Comments on the by benbenzhou


									Comments on the
Proposed Cleanup Plan for the Molycorp, Inc. Site
(Currently Chevron Mining, Inc.),
December 2009

James R. Kuipers and Steve Blodgett
Kuipers & Associates
March 2010

The Red River Restoration Group (R3G)
U.S. EPA Technical Assistance Group
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                                                                             March 2010

1.     Introduction, Background and Purpose............................................................................................... 3
2.     Mill Area ............................................................................................................................................... 4
     2.1.     Cover Depth .................................................................................................................................. 4
     2.2.     Anticipated PMLU ........................................................................................................................ 4
     2.3.     Cleanup Level................................................................................................................................ 5
3.     Mine Site Area ...................................................................................................................................... 5
     3.1.     Source Control .............................................................................................................................. 6
     3.2.     Spring Gulch Cover Material for Re-vegetation .......................................................................... 6
       3.3.       Spring Gulch Cover Material Molybdenum ............................................................................. 7
     3.4.     Revegetation Test Plots ............................................................................................................... 7
     3.5.     Mine Subsidence Areas and Open Pit.......................................................................................... 8
     3.6.     Buried Garbage and Waste Oil in Mine Site Area ....................................................................... 8
4.     Tailings Facility Area ............................................................................................................................. 9
     4.1.     Unmonitored Release of Water from Tailings Facility ................................................................ 9
       4.1.1.         Bedrock Aquifer Discharge ................................................................................................... 9
       4.1.2.         Alluvial Aquifer Discharge .................................................................................................. 10
     4.2.     Tailings Source Control and Revegetation................................................................................. 11
     4.3.     Tailings Management (Fugitive Dust) ........................................................................................ 12
     4.4.     Solar Pilot Project ....................................................................................................................... 13
5.     Red River, Riparian, and South of Tailing Facility Area ..................................................................... 14
     5.1.     Red River Remediation and Restoration ................................................................................... 14
     5.2.     Enhanced Capture and Management of Mine Site Area Seeps and Springs ............................ 15
     5.3.     Riparian....................................................................................................................................... 15
     5.4.     South of Tailing Facility Area ..................................................................................................... 16
6.     Eagle Rock Lake .................................................................................................................................. 16
7.     Other Issues ........................................................................................................................................ 16
     7.1.     Institutional Controls Program and Community Protective Measures Plan ............................ 16
8.     Financial Assurance ............................................................................................................................ 19

                                                                           Page 2
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                             March 2010

1. Introduction, Background and Purpose

The following comments on the Proposed Cleanup Plan (the Plan) for the Molycorp, Inc. Site (the Site)
(Currently Chevron Mining, Inc. or CMI), released by the United States Environmental Protection Agency
(EPA) in December 2009, have been developed and provided on behalf of the Red River Restoration
Group (R3G). R3G has been the EPA funded community Technical Assistance Group (TAG) for the Site
since 2002.

 Just as the Proposed Plan represents EPA’s tenure at the site, these comments represent the
culmination of technical involvement by the authors since 1998. We have participated as advisors to
both Amigos Bravos, a local public interest organization, as well as R3G’s predecessor TAG, the Rio
Colorado Reclamation Committee. Additionally, we have been actively involved in previous and current
undertakings by both the State of New Mexico Environment Department (NMED) and Mining and
Minerals Division (NMMMD) at the Site. Mr. Jim Kuipers, principal of Kuipers & Associates, has over 25
years experience as a mining and environmental professional engineer, with extensive involvement in
the reclamation, closure, and financial assurance aspects of numerous mine sites internationally.
Similarly, Mr. Steve Blodgett has over 20 years experience as a mining reclamation specialist at
Superfund and other contaminated sites, as well as worked extensively with indigenous and mining
communities. The comments provided herein are based on the our extensive technical and community
outreach expertise and are intended to be substantive, constructive and highly informed from an
implementation perspective with respect to the Superfund and related regulatory processes.

The purpose of these comments follows:

    1) To ensure public/community and technical concerns discussed during the Superfund process are
       identified and addressed reasonably and appropriately in the Plan.
    2) To ensure the Plan and the ensuing Record of Decision (ROD) anticipate future regulatory,
       technical design and implementation matters.
    3) To ensure future actions, including the ROD, anticipate, as well as address community and local
       government concerns, with a more robust Institutional Controls Program and Community
       Protective Measures Plan that is directed by local concerns and desires, thereby protecting
       human and economic health of the local community over the long-term.

The comments are directed towards the EPA’s Preferred Alternative in the order presented in the Plan
and other issues as identified. The comments follow a format of identifying the issue related to the
Preferred Alternative, providing a summarized discussion of the issue, and providing a recommendation
focused on steps forward with respect to the ROD, design and implementation, and community and
governmental involvement.

We would like to take this opportunity to congratulate the EPA in reaching this significant milestone in
the Superfund process. The timeframe is typical for Superfund sites, although it was hoped that
coordination with the previously well advanced State of New Mexico regulatory processes under the
NMED and NMMMD might help to expedite the Superfund process. Given that the Plan in large part
mirrors the State processes with important improvements, it is anticipated that this will strengthen the
resolve of all parties to proceed with implementation of the Plan in an expeditious manner. If the
agencies can implement the Plan in terms of significant earthmoving and revegetation activities within
two to three years, true success can be realized by those engaged in this process. One thing the public

                                                  Page 3
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                               March 2010

has made clear – we as regulators and technical participants need to quit talking, start doing
remediation, and begin addressing other public concerns at this Site. With the above over-arching
recommendation, the following comments are offered for EPA’s consideration.

2. Mill Area

EPA’s preferred alternative is Alternative 3 – Soil Removal (High Concentrations of PCBs > 25 mg/kg) and
Off-Site Treatment and Disposal (Low Occupancy/Commercial/Industrial). According to the Plan,
approximately 2,400 cubic yards of soil with total polychlorinated biphenyls (PCB) concentrations above
the Toxic Substances Control Act (TSCA) cleanup level of 25 mg/kg for low occupancy/commercial/
industrial use would be excavated from an area covering about 0.6 acres, and transported off-Site for
treatment and/or disposal at EPA-approved facilities. The depth of excavation is estimated at 2.5 feet.
Confirmation soil sampling would be performed to determine if cleanup levels have been attained. If
not, additional soil would be excavated until cleanup levels are met or an EPA-acceptable depth has
been reached. The excavation would be backfilled with clean fill (Spring Gulch rock pile material) and
graded. Low occupancy use cleanup standards were selected for this alternative based on the current
industrial use of the Mill Area, and the approved post mining land use (PMLU) of forestry and water
management under Mining Act Permit TA001RE-96-2. As part of mill decommissioning, the Mill Area
would be covered with 6 inches of amended Spring Gulch waste rock and revegetated to allow for the
development of a self-sustaining forest ecosystem comparable to the surrounding region.

