dealing with the legacy of historic mining opera-
tions and in closing mines permitted and developed under more recent
regulatory programs has demonstrated that closure of a mine should
be well thought out and planned, even during initial project design and
evaluation. This Special Institute is intended to give a broad overview of
closure topics and issues and to assist in present day closures, planning
for closures that may not occur for years or even decades, and designing
mines that have yet to begin development.
The first element of mine closure is to verify the required reclamation
standards, permit reclamation conditions, and post-mining land uses.
A postclosure plan must be developed that is compatible with the post-
mining land uses. Calculating the cost of implementing the postclosure
plan establishes the amount of the postclosure financial assurance. The
recent decision in Sierra Club, et al. v. Johnson by the United States
District Court for the Northern District of California may ultimately
impact the level of financial assurance and the closure requirements for
mine operators. Determining an appropriate financial assurance vehicle
is also a key consideration in finalizing the postclosure plan.
In addition to the foregoing general closure topics, the Special Institute
will also cover governmental reclamation of abandoned mine lands,
and the legal authorities applicable to such reclamation. Involvement
of a reclamation surety in closure is also covered.
Specific coal mine closure issues are the subject of one topic.
Institutional controls are utilized in most closures to
protect property, the environment, and the operator itself.
Historic preservation issues also must be considered.
Sustainable development is now the goal of operators,
who plan and implement sustainable development con-
cepts during operations that carryover as self-sustaining
postclosure conditions.
Finally, if the operation is not quite ready for
permanent closure, temporary suspension of
operations may be the appropriate status.
CDs and the course manual are available
• Save $100 if you are unable to attend.
by registering early See inside for details.
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Mine Closure, FinanCial assuranCe,
and Final reClaMation
Thursday, November 5, 2009
7:30 Registration Opens made it easy for mining companies to skip out on costly
cleanups by declaring bankruptcy. Mining trade groups
state that it is entirely unnecessary to force the EPA to
8:40-9:00 consider the mining industry as an industry upon which
Introductions and Opening Remarks new and separate financial assurance requirements
should be imposed, because adequate financial assur-
DAVID P. PHILLIPS, Executive Director, Rocky Mountain ance is already required. This panel will give attendees
Mineral Law Foundation, Westminster, Colorado the latest information on actions the EPA has taken as a
WALTER E. STERN, President-Elect, Rocky Mountain result of the decision, and the views of other interested
Mineral Law Foundation, Attorney, Modrall, Sperling, persons on how the decision could impact financial as-
Roehl, Harris & Sisk, P.A., Albuquerque, New Mexico surance and closure requirements for mine operators.
MAX MAIN, Program Chair, Attorney, Bennett, Main & Panelists:
Gubbrud, P.C., Belle Fourche, South Dakota
JOSEPH H. BAIRD, Attorney, Baird Hanson Williams
LLP, Boise, Idaho
9:00-9:55
DAVE GASKIN, P.E., Chief, Bureau of Mining Regulation
Completing Mine Closure and Reclamation, and
and Reclamation, Nevada Division of Environmental
Obtaining Agency Approval
Protection, Carson City, Nevada
• Selecting Post-Mining Land Use -- Must Be Win-Win-
Win (Company, Government, Public). JAMES R. BERLOW and BEN LESSER, Program
• Completing Concurrent and Final Closure and Recla- Implementation and Information Division, Office
mation. of Resource Conservation and Recovery, U.S.
• Verifying Legal and Permit Obligations Have Been Met Environmental Protection Agency
(No Acre Left Behind).
• Documenting Revegetation Success, Geotechnical
Stability, Water Quality Protection, and more. 11:10-12:00
• Obtaining Reclamation Sign-Off. Postclosure Financial Assurance
• Establishing Postclosure Plan and Financial Assur- • Costs to be considered, i.e., monitoring, water treat-
ance. ment, vegetation maintenance, constructed facility
• Opportunities in Different Jurisdictions. removal.
AL TRIPPEL, Partner, Environmental Resources • Calculating the amount.
Management, Midland, Michigan - Present worth approach.
- State of Nevada’s cost estimating program.
- Asset Retirement Obligation requirements under
9:55-10:15 Break - GAAP compared to governmental financial assur-
ance requirements.
- Periodic review of amount by agency.
10:15-11:10
• Financial assurance vehicles.
Potential Addition of CERCLA Financial Assurance - Cash deposit.
Requirements - Letter of credit.
- Environmental trust.
