Nicolet Minerals Co. names three mines for review under the 1998 mining moratorium law

April 24, 2003

Potawatomi challenge Crandon mine application

The Associated Press

MADISON, Wis. - The Forest County Potawatomi argued Thursday that a company that wants to open a zinc and copper mine in northern Wisconsin can't use a Canadian mine as an example of a similar mine that hasn't polluted the environment.

Wisconsin's mining moratorium law requires an applicant to provide an example of a mine that has been closed for at least 10 years without polluting ground or surface water and a mine that has operated for 10 years without pollution before a permit can be granted.

Nicolet Minerals Co. submitted three examples of mines to meet the moratorium law's requirements. But attorneys for the Potawatomi sent a letter to Department of Natural Resources Secretary Scott Hassett claiming that one of the mines hasn't been closed for 10 years.

"If they can't pass the moratorium, they can't issue a permit," said Bill McClenahan, a Potawatomi spokesman. "The environment is as important as life itself."

Calls to Nicolet Minerals' Crandon offices by The Associated Press seeking comment went unanswered Thursday afternoon.

Since 1994, the company has sought state, federal and local permits to mine 55 million tons of ore from a site just south of Crandon.

Supporters say it would bring badly needed jobs to ForestCounty. Opponents, including the Potawatomi, have said the project is too risky because it would damage the environment.

Nicolet Minerals submitted details on the Sacaton mine in Casa Grande, Ariz., as an example of a mine that met both criteria of Wisconsin's mining moratorium.

But the DNR decided in May 2002 that the company didn't submit enough information about that mine and the agency couldn't decide if it was a good example, DNR attorney Charles Hammer said.

Nicolet Minerals also cited the Cullaton mine in the Nunavut Territory in far northwestern Canada as an example of a mine that was closed 10 years without polluting, and the McLaughlin mine in Lower Lake, Calif., as an example of a mine operating cleanly for 10 years.

Potawatomi attorneys said in the letter that the Cullaton mine may still be in the process of closing. They said decommissioning began in 1991, but an abandonment plan wasn't submitted to the Northwest Territories Water Board until 1996.

They also argued that acid from the Cullaton mine killed vegetation, which would be considered environmental damage under Wisconsinlaw. Samples taken from a pool of water near the dead vegetation showed acidic levels that breached the mine's water license, they said.

The letter said Canadian officials also found a lack of monitoring data to determine the full extent of environmental damage from the mine.

Larry Lynch, DNR mining team leader, said the agency was still poring over documents the Potawatomi attached to the letter. He said the DNR may issue an update on any investigations it performs on the Cullaton mine, perhaps before the DNR releases a draft environmental impact statement on the Crandon project early this fall.

Nicolet Minerals has promised more information on the Sacaton mine, Lynch said. If the DNR finds the mine didn't pollute in 10 years of operation or through 10 years of closure, the challenge to the Cullaton mine would be moot. The Sacaton mine would meet both requirements of Wisconsin's law.

The McLaughlin mine or the Cullaton mine alone would not help the company meet the law because they each address only one prong of Wisconsin's moratorium's operating and closure criteria.

Lynch said the agency and Nicolet Minerals would probably hash out whether the Cullaton mine met the criteria at the master hearing on the Crandon mine, likely to take place late next year.

Northern Wisconsin Resource Group, a subsidiary of Nicolet Hardwood Corp. of Laona, bought Nicolet Minerals and its rights to the mine site from BHP Billiton of Australiaearlier this month.

DNR officials say the sale has no bearing on Nicolet's mine application.

State regulators rejected one of three mines that a company planning a northern Wisconsin zinc and copper mine submitted as examples of similar mines that have operated pollution free, authorities said Wednesday.

The state's mining moratorium law requires that those seeking permission for new mine projects submit examples of a similar mine that operated for 10 years without environmental problems and one that has been closed for 10 years, also with a clean environmental record. The rejection of one mine cited by Nicolet Minerals Co. as an example might be a minor setback, but "it certainly doesn't kill the project," said Larry Lynch, a state mining expert in charge of evaluating Nicolet's plan to build the underground zinc and copper mine near Crandon.

