Town and mining company collaborating
by Mark Reaman
A momentous agreement to try and end any possibility of industrial scale mining on Mt. Emmons has been reached between the town of Crested Butte and the Mt. Emmons Mining Company (MEMCO). The unique plan relies on a heavyweight mining company asking the U.S. Congress to permanently withdraw mining claims from mining activity along with town voters passing a bond issue that won’t raise taxes. The end result would be a mine-free Red Lady.
The plan is the result of recent collaboration and negotiations with MEMCO, a wholly owned subsidiary of Freeport McMoRan that owns the rights to the molybdenum beneath Mt. Emmons (also called Red Lady) and the town.
It will take the voters of Crested Butte to approve a $2.1 million bond issue this fall and the town and the mining company will have to work together “to complete a disposition of the mining and mill site claims for $2,000,000,” but the first tangible step in that direction has been taken.
On Tuesday, the Crested Butte Town Council unanimously approved a Memorandum of Intent (MOI) with MEMCO along with ballot language for a potential bond approval in the November election.
Town planner Michael Yerman reported to the council September 6 that a MOI had been forged with the mining company to jointly work on a plan that would lead to the U.S. Congress and the president agreeing to a withdrawal of the lands on and around Mt. Emmons from future mining claims under the 1872 General Mining Law.
In exchange, the town would give MEMCO $2 million. Basically, the 9,000 acres of unpatented mining claims held by MEMCO that impact four local watersheds and stretches from Oh-Be-Joyful to behind Whetstone mountain to the base of Carbon Mountain, would go back into the federal land bank and never be allowed to be used for mining purposes in the future.
If the initiative is successful, a major industrial mine would never have the needed land to make any mine feasible. Yerman described the move as historic.
“Today marks the start of a new chapter in the history of Mt. Emmons,” Yerman told the council. “The MOI and the proposed ballot language is the first step to end the threat of mining on Mt. Emmons and begin a new chapter of remediation and working collaboratively on the environmental protection of our water quality.”
Yerman said this step stays in line with the Memorandum of Understanding (MOU) signed last February, when the mining company made it clear it had no intention to develop a mine on Red Lady.
Because a mining company purchased by Freeport once held the rights to the moly mine and the water treatment plant situated just west of Crested Butte, Freeport had some potential liability for water quality issues under federal regulations. So it negotiated the takeover of then mine holder U.S. Energy last winter and signed an MOU with the town, the county and several state regulatory agencies.
The MOU outlined a path to secure the safe, long-term operation of the water treatment plant, upgrade water quality in Coal Creek and possibly eliminate the idea of a mine in that location.
This week’s action speeds up the process and would make a mine impossible at the site.
Freeport would still be responsible for operating the water treatment plant that treats acid mine drainage from the old Keystone mine before it is discharged into Coal Creek.
If Crested Butte voters approve the bond this November, the money would not change hands until the federal withdrawal is completed. “Once these unpatented claims have been federally withdrawn, this will eliminate the threat of a mine of Mt. Emmons,” Yerman stated clearly. “No money is exchanged until that is done.”
Yerman said Freeport would benefit by eliminating the ongoing maintenance fees associated with the unpatented claims, further reducing the operational expenses of running the plant. “The MOI will enhance our efforts toward a long-term solution that is consistent with our town’s environmental values of water quality,” he said. “Both parties worked hard to find common ground and built upon our working relationship … a certain level of trust has been achieved on both sides of the fence to come up with a creative solution to end the threat of mining.”
The bond would not raise taxes on Crested Butte citizens or property. The money would instead be borrowed against future revenues coming into the town’s real estate transfer tax (RETT) fund. Over 15 years, the initial $2,110,000 borrowed would amount to $2,785,000 in repayments at 3.75 percent interest. If repaid in 10 years, the cumulative amount would be under $2.5 million. Annual payments would not exceed $250,000. This cap allows the RETT fund, which is targeted toward open space acquisition, some flexibility.
The RETT brings in about $525,000 annually so this cap on the maximum bond payment would leave funding available for future open space projects.
Councilman Chris Ladoulis said while the patented mining claims holding the ore are not part of the deal, the elimination of the adjacent property from mine operations makes a mine impossible. Yerman said the company needed some land to continue with water treatment plant operations and mine remediation.
Councilman Roland Mason asked for the worst-case scenario. Yerman said if the voters turned down the bond for some reason, the council would have to decide whether or not to use other town money to complete the deal. “But the bond allows the town to not become stressed. That’s why we are not using reserves,” he said.
Town finance director Lois Rozman confirmed that if reserves were used to pay the money, several projects in the town’s five-year plan would be put on hold and services to citizens might have to be cut back.
“We certainly want the support of the citizens on this so let’s focus on that,” said mayor Glenn Michel. “This ends the possibility of a mine on Mt. Emmons so I would encourage the public to support this ballot initiative.”
In response to a question from councilman Jim Schmidt, Yerman said preliminary discussions have been held with U.S. Senator Michael Bennet’s office about how best to deal with the process of a congressional withdrawal of the unpatented claims. Attorney Barbara Green said the senator’s office had been in the loop during negotiations “and we will use their political savvy for the best way to approach (Republican) U.S. Senator [Cory] Gardner’s office.”
Yerman emphasized that the mining company must be the entity to initiate the withdrawal for the action to be considered by Congress. “It is a big deal for Freeport and MEMCO to do the request. That is the only way it could lead to nonpartisan support. That is huge,” he explained. He said that action could take years or even possibly be completed by the end of 2016.
High Country Conservation Advocates executive director Brett Henderson lauded the deal to the council. “We are pleased to support both the proposed ballot measure and the new MOI,” he said. “The intent of the ballot measure, which is aimed at ‘preventing mining activity on Mt. Emmons,’ has been HCCA’s goal since we formed to stop the initial mine proposal in the 1970s.”
Jim Starr, president of the Coal Creek Watershed Coalition, echoed that sentiment. “We are a scientific, non-advocacy organization but we want the water in Coal Creek to be up to standards. This is a huge step in doing that.”
Red Lady Coalition chair Bill Ronai said the RLC supports the action “whole-heartedly. Our group conducted a major economic impact study of the valley and one thing it found was that just the potential of a mine hanging over the valley impacted the valley’s economy to the tune of about a million dollars a year. We will do what we can to help get this through Congress.”
Mine opponent Sue Navy, who was a founding member of HCCA, commented, “This has been a long time in coming. I know it’s not over until it’s over, but this looks great. I want to say thanks.”
Yerman too thanked a number of people and groups in getting the plan on paper. He especially pointed out the efforts of town attorney John Belkin. “This deal would never have happened without the round-the-clock efforts of our town attorney, John Belkin,” he told the council.
“This community will ignite the flame to keep this momentum going,” noted Green.
“Today truly marks a turning point in the history of Crested Butte. It is a win-win for MEMCO and the citizens of our community,” reiterated Yerman. “But it is not over. Our citizens can send a strong message this November.”
As stated in the agreement with MEMCO, “The parties recognize that this MOI is only a first step in a long-term relationship.” In other words, the intent is historic and the first real step has been taken, but there is still a whole lot of work that needs to be completed to reach the goals of the town and the mining company.