Haste, Murphy’s Law contributed to Summitville’s demise

Several post-mortems on the Summitville gold mine have concluded that its ultimate demise ensued from a cascading chain of smaller failures which began well before Galactic Resources (TSE) commissioned the heap-leach operation in the spring of 1986.

The mine, in southern Colorado, operated until early 1992, and during its operating history experienced a number of cyanide spills and leaks from the heap-leach pad lining.

Environmental problems at the site prompted the Colorado Department of Natural Resources to investigate their causes in an attempt to improve future permitting and regulatory decisions.

At the same time, a coalition of mining companies formed the Summitville Study Group and commissioned Knight Piesold & Co. to prepare a factual chronology based on public records. The group includes Gold Fields Mining, Amax Gold, Newmont Gold, the Mineral Policy Center, the University of Nevada and RCG/Hagler Bailly — all of which believe an unbiased background document is required in order to better understand the environmental and regulatory aspects of the Summitville issue.

Neither report attempts to exonerate anyone, and both stress the need for regulators and industry to learn from their mistakes and to support needed reform.

Luke Danielson and Alix McNamara of the Department of Natural Resources say regulators took seriously their legal obligation to promote the development of Colorado’s mineral resources during 1984-87.

“They gave Summitville the benefit of many doubts,” the authors note. “They approved this permit as fast as — maybe faster than — the law allows. All doubtful decisions erred on the side of keeping the mine operating on schedule.”

Large-scale heap leaching was new in Colorado at the time that Summitville was proposed, leaving regulators ill-prepared to make responsible permitting and regulatory decisions related to this technology, particularly as applied to a high-altitude wet climate.

At the same time, Danielson and McNamara say, company officials, local government officials and others “created an atmosphere of pressure” to secure the speediest possible approval for the project, despite many unanswered questions. Consequently, the initial review process was conducted in haste. “The permit was approved before the company’s plan of reclamation was fully developed and the bond proposed was seriously inadequate,” the report states. “The company, responding to internal financial and contractual pressures, constructed the liner in great haste under adverse winter conditions, with very poor results. The company was less than candid about how poor those results were.”

Galactic started constructing leach pads in the winter, despite being warned against this by its design consultant. The construction did not go well, which is not surprising, considering the pad was built on sloping terrain 11,000 ft. above sea level in one of the snowiest parts of the Colorado Rockies. And it resulted in two separate lawsuits (now settled) with companies originally contracted to do the job.

To complicate matters, Galactic placed acid-generating waste into an unlined area originally permitted for pad expansion (and within the same valley as the leach pad), resulting in chronic acid and metal contamination in shallow ground water.

Danielson and McNamara say it became clear in June, 1986, that the upper synthetic liner had been compromised and that cyanide solutions were entering the leak detection system between the upper and lower liners. “Rather than shutting down the project in order to ascertain the extent and seriousness of the problem and devise corrective measures, the operator and the regulators engaged in unreasonably optimistic or wishful thinking, without an adequate technical basis, and allowed loading of the leach pad and leaching to continue.”

The regulators, however, say their confidence in allowing leaching to continue, despite the leaks, was based on the operator’s technical submission. This report indicated that the heap was significantly “water-short” and that the addition of liquids which would be pumped back from the now-contaminated leak detection system would still leave the heap in a negative water balance condition.

By all accounts, this was a fatal mistake. As it turned out, the operator’s engineering calculations were wrong, as was the assumption that evaporation would exceed precipitation. The project water balance was revised no fewer than six times between 1984 and 1992 because of an error stemming from the use of climate baseline data from other sites as representative of Summitville. By this time, however, the heap was heavily loaded and it was deemed impractical to remove ore to try to stop the leak.