    2.1. Cover Depth

According to the Plan, “However, as discussed above for Alternative 2, under the currently approved
PMLU of forestry and water management, a 3-foot cover would be required for those portions of the
Mill Area to be designated for forestry. The appropriate cover depth would be established during
remedial design to be consistent with the Closeout Plan and approved PMLU.”

The description of the post mining land use (PMLU) as forestry and water management requiring a 3-
foot cover is inconsistent with the suggestion that a 6-inch cover will be used to cover the Mill Area in
the Plan. The Plan should have required a 3-foot cover over the entire Mill Area since it is to be
designated for forestry with the exception of water management areas. At a minimum, an 18-inch cover
should be required for any anticipated future use in order to protect any underlying contaminated
materials from common anthropogenic (human caused) or wildlife activity.

Recommendation: The ROD should require a 3-foot cover over the entire Mill Area unless otherwise
justified as part of the remedial design or other identified PMLU.

    2.2. Anticipated PMLU

According to the Plan, the PMLU for the Mill Area is forestry and water management. However, in the
Notice to Deed for the portion of the Chevron owned site that includes the Mill Area, the Declaration of
Restrictive Covenants by Chevron includes as potential permitted uses “light industry and park,
recreational or athletic field uses” (Section 4.2).

At other Superfund sites, the issues of PMLU together with remedy choice have required significant
foresight into both present and potential future use of the site. Failure to anticipate future use has led
to significant shortcomings in remedy performance that jeopardizes remedy protectiveness and

                                                  Page 4
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                              March 2010

community economic stability. For example, in this particular case, future use of the site for public
recreation purposes is likely to require significant redevelopment of the site. With a six-inch cover and
less than complete removal of contaminated materials, it is reasonably anticipated that any
redevelopment is highly likely to encounter buried waste materials and disturb the cap. This would
result in significant expense to the developer unless otherwise anticipated or addressed by an
Institutional Controls Program and redevelopment funding mechanism, as well as the long-term
protectiveness of the remedy and of human health.

Recommendation: The ROD should identify and include the PMLU of public recreation and the
preferred remedy should be modified to require a minimum 18-inch cover, and preferably a 3-ft cover,
in anticipation of future public recreational use.

    2.3. Cleanup Level

According to the Plan, “With the ICs recorded by CMI in 2009 and the approved PMLU under Mining
Permit TA001RE of forestry/light industrial, it is reasonable to anticipate a low occupancy
(commercial/industrial) future land use at this time.”

As previously stated, the remedy described in Alternative 3 in terms of cover depth is inconsistent with
the PMLU, and the PMLU is not necessarily consistent with future use, including that of public recreation
as described in the Declaration of Restrictive Covenants submitted as the Institutional Controls for the
site by Chevron and relied upon by EPA in their determination. As experience has shown at other
mining related Superfund sites, inconsistencies such as this between the Proposed Plan, Post Mining
Land Use, and future use – including legal and governmental based institutional controls – is critical to
overall remedy success including long-term protectiveness of the remedy and future redevelopment.

The proposed remedial action, Alternative 3, would leave significant waste in place that is contaminated
with a highly toxic substance, PCBs. While the our experience suggests it may be appropriate to leave
less toxic waste under a protective soil cover with a minimum of 18-inches depth and a well
implemented and enforced Institutional Controls Program (ICP), based on the presence of PCBs and our
experience with the potential future use of this site, we do not believe Alternative 3 is adequate from
either a protectiveness or economic redevelopment standpoint.

Recommendation: In light of future land use considerations and economic redevelopment purposes, it
is highly recommended that EPA reconsider the adequacy of the proposed remedy and at a minimum
require the implementation of Alternative 4. Thus, removing all PCBs to a level of less than (<) 10
mg/kg, and that EPA together with other involved parties, such as the Village of Questa, further consider
removal of all contaminated materials to allow delisting of the property and future unfettered use for
the benefit of the local citizens and economy of the area.

3. Mine Site Area

EPA’s Preferred Alternative is Subalternative 3A – Source Containment (3H:1V: Balanced-Cut-Fill,
Partial/Complete Removal, Regrade, and Cover for 3H:1V Slopes); Storm-Water, Surface-Water, and
Ground-Water Management, Ground-Water Extraction and Treatment, and Subalternative 3B – Source
Containment (2H:1V: Balanced-Cut-Fill, Regrade, and Cover for 2H:1V Slopes); Storm-Water, Surface-
Water; and Ground-Water Management; Ground-Water Extraction and Treatment, and Mine Site Water
Treatment – Year 0 Construction.

                                                  Page 5
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                                March 2010

    3.1. Source Control

EPA’s proposal for source containment is consistent with previous requirements established by the
NMED and NMMMD, and their respective regulatory requirements under the New Mexico Mining Act
and Water Quality Act. However, the description in the Plan does not address the reality of the Site,
wherein the actual regrading designs must deal with underlying steep slopes and other physical site
constraints that limit regrading designs. The issue of geochemical stability/degradation of the rock piles
has yet to be conclusively resolved. The Plan does not resolve these issues and instead provides that
“For protectiveness at the Mine Site Area, it is expected that the range of minimum slopes specified in
the Preferred Alternative (3H:1V to 2H:1V interbench slopes) will be achieved for the rock piles.
However, it is also recognized that regrade to an interbench slope that is steeper than 2H:1V may be
appropriate and acceptable from a practical standpoint, if it can be demonstrated to the satisfaction of
EPA that such design will be protective of human health and the environment and achieve ARARs.”

Our participation in the Site technical processes, particularly since EPA has been involved, would suggest
that the cover material for the rock piles constitutes what has been an impasse between the views of
the regulatory agencies and that of the responsible party (e.g. Chevron). EPA’s Plan, because it is limited
to conceptual level thinking, does not significantly advance the issue or provide for any confidence that
it will be resolved without further significant disagreement between the parties which will ultimately
result in delaying implementation. For this reason it is important that the ROD address scheduling and
enforcement mechanisms, and require the design process employ technical approaches that bring both
differing viewpoints but also defining expertise.

Recommendation: The ROD should require a detailed design schedule and enforcement mechanisms to
assure that the schedule is expedited to achieve on-the-ground remediation within the shortest
reasonable time frame. The agencies should anticipate significant disagreement during the design
phase, and require associated funding for to form a Joint Technical Working Group (JTWG) with
involvement of regulatory, community/local government and technical consultants. Consideration
should be given to forming a high-level Independent Review Panel to serve as a formal advisory panel to
EPA and NMED, and assist them in addressing issues raised by the responsible party, as well as other
participants of the process.

