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Citizen Action Establishes a Mine Reclamation Plan

Owners of the Molycorp Mine Agree to Full-Scale Financial Guarantee

The recent victory of a long-standing citizens' effort has been the establishment of strong, enforceable State of New Mexico groundwater protection and mine reclamation permits. Research Director Paul Robinson's work at Southwest Research for the past several years has been to provide policy analysis and technical support for citizens' group Amigos Bravos' campaign to guarantee complete and effective reclamation of the Molycorp mine. This current effort is the latest phase in a 30-year battle to restore the Red River watershed in northern New Mexico. SRIC's commitment to this effort has spanned more than 20-years, since 1980 when Questa residents affected by the mine looked to SRIC for assistance.

The process reached a high point during the past several months, as the key permits and the related financial assurance bonds have approached completion. The permits are necessary to guarantee the stabilization and revegetation of the enormous waste rock piles of the Molycorp. These critical permits, required under the New Mexico Water Quality Act and the New Mexico Mining Act, have progressed significantly during the past four months through a process of informal negotiation.

The more rapid pace of action associated with informal negotiation quickened noticeably following two major developments:

1. a particularly excruciating 8-day groundwater discharge plan hearing in Questa during May and July 2000; and
2. a major change of tone in Molycorp's approach, associated with a new corporate management team.

Finally, in November 2000, more than 14 years after the determination that the New Mexico Ground Water Regulations apply to the Molycorp Mine, NMED announced the issuance of discharge permits for the Molycorp mine that included the first full scale financial assurance to be provided for reclamation of the mine. The permits include mandatory conditions that include a financial commitment from Molycorp guaranteeing approximately $130 million of mine reclamation, revegetation, and post-mining water treatment costs. While considerably less than the more than $350 million bond proposed in Amigos Bravos' "Full Reclamation and Closure Plan for Molycorp Operations," the bond level in DP-1055 is approximately 10-times the level proposed by Molycorp prior to the May and July Discharge Plan Hearing.

While the DP-1055 permit establishes a strong precedent for the bonding of existing mines in the state, it also serves as the basis for the NMED determination that water resources will be protected as required under the New Mexico Mining Act. Therefore, a final Mining Act permit is anticipated that would incorporate the performance standards and bond level set in the discharge permit either directly or by reference. The Mining Act permit revision and discharge plans for the tailings area are also nearing completion, with reclamation bonds anticipated to be in the $25 million range. These permits require that the tailings and the mine waste areas be:

• resloped or regraded;
• covered by three feet of non-acid generating material;
• revegetated to establish a "selfsustaining ecosystem;" and
• maintained in a manner that protects ground water resources for the reasonably foreseeable future.

Not surprisingly, the need to monitoring environmental and regulatory developments related to the Molycorp operation does not end with the issuance of the permit. And Molycorp did not "give up" its long-standing argument that the pollution at the site is natural and not a result of mining activity; rather, it agreed to accept the conditions of the permit while a wide range of additional studies related to their concerns are conducted. The permits, therefore, each require extensive research programs to related to characterization of background water quality, water flow between the mine and tailings sites and the Red River, revegetation performance, cover design and abatement of existing contamination on site, among other areas. The permits also contain requirements for monitoring of contaminant plumes and nearby ground water and surface water resources.

To sustain the capacity of Amigos Bravos or other interested or affected members of the public to review and comment on this material or stay current with the environmental conditions at the site, an extensive technical review and policy analysis capacity will continue to be needed for several years, at the least. The most immediate aspect of this permit implementation-related effort is participation in a working group, established by DP-1055 to develop the Scope of Work for a Questa Mine/Red River Background Groundwater Quality Study to be conducted by United States Geological Survey during the next two to three years. As the key research effort to confirm the origin of natural and mine-related contaminants in the Red River near the mine, the USGS work is central to the full application of New Mexico's ground protection authority. Insuring that the Scope of Work is appropriately focused at the outset and closely monitored during implementation will be the critical process for assuring that the full extent of groundwater impact of the Molycorp mine is recognized and addressed in perpetuity, or as long as it lasts.

In recognition of the importance of effective mine reclamation plans in New Mexico in relation to similar struggles nationally, Southwest Research, Amigos Bravos, and other organizations active on mining issues regionally have formed a New Mexico Mining Action Network to coordinate inter-group activities and raise funds to support the technical, organizing and legal tasks necessary to achieve successful mine reclamation. Along with SRIC and Amigos Bravos, the Network includes:
New Mexico Environmental Law Center
Western Environmental Law Center
Mineral Policy Center
Center for Science in Public Participation
Rio Grande Chapter of Sierra Club
Gila Resource Information Project (GRIP)

This Network is building a program capacity to address the extensive activities needed to insure that the levels of reclamation at the major mines in New Mexico meet the highest available legal and technical standards.

NECESSARY PERMITS

The core documents needed to guarantee a fully effective reclamation plan at the Molycorp operations are:

1. Discharge Permit - 933 Governing groundwater discharges and water resource protection, including a closure plan to prevent groundwater contamination following mining guaranteed by secured financial commitment for the Molycorp Tailings site west of Questa, NM — issued by New Mexico Environment Department Groundwater Protection Bureau;
2. Discharge Permit - 1055 Governing groundwater discharges and water resource protection, including a closure plan to prevent groundwater contamination following mining guaranteed by a secured financial commitment for the Molycorp Mine and associated waste rock piles east of Questa — issued by New Mexico Environment Department Groundwater Protection Bureau; and
3. Mining Act Permit No. TA001RE Requiring a reclamation and closeout plan to assure that the mine site is reclaimed to the level of a "self-sustaining ecosystem" compatible with post-mining land use — issued by Energy, Minerals and natural Resources Department, Mining and Minerals Division, Mining Act Reclamation Bureau.

These three permits are being hammered out concurrently, with each referencing the other in an attempt to provide an effectively interwoven framework.