The Department of Natural Resources determined the Sacaton Mine, an open-pit copper mine near Casa Grande, Ariz., was not an acceptable example to comply with the moratorium law, Lynch said.

"There is simply not enough information from which to draw any conclusion regarding the mining site's performance in the period following closure," Lynch said. "We suspect that it hasn't caused problems but there is no data to show that."

The mine was one of three examples that Nicolet Minerals submitted to comply with the 1997 moratorium law.

The DNR has not made rulings on whether the other two mines Nicolet Minerals submitted to comply with the moratorium law are acceptable, Lynch said.

Nicolet Minerals, a subsidiary of BHP Billiton, is seeking state and federal permits to remove 55 million tons of zinc and copper ore from the Crandon site located near the headwaters of the Wolf River in northeastern Wisconsin.

Dale Alberts, president of Nicolet Minerals, said the company disagreed with the DNR's decision to reject the Arizona mine.

"We have searched all the monitoring data the state of Arizona has and it clearly demonstrates this has not caused any significant environmental pollution," Alberts said in a telephone interview from Crandon. "We feel it is a valid example to meet the law."

The Cullaton Lake Mine, an underground gold mine in the Northwest Territories of Canada, was submitted as an example of a mine closed for 10 years with no pollution, Alberts said.

The McLaughlin Mine, an open pit copper and gold mine about 70 miles north of San Francisco, was submitted as a mine that has operated for 10 years with no environmental violations, he said.

The author of the state's tough mining moratorium law says the proposed Crandon mine is "ready to go down for the count" following two new developments.

Assembly Minority Leader Spencer Black said today that a DNR opinion on mining safety and a U.S. Supreme Court ruling backing Mole Lake Chippewa water regulation rights are too much for developers of the northern Wisconsin mine to overcome.

"I don't know if it's dead ... but it's certainly on its last legs," said Black, D-Madison.

But the president of Nicolet Minerals said today his company will not abandon plans to mine copper and zinc, an effort that dates to the 1980s.

"That is wishful thinking on the side of our opponents," said Dale Alberts from his office in Crandon.

The Department of Natural Resources this week said one example of a safe mine submitted by the company does not comply with the state's mining moratorium law. The law requires that any company seeking to dig a sulfide mine in Wisconsin must show a similar mine that operated safely for 10 years and was closed for 10 years with no adverse impact.

Larry Lynch, DNR mining team leader, told the company that Sacaton Mine near Casa Grande, Ariz., "is not acceptable as an example of a mine that has been operated or closed for 10 years without resulting in significant environmental pollution."

Lynch told the company there was "simply not enough information from which to draw any conclusion regarding the mining site's performance."

But in an interview today, Lynch downplayed the impact of the latest development, saying it was "not that major" and just another step in a long process. The DNR is still working to complete an environmental impact statement on the project, an effort that dates back eight years.

Lynch also noted that Nicolet has submitted two other mining sites that are being reviewed to see if they meet the state's mining law.

In a separate development this week, the U.S. Supreme Court denied a petition from the state of Wisconsin challenging the Mole Lake Chippewa's rights to regulate water discharges on its tribal lands. State officials had previously lost an appeal at the federal level in the water rights case.

"It's a one-two punch against the mine," said Black.

But Albert of Nicolet Minerals said his company has always intended to comply with all discharge laws, including those on the reservation. One part of the Crandon mine plans includes discharging water into Mole Lake lands to mitigate environmental impacts on the entire watershed.

Alberts touted the benefits of the proposed mine, a $400 million construction project with an estimated $1.5 billion economic impact. He said it would provide up to 400 jobs over its 30-year life span. BHP Billiton, the parent company of Nicolet Minerals Co., is seeking state, federal and local permits to mine 55 million tons of zinc and copper ore.

June 5, 2002
Contact: Dave Hansen
Ph: (608) 266-5670

(Madison)--Senator Dave Hansen (D-Green Bay) said today that the Department of Natural Resource's rejection of one of the model mines submitted by Nicolet Minerals in support of its Crandon Mine demonstrates the need for passage of additional safeguards to protect the Wolf River and natural resources surrounding the site of the proposed mine.

