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Baker Botts’ Bart Seitz Comments on Financial Assurance Requirements for Hardrock Mining Firms

Media Alert
WASHINGTON, December 6, 2016 - On December 1, 2016, the U.S. Environmental Protection Agency (EPA) issued significant proposed new rules for hardrock mining and mineral processing operations across the country. 

According to EPA, these rules are intended to ‘require that owners and operators of certain classes of hardrock mines and mineral processing facilities show financial ability to address risks from hazardous substances. Since the 1980s, EPA has spent considerable resources cleaning up contamination from hardrock mines,’ and through these rules the Agency is seeking to insure that private funding is available to cover the costs of potential future cleanups and natural resource damages. The rules would be promulgated pursuant to section 108(b) of the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9608(b). 

The EPA has estimated that the proposed rules would affect a total of about 221 different mining and mineral processing facilities, ranging from those engaged in the underground or surface mining of “hardrock” minerals (such as copper, gold, iron, lead, silver and titanium), to others performing processing, refining and/or primary smelting of hardrock ores and minerals. 

“EPA’s proposed rules raise a number of important issues for potentially affected companies. For example, EPA has asserted that once implemented, its new financial assurance rules would “complement” and not “preempt” any other similar federal, state or local requirements for financial assurance for covered sectors,” said Washington D.C. Environmental partner, Bart Seitz

Mr. Seitz further notes, “contrary to EPA’s claim, both the mining industry and a number of states are concerned that the proposed rules would actually duplicate existing programs and result in substantial unwarranted costs and regulatory risks for hardrock mining operations.” 

“The EPA has proposed to formally establish a specific set of calculations that industry would be required to use when estimating the dollar amount of their facilities’ financial assurance requirements; these calculations may not follow traditional industry estimation practices and therefore will bear close scrutiny,” Mr. Seitz specified. 

Baker Botts Environmental partner Bart Seitz is available to comment. 

 

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