    3.2. Spring Gulch Cover Material for Re-vegetation

According to the Plan (p. 59), following regrading the waste rock piles would be covered with 3-ft of
Spring Gulch Rock Pile material and vegetation. The cover material and vegetation would function as a
store and release (evapotranspiration or ET) cover that has the capacity to limit net percolation by
storing precipitation within the cover for a period long enough for water to be removed by evaporation
and transpiration.

First, we believe it is doubtful that any cover system can consistently increase ET and that percolation
rates are likely to exceed 25% and be as high, or higher, than 50% as has occurred at numerous other
mine sites where rates have been reliably measured. Second, we believe that even the best efforts
using Spring Gulch waste rock will likely result in at least limited short-term revegetation and will require
significant on-going supplementary effort and patience to achieve sustainable and highly effective (from
an ET standpoint) vegetation.

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Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                               March 2010

Recommendation: The ROD should be written to recognize limitation of net percolation into the rock
piles is a goal, but may not be realistically achieved to the extent anticipated by the agencies and
therefore is not adequate in and of itself as a means of source control, and that capture of resulting
groundwater is still required. It is, therefore, further recommended that additional consideration be
given to the enhanced capture and removal/management/treatment of groundwater resulting from
percolation through the rock piles with particular attention being given to those areas which are not
highly likely to be mitigated by the underground mine hydraulic sink, and that might impact the Red
River or associated alluvial aquifer.

    3.3. Spring Gulch Cover Material Molybdenum

According to the Plan (p. 42), “Because of concerns with elevated molybdenum in the Spring Gulch rock
above the molybdenum PRG (300 mg/kg) developed by EPA for protecting terrestrial plants and animals
at the mine site, additional Site-specific testing was performed for molybdenum toxicity, bioaccessibility,
and bioavailability. Based on the results of this testing, EPA developed a molybdenum suitability
criterion of 600 mg/kg for screening the borrow material. The 600 mg/kg suitability criterion is higher
than the 300 mg/kg molybdenum PRG because a significant portion of the molybdenum in Spring
Gulch rock is of a form (molybdenite [MoS2]) which is not readily bioavailable for ecological receptors
(emphasis added).”

The use of the Spring Gulch Rock Pile as cover material will expose it to oxidation over time and will
make the previously unavailable molybdenum readily available for plant uptake. Therefore, the testing
of in-situ characteristics of the material in a large pile where it is not exposed to the same conditions as
when it will be utilized as coversoil does not provide for comparative results. From a conservative basis,
it is likely that more molybdenum will become available if the material is utilized as cover material due
to oxidation and other natural processes which will degrade molybdenite. For this reason, we believe
the EPA should have retained the original 300 mg/kg suitability criterion.

Recommendation: The ROD should revise the Plan and require that a 300 mg/kg suitability criterion be
used for Spring Gulch rock used as cover material.

    3.4. Revegetation Test Plots

According to the Plan (p. 110), “Although considerable useful information was derived from the
previously unsuccessful revegetation test plots conducted by CMI for the waste rock piles (emphasis
added), key cover performance questions remain to be answered and should be resolved by closely
targeted test plots. Therefore, the Preferred Alternative will include test plots for the store and
release/ET cover system to demonstrate the anticipated improvement in vegetative productivity with
organic amendment application, erosion resistance of amended cover materials, and that moisture
holding properties will be sufficient to provide an effective cover system that protects ground water.”

We are very concerned that more test plots will be utilized in the anticipation of useful results, delaying
actual remediation implementation. We are particularly concerned that CMI will continue to conduct
test plot exercises which do not incorporate the requirement amendments and approaches that are
most likely to result in revegetation success. Clearly, CMI’s tests thus far, demonstrate that the
materials will require grading (e.g., sizing) to achieve the desired physical properties and significant
amendment with organic materials to achieve anything resembling erosion control and a sustainable

                                                  Page 7
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                                 March 2010

We believe it is time to quit “testing” and challenge both CMI and the agencies to go forward with
remediation of a significant area, such as the Goat Hill North geotechnical mitigation area. The agencies
should clearly define their short-term and long-term performance requirements, and CMI should be
allowed to go forward with a reasonable, but not risk-free, approach towards implementing regrading
and revegetation to achieve those requirements. If short-term performance is achieved within 2-3
years, then further remediation/reclamation on other areas should proceed with similar designs. What
is more likely to happen is that CMI will increase the extent of their undertakings to maximize the
likelihood of success, that the remediation will fail in several significant areas requiring revisions, and
that CMI will make those revisions, and over a period of 2-5 years develop a more viable approach that
the agencies feel more comfortable with allowing to proceed on a broader basis at the mine site. This
iterative process, which is difficult to drive forward much less predict, is nonetheless the only way
significant progress is likely to be made in the short-term at this highly complex Site.

Recommendation: The ROD should anticipate the divergence of opinions on vegetative success and
remediation/reclamation approaches in general, and anticipate and encourage means to cause large-
scale demonstration area and corrective/adaptive management in response to results obtained from
those areas. The ROD should not encourage further test plots as contained in the Plan except as a
means or tool for determining longer-term approaches to reclamation at the site.

    3.5. Mine Subsidence Areas and Open Pit

Other than a brief mention on pages 11and 55 of the Proposed Plan and delineation of some subsidence
areas on Figure 2, there is no discussion of any remedial action for the block-caving induced
underground subsidence and subsequent surface impacted areas in the Plan. Similarly no mention is
provided in the Plan to address the Open Pit. These unstable zones have created a rubbleized and highly
irregular and unstable land surface that allows for increased infiltration of water into the underground
workings. Because the subsidence area will not be capped, and open pit not backfilled, as well as safety
and implementability issues, water draining into the underground workings from these zones will be
pumped and treated in perpetuity. Clearly the subsidence areas and open pit present significant risk to
human health, safety and the environment, and should be addressed by EPA as part of the Plan.

Recommendation: The Plan should address the Mine Subsidence Areas and Open Pit with respect to
protectiveness of human health and the environment. If the EPA had some rationale for not addressing
these aspects of the mine site, it should have been provided in the Plan. The ROD should include
address of these areas within the scope of the Mine Site Area remediation.

    3.6. Buried Garbage and Waste Oil in Mine Site Area

As EPA is aware, various citizens including ex-employees of Molycorp, Inc. have claimed to have
knowledge of dumping of refuse and waste oil onto and within the mine site area waste rock piles.
While we believe EPA has made a reasonable effort to address such occurrences and has not identified
any specific locations, it is still likely that during remedial actions – particularly if significant rock is
moved, as is anticipated for the Spring Gulch Rock Pile and potentially other piles– that isolated but
significant sources of non-mineral related contamination not specifically identified in the Plan, may be
encountered. This belief is based on our professional experience which suggests that such activities
were likely to have taken place during open- pit mining operations, but not likely to be detected as part
of the Superfund characterization process.