Citing insufficient environmental data, the Department Natural Resources last week rejected one of the example mines submitted by the owner of the proposed Crandon mine in its attempt to comply with the mining moratorium law.

The DNR notified the owner of the proposed Crandon mine in a May 31 letter that the Sacaton Mine in Arizona is "not acceptable as an example of a mine that has been operated or closed for ten years without resulting in significant environmental pollution." The company submitted the Sacaton mine to satisfy the ten-year operation requirement and ten-year closure requirement specified in the 1998 Mining Moratorium Law.

"The DNR threw out what was supposed to be the best evidence submitted by the mining company that there exists a single sulfide mine that has been both safely operated and reclaimed for an extended period of time," said Senator Dave Hansen, who authored legislation last session that passed the Senate aimed at shoring up mining groundwater regulations. The legislation was not brought up for a vote in the State Assembly.

The DNR's letter of rejection came during the same week that the United States Supreme Court affirmed the right of the Mole Lake Sokaogon Chippewa to regulate water quality on streams and creeks that flow through their reservation near the Crandon mine.

The 1998 Mining Moratorium Law requires mining companies that want to open a mine in Wisconsin to prove a similar mine has operated in North America for at least ten years without polluting and has been closed for ten years without signs of pollution. The owner of the proposed Crandon mine submitted three example mines to comply with the law. The company claims one mine operated without polluting, a second mine was closed for ten years with no signs of pollution, and the third mine (the one the DNR rejected) both operated and closed without polluting.

"This now means the mining company has only submitted data taken from two completely different mines to show that a sulfide mine can be successfully operated for ten years and be safely closed for ten years without polluting," Hansen continued.

"The company has yet to show one mine can be both successfully operated and then closed without polluting ground or surface waters. This causes concern, and only strengthens the case for closing loopholes in mining groundwater closed before any mine proceeds in Wisconsin."

January 31, 1999

Moratorium Example Mines Nothing Like Crandon, Critics Say;
Groups Call For Rule-Making To Stop Inappropriate Mines

Contacts:
Al Gedicks, Wisconsin Resources Protection Council (608) 784-4399 or 785-8457 gedicks.albe@mail.uwlax.edu
Dave Blouin, Mining Impact Coalition, (608) 233-8455 burroak15@aol.com
Zoltán Grossman, Wolf Watershed Educational Project (608) 246-2256 mtn@igc.org

State environmental groups today contended that three example mines submitted on January 5 by Rio Algom, Ltd.'s Nicolet Minerals Co. (NMC) do not meet Wisconsin's Mining Moratorium law's environmental test, and do not prove that there has been a safely operated and closed metallic sulfide mine. The groups say the law is being misused in a way that could potentially allow inappropriate mines to meet the test, and called on DNR to begin public rule-making for the law.

The Mining Moratorium Law, signed by Governor Tommy Thompson last May, asked mining companies to demonstrate that existing technology could safely mine metallic sulfide ores before any new sulfide mines could be built in Wisconsin. NMC has proposed to build a 55-million-ton underground zinc, copper, gold, and silver mine at the headwaters of the Wolf River in northeastern Wisconsin. The groups also released profiles of each of the mines submitted as "examples" for the Moratorium Law. (The profiles are found below in this release. For background on the Moratorium law, see http://treaty.indigenousnative.org/mine-law.html )

The law's author, State Rep. Spencer Black, said that mining companies would be required to offer an example of at least one North American "example mine" that had operated for 10 years and been closed for 10 years without causing pollution. The mine not only would have to lack legal citations within its own jurisdiction, but would have to meet Wisconsin standards as if it was located in the state. Black has criticized the Wisconsin Department of Natural Resources (DNR) recent decision to accept two mines--one open for 10 years but not closed for 10 years, and the other closed for 10 years but not open for 10 years-- in order to meet the law's criteria.

Shortly after passage of the law, DNR Secretary George Meyer had said rules were necessary to implement the law. Since then, the DNR has reversed its position on rules. "On two major issues associated with this law, the DNR has changed its mind in ways that suit the mining industry," said Blouin. "If Wisconsin citizens were not convinced before of the DNR's pro-mining bias, this should end all doubt." The groups will urge concerned citizens to demand that the Natural Resources Board immediately initiate a public rule-making process.

