The quality of our groundwater is important to all of us. Two bills currently before the Legislature, House Bill 220 and House Bill 255, would help to protect groundwater quality at mining operations and help to ensure proper mine reclamation. Importantly, neither of these bills would inhibit or restrain mining operations in Grant County or elsewhere in New Mexico.
The first bill, HB 220, would clarify an ambiguous and confusing provision in the New Mexico Water Quality Act, one that has resulted in extensive litigation, yet remains elusively unclear. The bill would clarify that the effect of pollution on groundwater is determined where the pollution enters groundwater, which is exactly how the Environment Department interpreted and implemented the Water Quality Act for decades. That changed – for copper mines – in 2013 when the Martinez Administration adopted the Copper Mine Rule. The rule allows copper mines to pollute groundwater in excess of groundwater quality standards over large areas of the mine, without even monitoring groundwater quality. And the mine can do so without the need for a variance.
When it passed the Water Quality Act in 1978, the Legislature undeniably recognized that some activities, such as mining, might unavoidably result in pollution of groundwater above water quality standards. The Legislature therefore included a variance provision in the law. Under the variance provision, if compliance with a regulation will impose an undue burden on a company’s lawful business or activity, the company can petition the Water Quality Control Commission for a variance from the regulation. Thus, if its operations will pollute groundwater above the water quality standards, a mining company can seek a variance from the standards, which are part of the water quality regulations.
When it enacted the variance provision, the Legislature wisely placed certain limitations on variances. A variance is limited to a specific period of time, usually five years, although it may be repeatedly renewed for an additional five years. A variance is also limited to a specific area. And after the operations covered by the variance cease, the groundwater must be cleaned up. Perhaps most importantly, a variance is subject to a public participation procedure, which ensures a level of accountability and transparency.
Variances are not just a theoretical or abstract possibility. The Water Quality Control Commission has granted variances for Freeport-McMoRan to expand its Lee Hill leaching operations at the Chino Mine, and to expand its Savannah Pit leaching operations at the Tyrone Mine. These operations were expected to pollute groundwater above water quality standards, so the mines sought variances. As attorney for the New Mexico Environment Department at the time, I signed and filed papers in support of granting the Tyrone variance and renewing the earlier Chino variance. The Water Quality Control Commission readily granted the variances for both mines.
HB 220 would neither change the variance procedure, nor make a variance more difficult to obtain. If HB 220 becomes law, variances will continue to be available to mining companies.
The second bill, HB 255, would prevent a mining company from using a risky corporate guarantee from an affiliated company as financial assurance for completion of mine reclamation. This bill would help ensure that the mining companies – and not the taxpayers – cover the costs of reclaiming and closing a mine site.
Under the New Mexico Mining Act, a mining company is required to prepare a plan to reclaim and close the mine site after mining operations cease. The reclamation and closure requirements include creation of a self-sustaining ecosystem and long-term protection of surface water and groundwater quality. To ensure that the reclamation and closure will be completed, the mining company must post financial assurance as a prerequisite to beginning or continuing mining operations. Financial assurance can take many forms, such as a certificate of deposit, a surety bond, a letter of credit, or an insurance policy. The New Mexico regulations also allow financial assurance in the form of a corporate guarantee, which typically comes from an affiliated company such as a parent or sister company.
A corporate guarantee of an affiliated company is particularly risky. If a mining company goes into bankruptcy, it is likely that its parent and sister companies will also be in financial trouble and will be unable to satisfy the guarantee. This has happened in other states. For this reason, several western states, the U.S. Bureau of Reclamation, and the U.S. Forest Service do not allow corporate guarantees as financial assurance for mines.
HB 255 would disallow this form of financial assurance. Corporate guarantees from affiliated corporations would be phased out over a two-year period to allow mines currently holding these guarantees to obtain other more secure forms of financial assurance.
Copper mining is an important part of New Mexico’s economy. It provides hundreds if not thousands of jobs. It produces a valuable commodity that is essential to the development of renewable energy. Neither of these bills, if enacted, would inhibit mining operations in New Mexico, and they certainly would not put mining companies out of business. Rather, they would help protect New Mexico’s precious groundwater resources and help ensure that mine companies pay the bills for ultimate reclamation and closure of the mines.
Charles de Saillan is a staff attorney with the New Mexico Environmental Law Center. From 1999 through 2013, he worked at the New Mexico Environment Department where he implemented and enforced the Water Quality Act.