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CEO of Hecla Mining meets with DEQ head about violation claim

| June 5, 2018 4:00 AM

By JOHN BLODGETT

The Western News

Hecla Mining Company’s CEO met May 30 with the Montana Department of Environmental Quality, hoping to convince the agency that neither he or Hecla are in violation of state mining law as the agency has claimed.

The DEQ doesn’t appear to have been swayed.

“While we are reviewing the information provided by (Hecla CEO) Mr. (Phillips) Baker, our initial reaction is continued belief that this provision of the Metal Mines Reclamation Act applies to him,” Kristi Ponozzo, DEQ’s public policy director, said Friday via email.

Luke Russell, Hecla’s vice president of external affairs, said Monday via email that the company is “asking DEQ to do the right thing by rescinding the letter of violation and not stand in the way of Hecla creating much needed jobs in Northwest Montana.”

In March, the DEQ notified Baker and Hecla that they are in violation of the “bad actor” provision of Montana’s Metal Mine Reclamation Act.

The provision “prohibits a person from conducting mining or exploration activities in Montana if that person was a principal or controlling member of a business entity for which DEQ received bond proceeds,” DEQ Director Tom Livers has said.

Baker previously was vice president and chief financial officer of Pegasus Gold Incorporated, whose Zortman-Landusky, Basin Creek and Beal Mountain mines polluted the environment. Pegasus eventually filed for bankruptcy, leaving the state responsible for tens of millions of dollars of ongoing cleanup costs.

At stake for Hecla are exploration licenses and operating permits for two mines — Montanore and Rock Creek — the company seeks to develop near Libby.

Hecla on March 23 filed a Complaint for Declaratory Judgment and Injunctive Relief against the DEQ and Livers, claiming that they had misinterpreted the statue. The complaint was filed in Montana 19th Judicial District Court in Libby, and has since been moved to First Judicial District Court in Helena.

According to a Hecla news release, Baker met with Livers “to provide important details about his employment history and Hecla’s background to demonstrate that neither he nor Hecla violated Montana law.”

“At the DEQ meeting last week Mr. Baker provided important details and facts surrounding his employment history with Pegasus Mining,” Russell wrote in his email. “He was not there when funds were received by the state and DEQ Director Livers confirmed that in his statement before the Environmental Quality Council last week. Thus, the basis of the state notice is not correct and should be rescinded.”

“When he was with Pegasus he fulfilled his obligations to secure the full amount of financial assurance for reclamation required by the State at that time,” Russel continued. “He was not involved in decisions made after he left that included the decision to cease mining operations at Zortman or any negotiation of the settlement agreement with the State.”

In her email, Ponozzo said that the DEQ was “exploring our next steps and determining if and what a judicial action may look like. We do not have a specific ETA, but we do want to move forward.”

“Hecla does not have any pending deadlines with DEQ,” she noted.

The DEQ’s decision to take action against Baker and Hecla followed a request a handful of conservation groups made last October for the DEQ to suspend state permits for the Montanore and Rock Creek mines.

Following DEQ’s action, the Lincoln County Commission and 56 Montana legislators penned letters to Gov. Steve Bullock, showing support for Hecla and asking that the state reconsider its action.