                                                   Page 8
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                                March 2010

Recommendation: The ROD should recognize and provide measures for dealing with non-mineral
waste, such as mining operation related refuse, waste oil and PCBs, and related products that might be
encountered as a part of or during remedial actions.

4. Tailings Facility Area

EPA’s Preferred Alternative is Modified Subalternative 3B – Source Containment; Continued Ground-
Water Withdrawal Operations with Upgraded Seepage Collection, Piping of Water in Eastern Diversion
Channel, Ground-Water Extraction Southeast of Dam No. 1 (MW-4 and MW-17 Area) and Treatment,
and Tailing Facility Water Treatment – Year 0 Construction.

    4.1. Unmonitored Release of Water from Tailings Facility

        4.1.1.   Bedrock Aquifer Discharge

According to a 2006 water balance calculation by CMI, approximately 76% of all water placed on the
western portion of the tailing facility discharges to the basal bedrock (volcanic) aquifer (p. 112). EPA will
require additional studies to characterize this discharge, but the current Plan continues to allow this
discharge to leave the tailing facility untreated, and enter the Red River. EPA argues that this discharge
does not exceed NMED standards (except for the molybdenum health-based PRG [p. 43]). The following
statements are from the Proposed Plan (p. 20):

        “Elevated concentrations of molybdenum above the risk-based PRG of 0.05 mg/L are detected at
        monitoring wells near the Dam (approximately 0.7 mg/L at MW-11). Trends in the molybdenum
        and sulfate levels sharply increased from 2006 to 2008 in response to an increase of mining,
        milling, and tailing disposal operations (molybdenum levels increased from about 0.4 mg/L in
        2006 to near 1.0 mg/L in 2007 at MW-13)[emphasis added].

        There are several seeps and springs located south and southwest of the tailing facility which flow
        to the Red River. Some are located as far as the Red River State Fish Hatchery about one mile
        downstream of the facility. Sample analytical results show concentrations of molybdenum and
        sulfate in the springs to be elevated and, hence, contaminated by tailing seepage. The pathway
        for contaminant migration is the leaching of tailing seepage downward from the tailing facility
        to ground water that migrates through fractures to surface water of the Red River via seeps and
        springs. Although the concentrations of molybdenum at some springs exceed the risk-based PRG
        for ground water (0.76 mg/L at Spring 12), they do not exceed ecological screening levels for
        surface water.”

The relationship between mining/milling operations resulting in tailings deposition containing large
amounts of water and increases in contaminant levels in springs and seeps connected to the underlying
basal bedrock aquifer has been clearly established. Despite the claims that the water quality of this
discharge is within NMED standards, bottled water will be supplied or filters will be installed on the taps
used by 9 people (including 2 children) for drinking water at the Fish Hatchery (p. 111).

EPA has based its findings on the following (p. 111), “The Preferred Alternative is selected over other
alternatives because it is expected to achieve substantial risk reduction through remediation of
contaminated ground water in areas of current and reasonably anticipated future beneficial use. The

                                                   Page 9
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                                March 2010

Preferred Alternative is expected to significantly reduce risk from exposure to contaminated ground
water within a reasonable time frame and at significantly less cost (for treatment) than Alternative 4,
which would include ground-water remediation in the area south of Dam No. 4. The current limited
beneficial use of ground water in the area south of Dam No. 4 and the likelihood of no future increase in
such use led EPA to select Subalternative 3B over Alternative 4.”

Groundwater associated with the basal bedrock aquifer in the area of the Red River is clearly connected
to surface water and the Red River. Based on the information provided by EPA in the Plan and available
to us, it is believed that cost is the only reason that CMI is not being required to capture and treat all
discharges from the tailings facility. Given the value of the downstream waters to the State of New
Mexico and its citizens who utilize and recreate in those waters, the impact of beneficial use by any
water that discharges from the Molycorp site should be restricted as part of the Plan.

The Proposed Plan requires that all other contaminated waters at the tailing facility and on the mine site
be captured and pumped to a water treatment plant for treatment in perpetuity. Allowing the ongoing
discharge of untreated water from the tailing facility is simply irresponsible environmental policy.
Because the tailing facility contains approximately three million tons of unoxidized pyrite (p. 17,) the
long-term potential for acid generation and the continuing release of contaminants is very high. It
makes no sense to capture and treat all other contaminated water from the mine site and tailing facility,
and then allow the untreated discharge of up to 2,510 gallons per minute from the tailing facility to
enter the Red River. This untreated discharge amounts to ~1.35 billion gallons/year that will be allowed
to contaminate both the Red River and Rio Grande. If the water were to be treated before discharge, or
even better yet not removed from the river in the first place by mining operations, it would benefit the
State of New Mexico and all downstream users of the Rio Grande aquifer as a whole.

Recommendation: EPA should select Alternative 4 for the Tailing Facility Area and require that all
waters discharging from under the tailing facility should be captured and treated, just like contaminated
water on the mine site.

        4.1.2. Alluvial Aquifer Discharge

According to the Plan (p. 19), “Tailing-seepage contamination also occurs in the basal portion of the
alluvial aquifer, but to a much lesser extent than in the upper portion of the aquifer. Isolated areas of
elevated molybdenum concentrations are located south and southeast of Dam No. 1, but the
significance of these areas is uncertain. Sulfate levels remain below the New Mexico standard, but have
increased over time in some areas.” We are also aware of, and wish to recognize and lend their support
to, the comments of Ms. Deborah Miller, P.E., technical advisor to the Village of Questa, in this regard.
Her contributions in this area have been a valuable asset to the community and the overall technical
effort in terms of better understanding groundwater issues, and ensuring the concerns that have been
raised on the Village of Questa’s behalf are addressed.

Any groundwater which is determined to be contaminated as result of tailings facility discharges and can
be reasonably captured and treated should be addressed in the Plan. Given the clear value of domestic
drinking water supplies, particular attention should be given to the capture and treatment of alluvial
aquifer contamination.

Recommendation: EPA should select Alternative 4 for the Tailing Facility Area, and require that all
waters discharging from the tailing facility including those discharging via alluvial aquifers be captured

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Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                               March 2010

and treated, just like contaminated water on the mine site. This area should be given additional
emphasis since it involves the greatest risk of domestic use and impact of related property rights
including impacts to local acequia users.

