Memories of past disasters reinforce present-day fears
By Professor Jan G. Laitos
The use of low-cost cyanide heap leaching techniques to recover metal from ores has allowed miners to profitably extract gold deposits. The chemical compound has on occasion been mishandled, and in some locations releases have created environmental problems. However, worldwide, the mining industry has shown it can work with cyanide responsibly. In part this basically good record is due to an evolving regulatory landscape, and a realization by the mining industry that cyanide spills are to be avoided. Nonetheless, despite a voluntary policing effort by the industry, and the adoption of strict regulations by governments where the mines are located, certain environmental groups have attacked the use of cyanide. These groups often rally the support of local citizens (voters) by conjuring the memories of those disasters. While there have been notable past problems with cyanide, for the most part its use by the mining industry has not resulted in environmental catastrophe.
More than 90% of all gold extracted worldwide relies upon the use of cyanide. Of the 1.1 million tons of hydrogen cyanide (HCN) produced annually, only 6% is converted into sodium cyanide for use in the mining industry. The remaining 94% of hydrogen cyanide is used to produce a wide variety of products, such as adhesives, computer electronics, fire retardants and nylon.
With more than 150 gold mines, Nevada is the hub of the U.S. gold mining industry, accounting for the most exploration and mining activity on federal lands. The State of Nevada alone annually contributes approximately 75% to national U.S. gold production. States that currently use cyanide leaching to recover metals from ore are: Arizona, California, Colorado, Idaho, Montana, Nevada, Utah, South Carolina, South Dakota and Washington.
Cyanide solution can be used for both heap leaching and vat leaching applications. Heap leaching is by far the widest application and the most controversial.
Mines contain the cyanide solution by placing multiple “impermeable” liners at the base of heap leaching stockpiles and along the bottom of leachate collection ponds. During operations, the cyanide solution is collected and processed. When the mine is closed, there is a short- and long-term cleanup plan to detoxify the solution so that no residual cyanide remains to harm the environment. The detoxification and neutralization process converts cyanide into a less toxic cyanate, before combining it with the mine tailings. Some operations may also use water treatment facilities to treat and neutralize effluent discharge. Any remaining cyanide decomposes naturally as sunlight breaks the compound into carbon and nitrogen.
Cyanide is a naturally occurring compound that bonds with gold, allowing it to be brought into solution. It can easily be separated from gold for collection. It is a simple, cost effective process. No suitable alternatives exist. In other words, banning the use of cyanide in effect bans the extraction and production of gold. Gravity separation works well with lodes or veins, but there are few of those types of deposits to be found. Froth flotation is not efficient enough to process low grade gold deposits. Amalgamation, which is used extensively by artisanal miners, requires the use of even more toxic mercury in solution.
Cyanide releases into the environment do represent potential environmental and health hazards. The adverse effects caused by cyanide releases, however, are normally acute and short-term in nature, lasting only hours or days. As a result of rapid decomposition, cyanide releases are not generally associated with continued long-term effects. Despite this biological reality and the benefits of its use, it is a substance which has become the target of much regulation.
Limits on Cyanide Use in Mines
There are currently four ways by which the use cyanide can be banned, regulated, limited and conditioned. These methods include voluntary initiatives, state and local regulations, including outright bans, federal international laws and treaties, and multinational agreements. The International Cyanide Management Code is a voluntary best practices code of regulations. It was prompted in response to a cyanide spill in Romania in January 2000. A tailings dam ruptured at a mine operated by Aural S.A., releasing about 100,000 m3 of liquid and suspended waste. The tragedy was blamed on a combination of design defects, unexpected operating conditions, and bad weather conditions. A plume of cyanide solution worked its way through Hungary and Yugoslavia on the Danube River all the way to the Black Sea. Prior to the Fukushima disaster in Japan last year, the Baia Mare spill has often been referred to as the worst environmental disaster since Chernobyl.
In the U.S., state and local cyanide regulations are typically based on the U.S. Bureau of Land Management’s (BLM) national cyanide policy. The mine must have the ability to contain any process using cyanide so that it withstands the run-off from a 24-hour storm with a 100-year reoccurrence interval. The state BLM office prepares a cyanide management plan before permits are issued to mine applicants.