“Once it became clear that both upper and lower liners were leaking and that pumping of the underdrain was necessary, the already-serious water balance problems became critical,” Danielson and McNamara explain. “There was nowhere to put the liquid except back on the heap. The heap simply couldn’t accept that much liquid and remain in the permitted zero discharge mode.” At about this time, the Colorado General Assembly slashed funding for the Mined Land program, leaving its staff unable to cope effectively with a problem of this magnitude. It appears, too, that this division and the Water Quality Control Division (WQCD) didn’t always agree on how to administer mine sites. It also took time for some of the regulators to realize that acid drainage and loading of metals were the main concerns as regards contamination — rather than cyanide, which dissipates rapidly in certain environments.

It was because the Summitville project was “seriously underbonded” that the options available to the state were limited. There was no emergency response fund or emergency response mechanism under which state agencies could intervene. Since no intermediate option existed, Danielson and McNamara say, the only alternative was to call in the Superfund program of the federal Environmental Protection Agency (EPA).

The reports prepared on Summitville make few if any references to Galactic’s high-profile founder Robert Friedland, although some of his promotional excesses were noted. Critics argue that Friedland ignored advice that did not conform to his personal agenda and that he left Galactic in 1990 knowing he was leaving behind an economic and environmental failure. (The mine cost $200 million to build, while gold sales netted only $120 million). But some former associates say Friedland was pressured to step down by institutional shareholders because it became apparent he had neither the attention to technical detail nor the appropriate temperament to manage the day-to-day affairs of a mining company. The state of Colorado is investigating the issue of Friedland’s legal liabilities, as well as those of other parties. The Knight & Piesold report takes a deeper look at technical issues, particularly the key issue of past and potential impacts on downstream receiving waters. Most of Summitville’s negative publicity relates to the issue of water quality in the Alamosa River watershed.

Both industry and regulators are having a tough time making the point that the Alamosa River has never had pristine water quality because it is degraded by natural weathering of exposed reactive geologic formations. Water contamination in the Iron, Alum and Bitter Creeks (Alamosa tributaries) is attributed to weathering of these geologic features.

Complicating this is the fact that the site has been intermittently mined since the late 1800s, first by underground and then by open pit. These historic workings and drainage tunnels intercepted reactive sulphide rock, resulting in acid drainage. Since several adits were in the immediate Summitville area, downstream rivers and streams were naturally high in heavy metals and already polluted by historic mining.

Still, both reports conclude that there is “substantial evidence” that leaks and spills at Summitville did degrade water quality. The debate as to the extent of this degradation is complicated by a lack of good baseline water quality data and baseline information on fish populations. These types of studies are routine today but were not legally required in the mid-1980s. Galactic built a water treatment plant in 1989 and was soon able to meet discharge limits for cyanide and copper. But problems arose when it was unable to meet effluent-dissolved silver limits set by the WQCD. Penny McPherson, former environmental manager at Summitville, says the silver limit was extraordinarily stringent — “almost two orders of magnitude less than drinking water.”

The company was never able to comply with this requirement and, as a result, was forced to discharge water through land application. When that failed, it had to return the water to the leach pad. Galactic has argued that, had the WQCD imposed less stringent requirements, it would have been able to continue its remediation plan by being legally entitled to discharge the accumulating water.

But the high costs associated with the effort helped push Galactic into bankruptcy, and the state requested the EPA to assume responsibilities under the emergency response provisions of Superfund.

Paul Jones of the Colorado Mining Association says some mining companies and industry groups tried to help in the clean-up effort at their own expense. The EPA, however, wanted a sizable sum posted up-front as a bond against any further environmental issues related to the volunteer effort. “We were given 30 days to raise US$20 million and it proved to be an impossible task,” Jones says. “We had a lot of companies interested, but only if the EPA was prepared to waive potential liabilities.”

He says the mining industry intends to continue efforts to assist the EPA. Homestake Mining has donated a water treatment plant, and a major engineering firm is still waiting for the EPA to respond to its offer of free consulting time.

“Now that the EPA has started legal measures to identify responsible parties, it is only a remote possibility that the industry will be allowed to participate in the site remediation process,” Jones says. “The system in place is legalistic and antagonistic, and the problem we have is that there is no framework for the industry to work on a volunteer basis.”