    4.2. Tailings Source Control and Revegetation

According to the Plan (p. 112-113) the “definition of success” accepted by EPA, NMED and MMD for the
pilot is the following:

       Annual Net Percolation: Chevron shall provide a demonstration that the proposed cover depth
        will be protective of ground water. A successful demonstration will show that the cover system
        has the capacity to limit net percolation by storing precipitation within the cover system for a
        period long enough for water to be removed by evaporation and transpiration and that any net
        percolation will not cause an exceedance of ground water standards.

    This requires two tests, both of which are likely to provide spurious data: 1) determination of the
    net percolation rate within the cover system, and 2) characterization and prediction of the fate and
    transport of contaminants within the tailings themselves based on percolation through the cover
    system and as a result of any rise of groundwater levels within the tailings related to connected
    aquifers. New Mexico regulations recognize that a period of at least 12 years is required to
    demonstrate a sustainable ecosystem, and many revegetation experts agree that it may take a
    period significantly longer than a decade, perhaps stretching over centuries post-revegetation, to
    establish a sustainable ecosystem and be able at that point to determine the likely future
    percolation rate established within any cover system. Present state-of-the-art geochemical testing
    and prediction techniques are limited in their accuracy and ability to represent post-mining water
    quality, and at best serve as an indicator as to future potential for contamination to increase or
    decrease over time, with short-term changes in water quality possible at any point presently or in
    the future. We are concerned that in reality these performance criteria may not be achievable due
    to the long-term requirements for data collection and the potential for changing conditions and/or
    regulations (e.g. water standards) in the future.

       Molybdenum Uptake in Vegetation: No significant difference, as determined by an analysis of
        variance (ANOVA) test with a p-value of 0.05, between molybdenum concentrations measured in
        above-ground foliage collected from three or more locations from the 1-, 2-, and 3-foot cover
        test plots. T-tests shall show no significant differences between 1 and 3 feet of cover and
        between 2 and 3 feet of cover to demonstrate the adequacy of the 1- and 2-foot covers.
       COPC Concentrations in Soil: No significant difference, as determined by an analysis of variance
        (ANOVA) test with a p-value of 0.05, in COPC concentrations in composite soil samples collected
        from three or more locations in the 1- and 2-foot cover test plots and composite samples
        collected from the 3-foot cover test plot. The composite samples shall be taken from 0 to 3 inches
        beneath the ground surface. T-tests shall show no significant differences between 1 and 3 feet of
        cover and between 2 and 3 feet of cover to demonstrate the adequacy of the 1- and 2-foot

The thicker the soil cap, the more likely successful re-vegetation will be established and the less likely
metals will be taken up through plant roots to the above-ground portion of the plant. If looked at from
a standpoint of protecting the remedy, any soil cap less than 3-feet cannot be considered permanently

                                                 Page 11
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                                March 2010

protective, even if small trees are allowed to grow due to their potential for uprooting and compromise
of the cover in wind- driven events. A 1-ft cover would require the implementation of Institutional
Controls to maintain the cover thickness and likely would end up in high ongoing maintenance costs and
ultimately require replacement on a periodic basis.

Recommendations: The Plan should be modified and require additional samples (at least ten) be taken
from each test plots and to a depth of at least 18 inches on each plot. All tests should be done over a
period of at least 12 years to produce data more representative of the long-term performance that will
be required of the final cover and to be consistent with New Mexico Mining Act requirements to
demonstrate a sustainable ecosystem over this time period. The overall performance criteria should be
modified to reflect more realistically measurable and obtainable goals.

    4.3. Tailings Management (Fugitive Dust)

According to the Plan (p. 8), “The contaminated water collected by these systems is pumped to the mill
and used to either transport slurry to the tailing facility during milling operations or is pH-adjusted with
hydrated lime and used for pipeline maintenance and dust suppression at the tailing facility. The
contaminated water is not used in the milling and floatation process due to poor water quality.”

Also according to the Plan (p. 9), “Based on limited information about levels of dust blowing from the
tailing facility and professional judgment, worst case estimates of past exposures to metals
contamination from breathing in tailing dust were too low to result in short- or long-term health effects.
However, intermittently high dust levels could have resulted in short-term eye and respiratory irritation
and an increase risk of respiratory problems in sensitive groups (people with asthma or other respiratory
disease, the elderly, and children). Recent studies indicate that adverse health effects are unlikely

 As noted elsewhere in the Plan (p. 16), “To suppress wind-blown tailing dust, CMI has placed an interim
soil cover on portions of the tailing impoundments following cessation of active deposition. CMI also
uses straw and water to suppress dust at the facility and monitors air quality (particulate matter greater
than 10 microns in size or PM10 monitoring) at six stations surrounding the perimeter of the facility.”
“The land surrounding the tailing facility to the northeast, east, and south includes residential land in
and near Questa and agricultural pasture lands used for farming, irrigation, and livestock grazing.
Commercial uses occur along the highway in Questa. A school is located approximately 1,000 feet
northeast of the facility.”

The Plan concludes (p. 24) “Exposure by inhalation (breathing) of interior dust or particulates (PM10) in
ambient air by residents, school children, workers, and recreational visitors was estimated to pose no
health risk.”

With respect to the Preferred Alternative according to the Plan (p. 64) “The tailing dust control
measures would continue for the duration of tailing disposal operations. The ongoing voluntary air
monitoring program (PM10 monitoring, PM2.5 monitoring during earthmoving remediation activities)
would be incorporated into the CERCLA remedy and a contingency plan for dust suppression would be
implemented in the event of mining-related exceedences of ambient air quality standards beyond the
property boundary that threaten human health.”

                                                  Page 12
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                               March 2010

With all due respect to EPA and other parties’ analysis, we do not feel the problems have been correctly
identified or addressed and that the dust from CMI’s Tailings Facility continues to cause the following
deleterious impacts:

    1.      Physical injury to the public with chronic lung disease, asthma and other lung related illness;
    2.      Significant detriment, nuisance or annoyance to the public;
    3.      Injury or damage to business or property;
    4.      Hazardous conditions on public right of ways; and
    5.      Blight and impairment of property values.

In summary, the public’s health, safety and general welfare are being adversely affected from existing
conditions, and are not addressed by future cleanup efforts. While we wholeheartedly support those
cleanup efforts as a long-term objective to address this and other issues, justice demands that the
current and foreseeable future impacts must also be addressed in a proactive and serious manner.

We appreciate the public health study conducted by the Agency of Toxic Substances and Disease
Registry (ATSDR) on EPA’s behalf. However, the study fails to point out in its conclusion that the present
state of medical/human health toxicology does not provide for a conclusive answer with respect to
health concerns from metals associated with tailings dust. As the study points out, health impacts can
occur from airborne dust alone to those who suffer from existing chronic lung disease, asthma and other
lung related illness.