"There is no question that the public expected to see an example mine that had been both operated and closed cleanly," said Al Gedicks, executive secretary of the Wisconsin Resources Protection Council. "NMC wants to combine two of its example mines to somehow form one mine. The McLaughlin mine in California has operated for 10 years, but has not yet closed. The Cullaton Lake mine in Canada has been closed for 10 years, but only operated for a short time. NMC's argument for these mines as examples is deeply flawed." Of the three example mines submitted by NMC, only one--the Sacaton mine in Arizona--has both operated for 10 years and been closed for 10 years. Zoltan Grossman of the Wolf Watershed Education Project said, "Perhaps NMC officials could forego a Florida vacation this year. Instead they should travel to Death Valley for the warmth, and to Nome, Alaska for the beaches. Together, these two spots meet the criteria of a single trip to the sunny Florida coast."

The environmental groups also point out that the three mines bear no resemblance to NMC's proposed Crandon mine in Forest County. The Crandon mine would be built near clean tributaries of the Wolf River, at a site with hundreds of acres of pristine wetlands, trout streams, pure drinking water, and the Mole Lake Chippewa wild rice beds. Dave Blouin, coordinator of Mining Impact Coalition, observed, "NMC's own data shows that the three example mines are in dry or permafrost areas where the types of water pollution of concern at Crandon are physically impossible. Not one of them operated at a site with the extraordinary amount of water that the Crandon mine would have to keep clean. From a common sense standpoint, the example mines simply do not offer any lessons for us in Wisconsin."

Information on each mine submitted by NMC demonstrates that each of the example mines is smaller, ran for a shorter time, and mined different minerals in different rock than the proposed Crandon underground mine, which has a very different massive sulfide geology. "Rio Algom could not find even one of its own mines that has operated and been reclaimed safely," said Gedicks. None of the three example mines used the proposed technologies of the Crandon mine--such as backfilling the mine shaft with sulfide wastes, the use of liner systems beneath tailings, grouting to reduce water flow, or discharge of treated wastewater into the groundwater.

Zoltán Grossman, of the Wolf Watershed Educational Project, commented that "If Rio Algom was really trying to act like 'good neighbor' it wants to be thought of as, it wouldn't be insulting the intelligence of Wisconsin residents. The company is more interested in getting its Crandon mine permitted than showing realistic examples of operations similar to what it proposes at Crandon. It is clear that Rio Algom cannot find a genuinely safe metallic sulfide mine, unless it bends the law with the DNR's help." He added that environmental groups will continue investigating the environmental safety of the three example mines.

PROFILES OF EXAMPLE MINES
(Data for the profiles are primarily from NMC's compliance documents.)

SACATON* COPPER MINE, ARIZONA
The Sacaton mine, operated by Asarco, Inc. on the Gila River Indian Reservation 40 miles south of Phoenix, Arizona, was an open-pit copper mine that operated from 1974 to 1984. It thus operated for just over 10 years, and has been closed for over 10 years. At Sacaton, Asarco mined copper ore with only minor amounts of sulfides present; NMC compliance documents show that the ore averaged between 1.5 and 4% sulfide content. At Crandon, the ore averages between 40 and 50% sulfides and occurs as high as 75%. At Sacaton, rainfall is scarce--about 8 inches a year--compared to more than 30 inches a year near Crandon. The Sacaton mine did not discharge waste water to any streams--taking advantage of desert evaporation--and very little groundwater flowed into the open pit. The small amount of groundwater at the site would not meet federal drinking water standards. At Crandon, more than one million gallons per day of wastewater would be dumped near Swamp Creek, above the Wolf River. In addition, Sacaton was exempted from the state's groundwater protection law--passed two years after it was closed--and so was never monitored by Arizona state regulators. NMC contends that Asarco records would suffice to prove that the mine would meet Wisconsin environmental standards, but environmentalists reply that this claim relies on potentially biased company data.