Another reoccurring theme is that the closure operations should not allow any residual cyanide problems. Nevada leads the way in conforming to BLM’s cyanide containment policy. Nevada’s Bureau of Mining Regulation and Reclamation’s policy is set out in “Preparation Requirements and Guidelines for Permanent Closure Plans and Final Closure Reports” (NRS 445A). It applies to all mines on any property. It primarily ensures that waters of the state are not degraded after mining operations have ceased. BLM will not consider approval of mine closure without a satisfactory closure report. For individual sources nearing closure, all heap leaching pads and tailing impoundments must be neutralized; prior detoxification historic chemical use and materials characterization must be detailed in a closure report.
In the U.S., Montana currently has the only state-wide complete ban on the use of cyanide heap-leach processes, and prohibits any new open-pit gold or silver mines. Only open-pit mining operations with a valid permit before November, 1998 are exempted. This ban is in place as a result of Citizens Initiative 137 (I-137), enacted in 1998. This ban remains in effect.
The cyanide ban stopped the Canyon Resources Seven-up Pete project—a proposed gold mine that could have been worth $10 billion today. Canyon Resources tried unsuccessfully to overturn the Montana law in court. The argument on the part of Canyon Resources was that the ban in effect worked an unconstitutional and uncompensated taking of its property. One day the project was worth $3 billion and the next day, after the ban, it is worthless.
Montana Senate Bill 306, vetoed by the governor May 12, 2011, would have amended the 1998 cyanide ban to allow any new or existing open-pit mine to process its ore at cyanide leach operations that existed in 1998, and which were exempted from the ban. There are only two such exempted facilities in the state, neither of which has much additional capacity to leach imported ore. SB 306 would have also allowed for the development of new open-pit gold and silver mines.
Montana has gold and it could benefit from the jobs and revenue that gold mining would bring. The state seems to be trying to strike a balance between those who oppose cyanide at all costs—those who believe no matter how carefully it is used, it will harm the environment—and those that realize that, if it’s carefully monitored and regulated, cyanide can be used in an effective, environmentally safe, and cost efficient manner.
The Idaho Surface Mining Act of 1971, effective as of 2005, requires any mining operation using cyanidation facilities to provide financial assurance. Cyanidation facility operators may be required to provide up to $5 million in financial assurance. An even greater amount of financial assurance may be required if the Idaho Board of Land Commissioners deems it necessary. The Act also ensures that all approved cyanide closure activities protect the soil and groundwater at and surrounding the site. Essentially Idaho is primarily concerned with closure activities. Its Mining Act is designed ensure that enough financial assurances exist to pay for any cleanup, so the state and taxpayers are not left high and dry, which was the case in Colorado with the Summitville cyanide disaster.
Galactic Resources’ Summitville mine in Colorado, which should probably not have been permitted in the first place, was not followed carefully by state regulators. In 1991, it produced a high country disaster and destroyed a large stretch of the Alamosa River, when 85,000 gallons of cyanide-laced water leaked through damaged leach pad liners. Summitville seared into the consciousness of Colorado and Montana that cyanide produces disasters. The I-137 ban on cyanide in Montana was influenced in large part by the Summitville disaster in Colorado.
Oregon is the only state that has developed a specific regulatory program for cyanide leaching operations and facilities. It is carried out by the state’s Department of Environmental Quality (DEQ). Oregon has an extensive regulatory plan for cyanide, but no mines.
The U.S. federal government has laws that, at most, indirectly regulate cyanide when used in mining operations. There is no federal anti-cyanide statute for mining. Federal statutes that will affect the use of cyanide include the Clean Water Act (CWA), the Endangered Species Act (ESA), the National Environmental Policy Act (NEPA), the Federal Land Policy Management Act (FLPMA) and the National Forest Management Act. Those are the five statutes that will be used by litigators to challenge cyanide operations on federal lands. Of those five statutes, the one that is the most powerful—an almost certain veto of a mine considering the use of cyanide—is the Endangered Species Act. If a mine using cyanide might adversely affect an endangered species, that mine itself will become endangered if there is not a terrific mitigation plan in place for the species and its habitat. The CWA can also be a deterrent to the opening of a mine using cyanide.