Recommendation: In conclusion, we are not satisfied that the actions taken thus far by EPA, NMED and
NMMMD have adequately addressed this matter. We demand on behalf of local citizens that the state
and federal agencies do everything within their power to further address this matter. While the
regulatory agencies may view this as a minor issue, in fact the viability of the entire remedy depends on
addressing a successful solution to this most very public aspect of the Plan. Towards that end we ask
that EPA consider the following on an immediate basis:

        Formation of a Task Force mandated with review of CMI’s present Voluntary Dust Control Plan
         and on- the- ground procedures and development of a comprehensive and enforceable plan
         with public input. We ask that principles of environmental justice with a high-level of local
         governmental and citizen involvement be incorporated into this review.
        Immediate implementation of proven Best Management Practices, including the use of chemical
         dust suppressant, such as polymers, currently in use and required at other Superfund sites
         including the 10,000 acre Opportunity Tailings Ponds at the Anaconda Smelter Superfund Site.

    4.4. Solar Pilot Project

According to the Plan (p. 43), “Chevron Technology Ventures, in working with CMI, EPA and the New
Mexico regulatory agencies, plans to construct a 1 megawatt solar energy facility at the northeastern
portion of the tailing facility in 2010. The solar facility is to be operated as a pilot demonstration for a
period of five years and would test concentrating photovoltaic (CPV) technology. In conjunction with the
solar project, CMI would also demonstrate the effectiveness of alternate cover depths of 1, 2, and 3 feet
for the protection of human health and the environment.”

                                                  Page 13
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                              March 2010

Also according to the Plan, “In a joint letter from EPA, NMED and MMD, dated November 13, 2009, the
agencies agreed that if a 1-foot or 2-foot thick cover is demonstrated to be successful in the five-year
pilot, the CERCLA remedy would be modified accordingly and NMED and MMD would support a request
to modify permits DP-933 and TA001RE-96-1 as appropriate.”

As previously mentioned, we do not believe a five-year period is adequate to test, much less
demonstrate, the effectiveness of various cover thickness to achieve the stated performance objectives.
In addition, public perception of the solar project suggests that this proposal will only benefit CMI and
lead to a compromised remedy. While we support the pilot from a general viewpoint based on the use
of already disturbed land to produce renewable energy from solar power, the pilot must not be allowed
to compromise or otherwise undermine the preferred alternative that requires a 3-ft cover soil depth.
From a technical viewpoint, the use of the site as an industrial facility (solar power generation) and
wildlife area are not compatible and should not be attempted at the same time. Provided the remedy is
maintained in a manner protective of human health and the environment, as well as mindful of local
opinions and desires, we believe that it is enough of a contribution to the local economy to only utilize
the tailings facility to produce renewable energy as a post-mining land use without simultaneously
obtaining a PMLU that supports wildlife.

Recommendation: It is recommended that the ROD require a longer demonstration period, even if it
causes technical and administrative difficulties in addressing vegetation related performance issues. It is
further recommended that CMI consider and the agencies allow a different type of cover system more
consistent with industrial use, including a zero-infiltration system such as asphalt or other impermeable
surface that also resists erosion and dust creation.

5. Red River, Riparian, and South of Tailing Facility Area

EPA’s Preferred Alternative is Subalternative 3B – Removal of Soil and Tailing Spill Deposits and On-Site

    5.1. Red River Remediation and Restoration

According to the Plan (p. 113), “The Preferred Alternative for removing contaminated soil/tailing with
on-Site disposal is selected over the other alternatives because it is expected to achieve long-term risk
reduction through removal of the source and direct exposure pathway. It is also expected to reduce the
risk within a reasonable timeframe and at less cost than the off-Site disposal alternative.”

Most members of the public do not understand what if anything, is being done to address past, present
or future impacts from the mine and the Red River. The Plan does not address past impacts to the River,
including to the River bed (e.g. cobbles and sediment cementing from water chemistry impacts),
potentially caused or exacerbated by mining. Some members of the public believe the conclusion of the
United States Geological Survey (USGS) study on the Red River was there are no impacts due to mining,
rather than identifying natural geochemically altered areas as an additional potential source to Red
River water quality and geomorphologic issues. The EPA has determined that the existing and/or future
condition achieved by the Plan will result in a condition that is protective of the Red River environment
and the associated human health of those who use the river for recreational (swimming or fishing)

                                                 Page 14
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                                March 2010

While we are not surprised by the approach taken by the EPA Plan, the absence of any mention of
restoration related activities being undertaken by the State of New Mexico (Office of Natural Resource
Trustee) is notable, and leads to a lack of clear understanding as to the ultimate goal for remediation
and restoration of the Red River. Given that this has been a primary objective for the interested and
involved public, the absence of any mention of restoration leads to the conclusion that the remediation
plan is deficient.

We recognize the separate nature of remediation and restoration as defined by the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA). However, the lack of public
involvement/communication by the Office of Natural Resource Trustee creates uncertainty that
restoration will be addressed, and result in the desired outcome for the Red River, namely that of
achieving pre-mining resource quality. Technically, it is desirable to be able to identify the extent to
which remediation and restoration represent a seamless effort that does not leave a significant gap
between those efforts. Economically, it is desirable to interweave remediation and restoration, thereby
achieving cost efficiencies and, savings where possible.

Recommendation: Without discussion of the restoration plan by the Office of Natural Resource
Trustee, the perception of the remediation Plan proposed by EPA is that it is incomplete and does not
address cleanup of the Red River. It is recommended that the Office of Natural Resource Trustee
release its plan in a timely manner to allow for public understanding of the entire effort under CERCLA.
The restoration plan must be coordinated with the remediation plan, and be included in the ROD.

    5.2. Enhanced Capture and Management of Mine Site Area Seeps and Springs

We assumed optimized capture and treatment was a part of the Preferred Alternative for the mine site
waste rock piles and would result in protection of the Red River from associated discharges. As further
elaborated by Deborah Miller, Village of Questa Technical Advisor, it is recommended that the Preferred
Alternative in the Plan be modified to require enhanced capture and treatment of all groundwater
associated with waste rock piles in order to protect the water quality of the Red River.

    5.3. Riparian

The Riparian area consists of the floodplain of the Red River as it runs from the Mine Site to the tailing
facility. The 9-mile-long tailing pipeline runs through the Riparian area and has been the source of
numerous tailing spills over the life of the mine. Part of a tailing spill was removed from the Lower
Dump Sump area in 2003; another 3,800 yd3 of spilled tailing remains in this area today (p. 21). Tailings
have also been spilled into Hunt’s Pond in the Riparian area.

