Last week the EPA officially published its proposal to impose over $7 billion of financial assurance requirements on the owners and operators of currently active or idle hardrock mines and mineral processing facilities. 82 Fed. Reg. 3388 (Jan. 11, 2017). These proposed requirements are intended to cover estimated response costs, natural resource damages, and health assessment costs for which an owner or operator could be liable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) should a hazardous substance release occur. The EPA estimates that 221 hardrock mining facilities would be subject to these proposed requirements, which would be in addition to financial assurance already required by other federal or state agencies for things such as closure and reclamation. The deadline for submitting comments on the EPA’s proposal is March 13, 2017.
Continue Reading EPA Proposes to Require $7+ Billion of Financial Assurances from U.S. Hardrock Mining Industry Under CERCLA Section 108(b)
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Financial Assurance Requirements are on the Horizon for Hard Rock Miners
By Mike Mills & Tom Henry on
Posted in Mining, Regulation
On January 29, 2016, the U.S. Court of Appeals for the District of Columbia Circuit ordered the Environmental Protection Agency (“EPA”) to finalize the long-awaited “financial assurance” regulations under section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”). The hard rock mining industry is first in line to be subject to the new requirements.
The D.C. Circuit’s order is the result of a case brought by several environmental groups against the EPA seeking to force the EPA to put into effect the so-called “financial assurance regulations.”
In enacting CERCLA in 1980, Congress directed the EPA to ensure that companies remain financially capable of cleaning up contaminated sites. These financial assurance rules were intended to prevent companies from creating toxic sites and then becoming financially unable to clean them up, often causing the cleanup to be delayed for years.
In the intervening thirty years since CERCLA took effect, the EPA made little progress toward promulgating any financial assurance regulations, that is, until a court ruling in 2009 (brought by many of the same groups) ordered them to start. Pursuant to the 2009 ruling, the EPA published a notice in the Federal Register designating the hard rock mining industry as its priority for the development of financial responsibility requirements. In making this determination, the EPA cited a heightened “risk” associated with hard rock mining which increases the likelihood of releases of hazardous substances.
Continue Reading Financial Assurance Requirements are on the Horizon for Hard Rock Miners
Miners and States take Notice, the EPA is Updating its CERCLA Financial Responsibility Requirements
By Mike Mills & Eric Skanchy on
Posted in Mining
The U.S. Environmental Protection Agency (“EPA”) has recently announced that it would take steps to finalize rules establishing financial responsibility requirements for hard rock mines under section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”).
Section 108(b) gives the EPA the authority to require certain facilities to have some type of financial security mechanism in place – such as a bond or insurance policy – that can be used to pay for spills or cleanups should a mining or mineral processing company declare bankruptcy or be otherwise unable to conduct necessary response activities. CERCLA requires the financial responsibility to be consistent with the degree of risk associated with the production, transportation, treatment, storage or disposal of hazardous substances.
In 2009, the EPA published a notice in the Federal Register designating the hard rock mining industry as its priority for the development of financial responsibility requirements. In making this determination, the EPA cited a heightened “risk” associated with hard rock mining which increase the likelihood of releases of hazardous substances.
The framework for the new regulations assigns financial responsibility amounts based on a facility’s characteristics (i.e., open pits, waste rock, tailings, heap leach, process ponds, water management, and operations, maintenance and monitoring). Natural resources damages and health assessment costs would be separate fixed amounts imposed on each facility. The financial responsibility requirements are intended to be separate and distinct from other federal closure and reclamation bonding requirements imposed under other statutes.
Continue Reading Miners and States take Notice, the EPA is Updating its CERCLA Financial Responsibility Requirements