Federal and State Litigation Relating to Cyanide in Mining
In the U.S., several cases have been brought that deal with cyanide. These cases serve as precedent domestically and internationally.
In Seven-up Pete Venture v. Montana (2005), plaintiffs, Canyon Resources, argued that Montana’s complete ban on cyanide leaching constituted a taking under the 5th Amendment to the U.S. Constitution, or a violation of the Contracts Clause of Article I, sec. 10 of the Constitution. The imposition of Montana’s I-137 had resulted in the forfeiture of a pending mineral lease permit for the Seven-up Pete Venture mine, because the application had not been completed before the exemption date.
The court ruled that, no, the Seven-up Pete Venture’s opportunity to seek a permit did not constitute a property right and thus a taking had not occurred. Although I-137 substantially impaired Venture’s contractual relationship with the state by banning all future development using cyanide leaching, the ban did not violate the Contract Clause because the state could nevertheless legitimately determine that cyanide leaching operations required strict regulation, and I-137 was reasonably related to that legitimate purpose.
After the Montana state courts held against Canyon Resources, the plaintiff sought relief in federal courts. The federal courts refused to hear the case, stating, in effect, that Canyon Resources had only “one bite out of the apple,” and that bite was state courts. Canyon could not then return to federal courts to have the case reviewed by federal judges. The plaintiff did not get a second chance, and the Montana cyanide ban effectively halted the gold mine that had been planned.
In Colorado, Summit County enacted an ordinance banning cyanide or other toxic/acidic chemicals in leaching operations for all zoning districts in the county. The state mining association brought action in state court. In Colorado Mining Association v. Board of County Commissioners of Summit County (2009), the mining association argued that the Colorado Mined Land Reclamation Act (MLRA) expressly or impliedly preempted Summit County ordinance section 3812.04 prohibiting cyanide uses within the county.
The court ruled in favor of the plaintiff, saying the MLRA impliedly preempts Summit County’s ordinance banning the use of cyanide leaching. Preemption was present, foreclosing county rules on cyanide, because the MLRA, and its 1993 amendment, grants exclusive authority to the Mined Land Reclamation Board to specifically regulate cyanide mineral leaching. The decision indicates that only an amendment to the state law, or a complete rescission of the MLRA, could permit a local government authority in Colorado to prohibit the use of cyanide leaching. Summit County tried to do what Montana did, and place a ban on cyanide all together. In Colorado, only the state can do that.
In Gros Ventre Tribe v. U.S. (2006), the Tribe filed suit against the BLM, the Montana Department of Environment Quality, and the owners of the Zortman-Landusky mine complex in Montana. The lawsuit was brought under the CWA, where the Tribe sought a writ of mandamus to compel necessary reclamation, contending pollution from the mine’s tailings and acid drainage had contaminated the quality of water resources. The Tribe’s central assertion was that the government had breached its trust responsibility to it by approving and permitting the mine, but failing to reclaim both mine sites in violation of NEPA and FLPMA. Various environmental groups alleged that the Zortman-Landusky mine complex experienced more than a dozen cyanide spills, including one that released approximately 50,000 gallons of cyanide solution contaminating the community water supply.
The issue with this case was whether the federal government owes a specific or general trust obligation to tribes to take Indian interests into account in issuing mining permits. The court ruled that, no, the government did not owe a general trust obligation to take Tribe’s interests into account regarding mine operations; nor did the government have specific trust obligations based on treaties or agreements with the Tribe. The government had no statutory duty to take discrete nondiscretionary actions under FLPMA, which might have supported a claim that the government had failed to act. And, as a threshold matter, the Tribe did not suffer injury for purposes of standing.
What makes this case significant is that nothing within any of the statutes or treaties offered by the Tribe imposed a specific duty on the federal government to manage non-tribal resources for the benefit of the Tribe. As a result, the Tribe had to rely on the Administrative Procedures Act for a private right of action, and the court found that under this Act they lacked standing. Nor did the Tribe have a cognizable “failure to act” claim, because the Tribe could not assert that the government failed to take a discrete agency action it was legally required to take.