McLAUGHLIN GOLD MINE, CALIFORNIA
The McLaughlin open-pit gold mine in California, about 70 miles north of San Francisco, was opened by Homestake Mining Co. in 1983; the mine has operated for over 10 years but is not yet closed and reclaimed. The McLaughlin mine does not discharge any wastewater--any excess water evaporates, similar to what took place at the Sacaton mine. Also like at Sacaton, the small amount of groundwater at the McLaughlin site does not meet federal drinking water standards. McLaughlin uses "autoclaving" (pressure cooking) to harvest the gold from the ore, resulting in tailings which have their acid-generating potential neutralized. Without this expensive process, the waste could generate acid, and the mine could not economically operate. McLaughlin was granted an exemption from more restrictive state mine waste siting requirements because it used the autoclaving process, and because there was little clean groundwater to pollute--neither factor would be present at Crandon. The 1000-foot-deep mine pit does not intersect groundwater, and the tailings dump five miles from the mine sits on top of a deep clay deposit in a semi-arid mountain valley. Stormwaters have flooded holding ponds in past years, but the state granted exemptions for the permit violations.

CULLATON LAKE GOLD MINE, NORTHWEST TERRITORIES
The Cullaton Lake gold mine site is owned by the Homestake Canada, Inc. in Canada's Northwest Territories, in an area just north of Manitoba. The area is due to become the new Inuit (Eskimo) territory of Nunavut on April 1. Although the mine is closed, Homestake is still reclaiming the site and closing the tailings ponds. At Cullaton Lake, the sulfides averaged between 1 and 3%. The mine was underground in permafrost, where groundwater was not monitored because it was frozen and could not flow. At Crandon, in contrast, estimates of the amount of water that will flow into the mine range from several hundred to several thousand gallons per minute. Cullaton Lake was in full production under different companies from 1982 to 1985--less than 10 years. Only about 383,000 tons of ore were processed at the site; the Crandon proposal is projected to mine 55 million tons of ore--and so extract more than 146 times more ore than at Cullaton Lake. Six spills or leaks of tailings effluent and a diesel fuel spill were reported at Cullaton Lake in the 1980s, including one tailings pond spill that took place after the mine was closed. According to federal and territorial officials quoted in the compliance documents, permafrost and cold air temperatures are the factors expected to keep the tailings from ever generating acid--factors that would not be found at Crandon. (The compliance documents for this mine consist of territorial records reassembled after a 1997 fire destroyed the originals, and do not yet include any documents directly secured from federal agencies in Ottawa.)

"Mine cited as safe has never been tested"

by Ron Seely, Environmental reporter
Wisconsin State Journal, Saturday, Jan. 9, 1999

Arizona environmental officials say one of the mines cited as non-polluting by a Wisconsin mining company this week has been exempt from that state's ground water regulations since it closed in 1984.

That means regulators can't say whether the closed mine has caused pollution because they haven't checked, officials said.

Nicolet Minerals Co., seeking permits to build an underground zinc and copper mine near Crandon in northeastern Wisconsin, cited Arizona's Sacaton Mine as a mine that meets the requirements of Wisconsin's new mining moratorium law.

Under the law, a company hoping to mine in Wisconsin must submit the name of a similar hard rock mine that has operated for 10 years and has been closed for 10 years without being cited for environmental violations.

This week Nicolet gave the state Department of Natural Resources the names of a gold mine in Northern California, an underground gold mine in the Northwest Territories and the Sacaton Mine in Arizona.

The Sacaton operation was the only one of the three mines submitted that Nicolet said meets both requirements of the moratorium law. Nicolet officials said the open-pit copper mine, south of Phoenix, was not cited for environmental violations during its operation from 1972 to 1984. Nor, the company said, has the mine been cited for violations since it was closed in 1984.

Dale Alberts, public affairs director for Nicolet, said at the time that the company "was pleased to have been able to comply with the toughest test ever put before an industry."

But there is a reason the mine hasn't been cited for violations since it was closed, according to Dennis Turner, aquifer protection mining permit supervisor for the Arizona Department of Environmental Quality.

Turner said Friday that the state's Aquifer Protection Program didn't go into effect until 1986. Because the Sacaton Mine closed in 1984, it is exempt from the law, under which mines would be cited for polluting ground water.

"I can't say whether there is any ground water pollution or not," Turner said. "There just isn't enough data. Since it is exempt from the program, we don't have any data to say one direction or another."