On February 26, 2009, the United States District Court - Bond.
for the Northern District of California issued its deci-
sion in Sierra Club, et al. v. Johnson. In that decision, ANDRES MEGLIOLI, Ph.D., M.B.A., Partner,
the court ordered the Environmental Protection Agency Environmental Resources Management, Greenwood
(EPA) to “close a loophole” under CERCLA and iden- Village, Colorado
tify, by May 4, 2009, those categories of industries that
should be subject to financial assurance requirements
12:00-12:30 Hosted Luncheon
under CERCLA. Reactions to the decision have been
varied. Environmental advocacy groups have character-
ized it as closing a loophole that for more than 25 years
Thursday, November 5, 2009 (Continued)
12:30-1:30 complex interrelationship of the Surface Mining Control
and Reclamation Act (SMCRA) Title IV, which autho-
Hot Topics in Legal Ethics and Attorney Regulation
rizes the program, the state reclamation plan adopted
ALEXANDER “ALEC” R. ROTHROCK, Attorney, Burns, pursuant to SMCRA, by which Montana was authorized
Figa & Will, P.C., Greenwood Village, Colorado to administer the program, and Montana laws and
1:30-2:30 regulations affecting the abandoned mine program. It
will address the delegation of authority from the United
Execution of Reclamation by the State of Montana States to the State of Montana necessary to imple-
Abandoned Mine Program ment the program, as well as internal delegations to
This paper will describe technical aspects of the the Department of Environmental Quality authoriz-
Montana Abandoned Mined Land Reclamation ing reclamation by the program. It will include, where
Program, describing the work undertaken pursuant germane, history, funding, and scope of the current
to that program. Reclamation of abandoned mined program.
lands is a multi-step process. This paper will discuss THOMAS E. ROOT, Special Assistant Attorney General,
these phases of reclamation, beginning with the pre- State of Montana, Department of Environmental
construction phase of reclamation, which includes Quality, Abandoned Mined Land Reclamation Program,
identification and inventory of abandoned mine sites, Helena, Montana
initial site investigation, formulation of reclamation
work plans, site characterization, and development of
an Expanded Engineering Evaluation/Cost Analysis 3:30-3:50 Break
(EEE/CA), which results in plans for execution of rec-
lamation. After the pre-construction steps have been
discussed, the paper will address preparation of a bid 3:50-4:50
package, which is an intermediate step leading to con-
Coal Mine Closure, Reclamation and Financial
struction. The paper will then address construction,
Assurance
the phase during which reclamation of an abandoned
mine land site is executed and the consequences of • Structure of Reclamation Bonding Under the federal
mining at an abandoned site are addressed. The paper Surface Mining Control and Reclamation Act.
will conclude with a discussion of post-construction ac- • Corporate Surety Bonding.
tivities, which include final engineering reports, moni- • Collateral Bonds.
toring, and filing of notices of reclamation. • Self Bonding.
JOHN KOERTH, Department of Environmental • Impact of the Financial Crisis on Availability of
Quality, Montana Abandoned Mined Land Reclamation Bonds.
Program, Helena, Montana • Alternatives and Innovations: Bond Pools and
Bonding Reform.
• Phased/Cumulative Bonding and Reclamation.
2:30-3:30 • Mine Closure and Reclamation.
Legal Authorities for Abandoned Mine Reclamation • Bond Release Following Final Reclamation by Op-
by States erator.
• Bond Forfeiture and Collection, Reclamation by
The purpose of this paper is to describe the legal Regulatory Authority.
authorities of the Montana Abandoned Mined Land
Reclamation program. It will follow Devin Clary’s DENISE A. DRAGOO and JAMES P. ALLEN, Attorneys,
technical discussion of the program and will show the Snell & Wilmer L.L.P., Salt Lake City, Utah
interrelationship between the legal authorities for the
program and the technical work which results from
exercise of those authorities. It will specifically address 4:50-6:30
the legal authorities for the process adopted by the Hosted Reception – For registrants, speakers and
Montana Abandoned Mined Land Section for evalua- guests
tion, design, and cleanup of sites. It will discuss the
Friday, November 6, 2009
8:30-9:30 • Examples of How Institutional Controls Have Been
Used in Mine Closures
Institutional Controls to Protect Property,
Environment and the Operator HAL J. POS, PATRICIA J. WINMILL, and ELIzABETH
A. SCHuLTE, Attorneys, Parsons, Behle & Latimer, Salt
• Introduction to Institutional Controls (“ICs”)
Lake City, Utah
- What ICs Are
- How and Why ICs Came to be Used in Various
Environmental 9:30-9:50
- Clean Ups
- The Kinds of Institutional Controls Available Break
· “Proprietary” Controls, e.g., statutory covenants,
covenants running with the land, conservation
9:50-10:50
easements
· Informational Devices, e.g., deed restrictions, Historic Preservation
registries • Policy goals and regulatory framework of National
· Governmental Controls, e.g., zoning, restrictions Historic Preservation Act.
on use of groundwater • Identifying potential mining sites and structures ex-
· Enforcement Agreements and Permits posed to listing on National Register.
· Relationship between the ICs and Engineered • Federal undertakings during mine closure and trig-
Controls gering NHPA protection.
- Development and Adoption of the Uniform Envi- • Section 106 Review and protection of historic sites.
ronmental Covenants Act • Regional examples of attempts to preserve mining
- The Limitations of Private Covenants and Other sites and structures during closure.
