CB council, BOCC sign formal mine agreement

Suzie and Denis were there at the beginning, and now the beginning of the end

By Mark Reaman

The Crested Butte Town Council and the Gunnison County commissioners this week agreed to sign the Memorandum of Understanding (MOU) between the government bodies, some state regulatory divisions and the Mt. Emmons Mining Company (MEMC), which is a subsidiary of mining giant Freeport-McMoRan.

MEMC now owns the molybdenum mining rights and associated water treatment plant (WTP) on Mt. Emmons, also known as Red Lady.

The MOU essentially outlines a path for future responsibilities of the parties. The end goal is to ensure the WTP that treats water in Coal Creek above the town of Crested Butte is secure in future operations and molybdenum mining will not take place on the site.

A crowd of almost 50 people attended a rare Friday evening Crested Butte Town Council meeting on February 26 in Jerry’s Gym at the town hall. Town attorney John Belkin presented a summary of the MOU. “This document represents 40 years of effort to the present day,” he said before outlining the recent actions that started last fall and led to the MOU.

“We have had several conversations with representatives of the state and Freeport as recently as one o’clock today and I think we understand each other now,” said Belkin. “We have developed trust and that is something that had been missing in the past.

“Freeport has been clear with what they want and we’ve listened,” he continued. “The town and the county have been straightforward with what we want and Freeport has listened. The MOU contemplates that with time everyone will get what they want. The goals of the MOU are very achievable. It might take two or five or ten years, but I’d venture closer to two.”

The deal has Freeport and the MEMC funding two years’ worth of WTP operating costs immediately.

The parties will all work together to achieve compliance of all environmental laws and issues associated with the site; work to develop site-specific water quality standards for Coal Creek; pursue the disposition of mining and mill site claims and land tied to the claims; and work together with the federal legislative delegation on any mutually acceptable legislation required to implement long-term solutions to a molybdenum mine on Red Lady.

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“The Freeport decision, while a defensive one, was in their best interest and the community’s interest,” said Belkin as he explained that Freeport has ties to the mine site through a 2007 acquisition of Phelps Dodge, which at one time owned the mining rights and built the WTP.

Under federal regulations, once associated to a mine site, a company always has possible liability for that mine site. So if an accident turned it into a federal Superfund area, Freeport could be responsible for the cleanup cost.

“It is all sort of fortuitous how it fell into place,” said Belkin. “It is pretty amazing how we ended up here.”

Last fall the town and county pressed state and federal regulators for some financial “surety” since then-owner U.S. Energy was experiencing financial turmoil. Belkin said after those meetings, “We understand that both the state and Freeport shared conversations with the U.S. Environmental Protection Agency in the context of U.S. Energy’s financial status and the continued operation of the water treatment plant.”

In response to a question from councilman Jim Schmidt, Belkin said Freeport has indicated it would like to cut the annual operating costs of the plant, which is about $2 million per year. That might include a major upgrade to make the plant more modern and efficient. How and when that might happen has yet to be determined. “They are committed to upholding the environmental standards or doing better,” Belkin said.

Councilman Roland Mason wanted to make sure that after the two years’ worth of operating money is spent, the town wouldn’t have to pay for operating the WTP.

Belkin said while the government bodies tried to negotiate more than two years of operating costs, ultimately all the parties were comfortable with the two-year figure and the future.

The bottom line is that Freeport now has responsibility to continue operating the WTP in perpetuity. If for some reason Freeport or MEMC would go into bankruptcy, Belkin said the state and feds are involved and would have to step in and sort out the situation in that unlikely possibility.

“We are comfortable where we are right now and I feel really good about this whole thing,” reiterated Belkin. “I’m happy we’re here.”

So was the public in general. HCCA Red Lady program director Alli Melton said it was “exciting to see this monumental shift in the conversation over the last couple weeks. Now we really need to roll up our sleeves in the next two years and determine a final solution that protects the watershed and the mountain. But this is a historic moment when the mining company has no real interest in mining. We support the council entering into the MOU.”

Red Lady Coalition president Bill Ronai agreed. “This is a good document that sets up a good framework to move forward,” he said. “It protects the water and then sets the stage to address the mining issue. Our board strongly urges the council to sign the MOU.”

Crested Butte resident Sue Navy has been involved in the mining fight since it started almost 40 years ago and was a founding member of HCCA. “Thirty-nine years ago I sat in this very room and heard about the proposal for a mine on Red Lady,” she told the council. “I’ll tell you that this feels a whole lot better being here tonight. Thanks to everyone.”

Jeremy Rubingh has been active in the fight and made a movie about the situation several years ago. He too spoke in favor of having the council sign the MOU, emphasizing that it protects the town’s watershed. He also said he appreciated the inclusive process in getting to an MOU.

In response to a question from Suzanne Pierson, Belkin said once the mining claims and associated lands are “disposed” from the mining company, the land would likely go back under federal control. “There won’t be a waterslide or condos once the land situation is resolved,” said Belkin. “Freeport has said they would like us to educate them on how to make that happen. It would more than likely go back to the federal government with a caveat that it can’t be used for mining.”

Belkin also added that the local and state governments, along with groups such as the Trust for Public Land, might assist Freeport with the land transfers and the improvements to the WTP.

“But to be clear, the community cannot pay to operate the plant,” Belkin said. “That would be unconstitutional.”

Belkin emphasized there are still a lot of unknowns on the table that have to be worked out.

“I was with Suzie at that meeting in this room 40 years ago,” said Denis Hall to the council. “I understand the need for transparency and holding this meeting. But sign the damn thing and let’s get out of here.”

Given his long tenure with town government, mayor Glenn Michel asked Schmidt to read the motion that would have the town enter into the MOU. He did so and the motion was approved 6-0 (councilman Paul Merck was out of town) and the people in the room applauded. The meeting lasted less than an hour.

Signing of the MOU also appeared on the March 1 agenda for the Gunnison Board of County Commissioners. The motion to do so carried unanimously, and garnered much praise from the board.

Commissioner Phil Chamberland, who represents the upper East River Valley, expressed his gratitude to Freeport-McMoRan for its cooperation in mapping out the agreement.

“I’d like to publicly thank Freeport for coming to the table like they did and being willing to sit down and try to find a solution with us,” Chamberland said. “I think this is wonderful, quite frankly.”

Chairperson Paula Swenson commended county attorney David Baumgarten for leading negotiations with Freeport.

“I want everybody in this community to understand that David has been the tip of the spear in moving these negotiations forward and keeping everybody at the table, and getting people to understand how important this is from all aspects,” Swenson said. “Thank you, David, for coming to us last August with this ‘aha’ moment and moving this forward with the communities and the state and the mining company.”