Local residents are not convinced that EPA has identified all areas of tailings spills. Based on their
experience, we would not be surprised if additional tailings deposits in the riparian area are discovered
during or post-remediation. Another point of confusion is understanding what constitutes the “riparian”
area and how tailings spills outside of that area are to be addressed, if at all.

Recommendation: The ROD should allow for the potential discovery and remediation of additional
areas of tailings spills identified either during or following remediation activities. The ROD should also
specify “riparian” areas and address how tailings identified outside of such areas will be remediated,
particularly in those areas in close proximity to residential property. ALL spilled tailing material should
be removed from the Riparian area and within 300 ft of all residential properties to avoid possibility of

                                                  Page 15
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                                  March 2010

contamination of private property due to potential contaminant migration and incidental exposure or
residents, in particular children.

    5.4. South of Tailing Facility Area

According to the Plan (p. 22), “The area south of the tailing facility is characterized by primarily
molybdenum contamination (0.75-596 mg/kg) in surface soil, with the highest concentrations occurring
near the Outfall 002 discharge point and the Red River. Local residents claim that livestock (cattle,
sheep) became ill after grazing in the valley. Symptoms described by residents were indicative of
molybdenosis, a copper deficiency caused by increased uptake of molybdenum. EPA’s Site-specific PRGs
for molybdenum in soil are 11 mg/kg for protection of livestock, 41 mg/kg for protection of other large
herbivorous mammals (deer and elk) and 54 mg/kg for the protection of other wildlife (birds).” “The
area of soil with molybdenum concentrations exceeding 11 mg/kg is approximately 8 acres. The volume
of contaminated soil is about 26,000 yd3. The source of the molybdenum is the tailing facility”.

The Proposed Plan calls for removing the 26,000 yd3 of contaminated soil over 8 acres and to a depth of
2 feet and disposing of this soil at the Tailing Facility. The Plan also calls for providing copper-salt blocks
to livestock owners to prevent molybdenosis (p. 75).

We support the Preferred Alternative for this area and the removal of the remaining 3,800 yd3 of spilled
tailings at the Lower Dump Sump.

Recommendation: All tailings and mine waste in the Riparian area, and south of the tailing facility must
be removed from the floodplain of the Red River to prevent ongoing contamination from residual tailing

6. Eagle Rock Lake

EPA’s Preferred Alternative is Subalternative 3B – Inlet Storm Water Controls; Dredge Sediments and
On-Site Disposal.

We support the Preferred Alternative and believe this alternative is supported by the majority of Questa
residents who are likely to utilize the lake.

Recommendation: Because the Eagle Rock Lake portion of the Site represents the most publicly
accessible and used area on the Site, and therefore may represent the highest area of present risk at the
site, it should be cleaned up in an expedited manner. We would encourage EPA and CMI to cooperate
to begin cleanup of this area in 2010 or otherwise would encourage EPA to consider treating the
remediation of this area as a time critical removal action.

7. Other Issues

    7.1. Institutional Controls Program and Community Protective Measures Plan

Institutional Controls (ICs) have been identified by EPA as a critical measure to assist communities in
dealing with Superfund and related issues. However, the Plan only provides cursory mention of ICs and

                                                   Page 16
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                               March 2010

limits their definition to that of legal processes, such as restrictive covenants or easements placed upon
the property deed.

According to the Plan (p. 27), “The Institutional Controls or ICs (Conservation Easement and
Restrictive Covenants) established by CMI in May 2009 restrict residential uses at the mine
(including the Mill Area) as well as ground-water and surface-water uses.” The Plan (p. 48) also
identifies that “Many of these alternatives include common components. They are land use controls
(LUCs), including controlling Site access (fencing, signage, etc.) and implementing institutional
controls (restrictive covenants, conservation easement, ground-water use and well drilling
restrictions)…” The Plan (p. 117) defines Institutional Controls as follows:

        Institutional Controls: Ways to reduce risks from contamination at a Superfund site using
        legal processes. Institutional controls can include zoning, deed notices, leases and other

The ideal Superfund cleanup would result in complete elimination of the contamination such that the
problem has been completely remedied and no longer exists. Unfortunately, due to the size and
complexity of large Superfund sites such as the CMI site, and what EPA terms “technical or cost
impracticalities,” waste is often left in place to be contained or otherwise managed for centuries to
come and theoretically in perpetuity. Institutional Controls or ICs are the mechanisms that would
ensure that appropriate measures are taken to control future exposures from waste so as to maintain
the effectiveness of the remedy.

ICs can be grouped into four categories as follow:

        1.      Public access to information and services
        2.      Regulatory mechanisms
        3.      Legal mechanisms
        4.      Operation and Maintenance

The first category, public access to information and services, is typified by mailing of fact sheets and
education programs to ensure the public is aware of potential contamination and maintains the remedy,
as well as takes voluntary precautionary measures. The second category, regulatory mechanisms, uses
government administrative procedures, such as a Development Permit System (zoning) or the
equivalent to ensure that activities are conducted in such a manner as to maintain the remedy. The
third category, legal mechanisms, includes covenants and easements placed on landowners that restrict
or require certain activities, such as weed control.

Operation and maintenance of the remedy is the fourth category of ICs that is often not recognized.
Operation and maintenance of such features as stormwater conveyances and groundwater controls, soil
and other protective covers, vegetation and weed control are essential to controlling exposure when
waste is left in place at Superfund sites. Although it is often envisaged that the potentially responsible
party (in this case, CMI) will conduct these activities in perpetuity, the reality is that no corporation is
likely to exist in perpetuity to conduct such activities. Thus, the concept of financial assurance was
established for most such obligations in the U.S., with one of the sole remaining exceptions being

                                                  Page 17
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                                    March 2010

In order for ICs to be effective, in the case of the first three categories of ICs described, it is widely
accepted that local governments have a clear self-interest in administering such activities. Similarly, it
should be the responsibility of the federal and state governments to ensure that local governments have
the wherewithal and financial ability to conduct operations and maintenance activities as a part of an
Institutional Controls programs. Where the ability of such local government is in question, the state and
federal government agencies should partner with them to ensure they are a participant in any activities.

These findings are clearly supported by EPA regulations and guidance. It is important to note that one
of the stronger messages in the Superfund regulations and guidance has to do with the intent of ICs
programs and how they are to be used. ICs shall not substitute for active response measures and can be
only used to control exposure, not to actually conduct cleanup of contamination. Cleanup must be
conducted to the extent necessary to ensure that an ICs program can be effectively administered both
technically and socio-politically (e.g., so as not to impact redevelopment opportunities due to
unresolved cleanup obligations).