In the minds of Montana voters, the Zortman mine, along with the Colorado Summitville disaster, became symbols of all that was wrong with cyanide in mining operations. Zortman in particular became the functional equivalent of the Romanian cyanide spill that had temporarily contaminated the Danube River—irrefutable proof positive that cyanide inevitably produces environmental disasters. Montana’s I-137 initiative banning cyanide was the political outgrowth of this attitude about cyanide.
Colorado was similarly affected by the Summitville cyanide spill. In 1992, Galactic Resources abandoned the Summitville mine in Colorado after repeatedly failing to contain cyanide leaks, control acidic rock discharges, and properly treat effluent waste. As a result, most all aquatic species in a 22-mile stretch of the Alamosa River were killed. Since Galactic Resources was a Canadian company, it was out of easy reach of Colorado regulators, and it eventually went bankrupt. The Colorado Department of Natural Resources and the EPA intervened under CERCLA, and the Summitville site eventually was added as a superfund site. In the minds of Colorado voters, particularly in Summit County, cyanide use in mining not only was fraught with danger for the environment, the miners who used cyanide were too perceived to be the irresponsible mine-owners like the ones who allowed the Summitville disaster to unfold.
In Aztec Minerals Corp v. Romer (1996), the plaintiffs, who owned the land upon which the Summitville mine was located and had leased it to Galactic Resources, filed suit against the State of Colorado. The lawsuit claimed the state had failed to inform them of the environmental risks and liabilities associated with Galactic Resource’s mine; improperly granted permits to Galactic Resources; and failed adequately to regulate mine operations.
The ultimate question was whether the state owed the plaintiffs a duty of care under one of the exceptions to the Governmental Immunities Act (GIA). The court ruled that, no, the state did not owe a duty of care to the plaintiffs because none of the listed exceptions to the GIA either explicitly or implicitly waived sovereign immunity for the negligence of the Department of Public Health and Environment in issuing a point source discharge permit to Galactic Resources. Colorado had conceded that there was disaster, but it was immune, and the landowner should have brought suit against Galactic Resources, which unfortunately was bankrupt.
Idaho Rivers United v. National Marine Fisheries Service (1995) raised the question of whether it was arbitrary and capricious for the U.S. Forest Service to issue an NMFS Biological Opinion (BO), stating that no adverse effects would occur to Chinook Salmon (a species listed under the ESA) as a result of the proposed cyanide mineral leaching operations at the Beartrack mine in Idaho. The court said it was arbitrary and capricious to issue to BO and ordered the USFS and NMFS to reconsider permits for the Beartrack mine project because of deficiencies in the BO.
Everyone needs to be aware of this case in Idaho. The lawsuit said that when there was a chance that a mine using cyanide might threaten some endangered species, a reviewing court will look quite carefully at whether the permitting agency and the U.S. FWS had complied with the letter and spirit of the ESA. In this case, the cyanide was thought to affect Chinook Salmon.
Treaties and Other Multinational Agreements
How important are treaties and other multi-national agreements? Are they potential regulatory tools as well? The answer is yes. Glamis Gold v. U.S. is a classic example. Glamis Gold tried to use Section 11 of the North American Free Trade Agreement (NAFTA) to ask for arbitration, saying investors had been harmed and that California had expropriated their investments and denied them minimum standards by imposing strict cyanide regulations on its mine in the state.
Glamis Gold was a Canadian company acting through its U.S. subsidiary. It proposed to construct the Glamis Imperial Project—an open-pit mine within the Quechan Tribe’s sacred “spiritual path” across the Imperial Desert of California. In response to public and tribal protest, the California Mining Board adopted emergency regulations requiring operators to backfill all operations to “achieve the approximate original contours of the mined land prior to mining activities.” In support of the board’s emergency action, the California legislature enacted Senate Bill 22, which required complete backfilling and grading for mining operations within 1 mile of Native American sacred sites.
This reclamation requirement rendered Glamis’ Imperial mine project financially unfeasible. In 2003, Glamis Gold submitted a request for an arbitration panel to review whether it had been denied its investment, and sought $50 million from the U.S. for California’s actions. Glamis Gold also alleged that California’s Senate Bill 22 and other regulations had violated NAFTA, Section 11, resulting in expropriation of its investments, and denial of minimum standard of treatment under international law. Section 11 requires NAFTA parties to afford investors “national treatment,” which means to comply with international law—including fair and equitable treatment—in dealing with their investments, and to refrain from acting in a manner that either expropriates their property or is tantamount to an expropriation without compensation.
