An Agrium Inc. manager of mining projects and remediation says his company is “very pleased” with Chief U.S. District Judge B. Lynn Winmill’s March 6 judgment approving a $2 million U.S. government payment to resolve a $10 million lawsuit filed by Nu-West Industries and Nu-West Mining, doing business as Agrium Conda Phosphate Operations near Soda Springs.
In the suit, Nu-West accused the federal government of incompetence for its alleged negligent oversight of four historic phosphate mines on the Caribou-Targhee National Forest in Southeast Idaho.
The U.S. will pay $3.4 million and Nu-West will pay $1.2 million, compensating each other according to costs already paid, creating a net cost to the government of slightly more than $2 million.
“The court finds the proposed consent decree to be procedurally and substantively fair, reasonable, in the public interest, and consistent with the policies of CERCLA,” Winmill concluded.
As a result of Winmill’s ruling, the U.S. will assume a 33 percent allocation of past and future CERCLA (Comprehensive Environmental Response, Compensation and Liability Act) costs incurred by the release of selenium and other hazardous materials at the four sites – the North Mabey Mine, the South Mabey Canyon Mine, the Champ Mine, and the Mountain Fuel Mine. Nu-West would pay the 67 percent balance.
Mitch Hart, Agrium’s mining and remediation manager for Nu-West, told Green Markets that Winmill’s ruling gives the green light for his company to proceed with cleaning up the four mine sites and continue expanding its phosphate mining in Caribou County.
Agrium acquired Nu-West in 1995, inheriting environmental liabilities, including the four contaminated mine sites. By 1997, it was discovered that horses and sheep grazing near phosphate mine sites in Southeast Idaho were dying from selenium poisoning.
Nu-West filed its lawsuit against the U.S. government in September 2009, citing 12 years of frustration and fruitless attempts to get government financial support to accelerate cleanup at the four sites. It said it had already paid $10 million in cleanup costs.
“In an effort to move those projects forward, to get the sites closed and remediation completed, we took certain steps to engage the U.S. government to work with us,” Hart said.
Winmill also upheld allocating $15.5 million in funds the government received from the bankruptcy of Washington Group International in 2004 to apply toward the cleanup of contaminated sites and future costs, dismissing the objections of Huntsman Advanced Minerals and Wells Cargo, which said they also were entitled to the money.
“We’re very pleased, more so than anything to advance the projects. It wasn’t necessarily about money, but to establish a firm process to move the projects forward toward a conclusion,” Hart said.
Nu-West said it discovered in 1997 that the U.S. had conducted water quality studies near the mines from 1989 to 1993 that discovered elevated selenium levels downstream, but did not disclose this to the public or phosphate companies until Nu-West filed a Freedom of Information Act request.
Nu-West and the U.S. Forest Service have negotiated five administrative orders to outline work to be done over the near term at the four contaminated sites, starting this year. Final design on remedial action on the South Mabey Canyon Mine has been done this year. The investigative process at the other three sites either has been initiated or is being finished up, Hart said.
The U.S. government has been leasing phosphate-rich property for mining since the 1950s, collecting rents and royalties. Among previous owners of Nu-West were Agricultural Products, El Paso Chemical, Beker Industries, and the Conda Partnership. Beker mined and processed phosphate until 1985.