Restrictions
• When Can an Operator Choose to Rely upon Statuto- In addition to the body of law that directly governs min-
ry Covenants and When Must It Implement a Statu- ing, operators are required to comply with a number of
tory Covenant? ancillary local, state, and federal laws and regulations.
One such law is the National Historic Preservation Act of
- Application of the Uniform Environmental Cov-
1966 (NHPA or the Act). This presentation will examine
enants Act
the regulatory framework of the NHPA and its impact
· Which States Have Adopted the Uniform Act
on the mine closure process. The NHPA states that “the
· Which States Have Adopted Different Statutory historical and cultural foundations of the nation should
Covenant Provisions be preserved as a living part of our community life and
· Which States Have Adopted Voluntary Clean-Up development in order to give a sense of orientation to the
Programs American people.” In order to achieve this goal, the Act
- When the Operator has a Choice, What are the prescribes a regulatory scheme whereby the Secretary of
Factors to be Considered in Whether an Environ- the Interior is charged with creating and maintaining a
mental Covenant should be Used, i.e., implications National Registry of Historic Places. An extremely wide
of inviting governmental involvement range of properties, structures, and features are poten-
- Negotiating the Restrictions Imposed Under, and tially eligible for protection under the NHPA. Once a site
the Terms of, an Environmental Covenant is either eligible for listing or becomes listed, it is within
• When Should an Operator Consider Imposing an IC, the reach of the NHPA and its administrative protec-
Even Though the Government Does Not Require It? tions. When planning for mine closure, every component
• Selecting the Appropriate Restriction of the mining operation – buildings, roads, tailings,
- What is the Nature of the Potential Human Health disposal facilities, mine shafts, quarries and open pits,
or Environmental Risk? chemical storage areas, mine drainage systems – must
- What is the Likely Post Mining Land Use? be carefully considered so as to ensure regulatory
- Does the Value of a Possible Post Mining Land compliance. A thorough understanding of your mine’s
Use, i.e., exposure to the NHPA will serve as a valuable decision
- Residential Development, Suggest that the Opera- making tool when planning for and undergoing closure.
tor Should Not Rely on ICs? REBECCA L. ALMON, Attorney, Ireland Stapleton Pryor
& Pascoe, PC, Denver, Colorado
OIL & GAS AGREEMENTS:
THE ExPLORATION PHASE Mine Closure, FinanCial assuranCe,
and Final reClaMation
Friday, November 6, 2009 (Continued)
10:50-11:50 2:30-3:30
Integrated Mine Closure Planning in the Considerations for Temporary Mine Closure
Framework of Sustainable Development
• Introduction.
• Front end closure and postclosure planning. - Recent Closure Headlines.
• Implementing sustainable postclosure uses during - Overview of Key Environmental/Business Is-
mining. sues.
• Incorporating community/scientific involvement in - Human Resources– Social/Community-Techni-
postclosure uses. cal-Financial
LuKE J. DANIELSON, Sustainable Development - Environmental and Permitting.
Strategies Group, Gunnison, Colorado • Temporary Cessation.
- Planned Cessation.
- Unplanned Cessation.
11:50-1:30 - Regulatory Definition.
Lunch - On Your Own • Environmental and Business Considerations
- Human Resources.
- Accounting/Financial.
1:30-2:30 - Leases (lands/equipment).
Distressed Closure – The Role of the Surety - External/Community.
- Security.
• Bonded Obligations - Infrastructure.
• Nature of Suretyship - Vendor/Suppliers.
• Relationship between the Parties: Permittee, - Regulatory Notifications.
Agency, Surety - Environmental/Permitting.
• Legal Rights of the Parties Upon Bonf Forfieture • Case Study.
• Issues in Bankruptcy
• Surety Workouts for Reclamation LuKE J. RuSSELL, Vice President, Environmental
Services, Coeur d’Alene Mines Corp., Coeur d’Alene,
WILLIAM T. GORTON III, Attorney, Stites & Harbison, Idaho
Lexington, Kentucky
3:30
Adjournment
Program Committee
MAX MAIN, Program Chair, Attorney, Bennett, Main & RANDALL E. HuBBARD, Attorney, Davis Graham &
Gubbrud, P.C., Belle Fourche, South Dakota Stubbs LLP, Denver, Colorado
DAVID A. BAILEY, Attorney, Carver Schwarz McNab & JAMES M. KING, Attorney, Baker & Hostetler LLP,
Bailey, LLC, Denver, Colorado Denver, Colorado
PATRICIA A. CORBETTA, Partner, Environmental WILLIAM B. PRINCE, Attorney, Dorsey & Whitney L.P.,
Resources Management, Greenwood Village, Colorado Salt Lake City, Utah
DAVID L. DEISLEY, Vice President and General Counsel, THOMAS E. ROOT, Special Assistant Attorney General,
Goldcorp Inc., Vancouver, British Columbia Montana Department of Environmental Quality, Helena,
Montana
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assuranCe, and Final reClaMation
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