Turner said the agency hasn't been monitoring water quality at the site and that the last records on ground water testing are at least 10 years old.

Canadian official says example mine not comparable to Crandon mine

MADISON, Wis. (AP) -- A small gold mine in far northern Canada might not answer key questions about the environmental safety of a proposed copper and zinc mine in northern Wisconsin, a Canadian official said. Unlike the Crandon mine, the Cullaton Lake Mine is in an area that has a permanent layer of frozen ground underneath, preventing any environmental damage to ground water, said Philipp DiPizzo, an official with the Canadian Nunavut Territory water board.

That could make it difficult for Nicolet Minerals Co. to follow Wisconsin's "mining moratorium" law and present examples of mines in North America that have operated and been closed for 10 years without polluting the environment, DiPizzo said.

In Wisconsin, environmentalists are concerned about potential ground water pollution around the proposed mine site south of Crandon. The site is near the head waters of the pristine Wolf River.

Nicolet chose the Canadian gold mine as an example because it operated in the northern tundra, an environmentally sensitive area, and was located near many bodies of water, company spokesman Dale Alberts said Wednesday.

The fact that the Canadian mine has a layer of permafrost is incidental, Alberts said.

"The bottom line is some folks will not be happy with any of the examples that we selected," Alberts said.

Nicolet Minerals is seeking state and federal permits to remove 55 million tons of mostly zinc and copper ore from an underground mine.

In order to start the mining project, Nicolet has to meet the "mining moratorium law" and other regulations.

The "mining moratorium" law requires that companies seeking to operate mines in Wisconsin show state officials examples of mines that operated for at least 10 years without polluting lakes, rivers or ground water and were closed 10 years without polluting the environment.

Exploration for the Cullaton mine started in 1976 and the mine was opened in 1981, according to officials at Homestake Canada Inc. which owns the mine.

Nicolet cited the Cullaton Lake Mine as has having been closed 10 years without any significant pollution problem.

Nicolet also has cited the McLaughlin mine, an open pit gold mine near San Francisco, as a mine that has been operating 10 years without any pollution.

Sacaton*
*A high school teacher from Hortonville, Wisc., Cliff Morton, took a group of students to the Sacaton mine in Arizona for a class film project. While down at the site on the Gila River Reservation, they noticed a huge building with smaller buildings around it INSIDE the tailings pile area.

They managed to get inside inside, and saw that the entire area had recently been a movie set.The movie was the Gulf War thriller THREE KINGS, with George Clooney and Ice Cube (a great flick...). Apparently some Gila River tribal members were among the "Iraqis" posing in the movie.

The buildings depicted a huge sand palace and outpost of the Iraqi government. The enormous portrait of Saddam Hussein was still on it. Go see the picture: it involves three U.S. soldiers and many Iraqi Shi'ite rebels driving stolen "Kuwaiti" luxury cars all around the area, kicking up lots of dust on the tailings dump. The tailings dump was probably one of the only places near Hollywood where they could find a dusty environment similar to southern Iraq!

Wonder if this constitutes a violation of the Moratorium law? Cliff's e-mail is clif@athenet.net The film will be completed in early 2000.    back

Asarco's Sacaton copper mine on the Gila River Indian Reservation in Arizona was one of the three "example mines" selected by Rio Algom Ltd. in January 1999 as meeting its interpretation of the requirements for a "safe" metallic sulfide mine under Wisconsin's new Mining Moratorium Law.

The abandoned Sacaton mine site, near Casa Grande, was being used at the same time for the filming of the excellent Gulf War thriller THREE KINGS, starring George Clooney, Ice Cube, and Mark Wahlberg as three U.S. soldiers in Iraq. The enormous mine tailings pile offered filmmaker David O. Russell the only location in North America that evoked the flat and extremely dusty environment of southern Iraq. The desert fortress movie set still stands on the mine tailings management area, complete with a huge portrait of Saddam Hussein.

But the story doesn't stop there. In the November 1999 issue of the Hollywood magazine Premiere, film critic Gregg Goldstein wrote the article entitled "King's Ransom," on the making of the movie. On page 116, he describes how the Sacaton mine wastes may have affected Clooney (ironically of "ER" fame):