It should be further noted that ICs for the most part have not proven to be effective at ensuring long-
term protectiveness. For the most part, a Records of Decision have only provided the objectives of ICs
without detailing how to implement or enforce them. In addition, the General Accounting Office (GAO)
found that ICs were often misused, resulting in an inadequate remedy. The GAO (2005)1 made three key
recommendations concerning ICs:

        1. Clarification as to appropriate use of Institutional Controls - not to substitute as remedy.
        2. EPA needs to require a federal tracking system together with reporting and monitoring.
        3. ICs should incorporate strategies and tools within EPA’s Institutional Controls Site Manager’s

EPA (2005)2, partly in response to the GAO recommendations, evaluated ICs and realized that “the
fundamental challenge presented by ICs is that, although the Agency frequently relies on ICs to ensure
protectiveness, the responsibility for implementation, monitoring, and enforcement is often under the
jurisdiction of other levels of government and private parties.” The EPA came up with its own
recommendations as to the successful implementation and enforcement of ICs that identified funding
and coordination with local government as being the most important factor. As with any successful
strategy, carefully planning and implementing the remedy with ICs in mind and laying out a clear
strategy for implementation, management and funding are key steps that must be taken.

It is important to note that ICs have proven to be successful at some Superfund sites, with the Bunker
Hill and Midvale Slag Superfund sites in Idaho and Utah respectively, being good examples. Not only
have ICs been successfully implemented and managed, but the communities themselves have been able
to move past their industrial past and Superfund as a result of a combination of adequate cleanup and
ICs. However, there are other examples, such as the Anaconda Smelter Superfund site where, for a lack
of local government interest and state and federal government support, ICs have failed to be instituted
in a timely manner, resulting in significant repercussions to both public perception and economic

  GAO. (2005, January). Report to Congressional Requesters, Hazardous Waste Sites: Improved Effectiveness of
Controls at Sites Could Better Protect . Washington, D.C.: GAO-05-163.
  U.S. EPA. (2005, October). National Strategy to Manage Post Construction Completion Activities at Superfund
Sites . Washington, D.C.: OSWER 9355.0-105.

                                                    Page 18
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                               March 2010

development. We have recently been involved in turning around the ICs program at the Anaconda Site,
and have learned a great deal about the effectiveness and implementation of ICs at mining Superfund

Ultimately, Institutional Controls can be used to address a multitude of relatively small, but highly
significant problems and perceptions that the Superfund remediation process itself cannot address. In
the case of the CMI site, and in particular, community health and related concerns, ICs should be
developed to address local concerns including personal health issues, redevelopment issues, liability
concerns and other matters. Local residents have long expressed concerns regarding domestic
(drinking) water, water lines bedded in tailings, fugitive dust, impacts to acequias, redevelopment
liability, impacts to property rights and values, and other issues raised by the Superfund process.

Recommendations: It is recommended that EPA in the Record of Decision (ROD) provide more details
on the existing and future ICs envisioned for the site. This should include recognition of the need for
governmental ICs programs including a Development Permit System (DPS) (or applicable local zoning
system), Institutional Controls Program (ICP) and Community Protective Measures Plan (CPMP)
developed by the Village of Questa and Taos County with EPA and CMI. Those programs would provide
provisions that would restrict land or resource use at the site, control development activities, and
provide community health information, as well as respond to concerns raised by local residents or
business owners. It is recommended that further decisions related to ICs, and as contained in the ROD
be made pending additional discussions with the Village of Questa and Taos County in this regard. As
part of its Community Health program, R3G plans on providing the Village and County with technical
information and presentations in this regard, and will encourage their involvement.

It is also recommended that the Village, County and EPA, as well as CMI, adhere to the following key
tenets as they develop a comprehensive ICP/CPMP:

       Institutional Controls must minimize inconvenience, cost and loss of land use options to local
       Institutional Controls must utilize, to maximum extent practicable, existing control mechanisms
        and local agencies.
       Institutional Controls must be self-sustaining and impose no additional cost on local
        government, residents, or property owners.

8. Financial Assurance

As Region 6 EPA is aware, Section 108(b) of CERCLA gives EPA the authority to require that classes of
facilities maintain financial responsibility consistent with the degree and duration of risk associated with
the production, transportation, treatment, storage or disposal of hazardous substances.

EPA was sued by various plaintiffs in Sierra Club v. Johnson lawsuit regarding EPA’s responsibilities under
Section 108(b) of CERCLA to promulgate regulations and require financial assurance from industries
handling hazardous waste. The Molycorp mine was a specific topic of the lawsuit. The court found in
favor of the plaintiffs, and in July 2009, EPA announced that it would be requiring financial assurance
from the mining industry. According to EPA, the agency plans to propose a financial responsibility rule
in the spring of 2011 for classes of facilities within the hard-rock mining industry, with a proposal for
additional classes following within a few months.

                                                  Page 19
Comments on the Proposed Cleanup Plan for the Molycorp, Inc. Site
Kuipers & Associates for R3G                                                            March 2010

Presently the Molycorp Inc. Site has financial assurance for mine reclamation and closure totaling
approximately $167 million with the New Mexico Environment Department and New Mexico Mining and
Minerals Division as beneficiaries. Obviously, with an estimated cost of $517 - $883 million for the
preferred alternative (p. 109), based on feasibility study based cost estimating methods, the existing
financial assurance is significantly less than adequate for the site.

EPA has developed draft guidance for hardrock mine site reclamation and financial assurance and also
provided Region 6 with a workshop covering the same guidance. Other EPA regions (e.g. Region 9 and
10) have developed informal or formal interim policy, adopting and implementing the draft guidance.
Recent ROD’s and Consent Decrees have reflected these decisions by EPA.

Recommendations: EPA Region 6 should utilize the draft guidance for hardrock mine site financial
assurance and also require financial assurance as part of the Molycorp Mine Site ROD. In addition we
make the following recommendations:

               New Mexico has a well established methodology for estimating financial assurance that is
        consistent with EPA draft guidance – EPA should coordinate with NMED and MMD in the cost
        estimation using the basic assumptions used by EPA in the Plan.
               EPA should provide technical assistance to NMED in the establishment of assumptions
        and cost estimate methodology for long-term water treatment and other long-term costs such
        as for site operations and maintenance and institutional controls and related programs.
               New Mexico has established interest and inflation rates for the Net Present Value (NPV)
        estimation of financial assurance requirements that reflect a conservative approach and should
        be utilized by EPA for this site.
               EPA should not allow any form of third-party, corporate, or self-guarantee consistent
        with federal regulations concerning corporate financial obligations and should only allow real
        forms of financial assurance that can be readily convertible to cash to be used in the
        establishment or estimation of financial assurance.
               EPA in the ROD should require that adequate financial assurance be estimated and
        established within 90 days of the date of ROD finalization.

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