In 2009, the NAFTA Tribunal dismissed Glamis Gold’s claim in its entirety and ordered the company to pay two-thirds of the arbitration costs in the case.
Country-specific Regulations on Cyanide
Argentina has become an active region for gold prospecting and mining. Because of fears about cyanide, its use in mines has been heavily regulated or even banned. The impetus for these restrictions is in part because America has successfully “exported” environmental concerns about cyanide practices. For example, Greenpeace has spread the proverbial “fear of God” in many of the Argentinean provinces about cyanide.
As a result, many provinces in Argentina banned the use of cyanide in mining operations. At one time, these included the provinces of Rio Negro and Chubut, Tucumán, La Pampa, Córdoba, San Luis, and La Rioja. In Provincia de Río Negro, the legislature passed a bill in 2005 banning cyanide and mercury use in metallic minerals mining, production, and industrialization. In Provincia de Chubut, the province enacted a moratorium on open-pit mining and cyanide mineral leaching operations in 2003.
These flat bans are being challenged as unconstitutional. Some Argentine mining lawyers have argued, in some cases successfully, that provincial bans on cyanide leaching are unconstitutional because they conflict with Section III of the Argentine Constitution. Several of these bans, however, remain in place. Citing the cyanide spills of Summitville, Zortman, and Romania, many South American countries remain wary of cyanide.
Costa Rica has banned cyanide. In 2010, the president signed a decree completely banning all open-pit mines and cyanide mineral leaching operations. The ban was motivated by environmental degradation and a repeated failure to operate and control cyanide leaching facilities safely.
Europe has been resisting the idea of a complete ban, but it has a very low threshold of tolerance for cyanide use. The European Union (EU) has set the most stringent cyanide limits for tailings ponds in the world—Adopted Directive 2006/21/EC, on the management of waste from mineral extraction operations. Article 13(6) requires “the concentration of weak acid dissociable cyanide in the pond [be] reduced to the lowest possible level using best available techniques.” All mines started after May 1, 2008, may not discharge waste containing more than 10 ppm WAD cyanide, and mines built or permitted before that date are allowed no more than 50 ppm initially, falling to 25 ppm in 2013 and 10 ppm by 2018. Article 14 also requires that mine operators put in place financial guarantees to ensure cleanup after the mine has finished. In 2006, the EU rejected a proposal to ban all cyanide use. The EU presumed that stringent regulations already in place provide adequate environmental and human health protection.
Germany passed a decree in 2002 prohibiting mines from using cyanide leaching processes. The Czech Senate of August 2002 and Czech Parliament of September 2000, made decisions to forbid gold production through cyanide leaching in the Czech Republic domain (Mining Law of 1991, Article 30). In 1997 the Turkish Council of State decided not to allow gold production through cyanide leaching, on the basis of article 56 of the Turkish Constitution, which guarantees the right of people to live in a healthy environment. Hungary bans the use of cyanide at mine sites.
The Future of Cyanide Regulation in the U.S.
Will cyanide eventually be outlawed in the U.S.? The EPA is very interested in mercury contamination, which is a byproduct of some metal mining operations. It may turn its sights on cyanide next. Colorado is still considering a ban. Other states besides Montana might consider bans if there are any more Summitville or Zortman incidents. Mine operators should make certain that there are no more Summitville or Zortman cases, and be particularly careful to protect wildlife and the environment when using cyanide. Nothing will stop commodity-extractive industries faster than harmed wildlife—almost more so than the loss of human life. If wildlife is impacted by a mining operation, the regulatory forces will stop it cold. And, if there are any more disasters like Summitville or Zortman, there will be more bans.
Jan Laitos holds the John A. Carver, Jr. Chair at the Sturm College of Law at the University of Denver. This article is based on his presentation at E&MJ’s Mineral Processing conference in October 2011 at Lake Tahoe, Nevada, USA.