Case Summary: Third Party Settlement at Bunker Hill Site to Secure Wastewater Treatment and Remove a Barrier to New Mining Operations

On March 6, 2018, the U.S. Environmental Protection Agency (EPA) and Department of Justice (DOJ) entered into an administrative settlement agreement and order on consent with Bunker Hill Mining Corp. (BHMC), which is currently leasing and operating the Bunker Hill Mine in Idaho. Concurrent with this administrative settlement agreement, on March 12, 2018, EPA and DOJ lodged a consent decree with the current owner of the mine, Placer Mining Corporation (PMC). This settlement package presents an opportunity for the potential reuse of the mine that had been dormant for many years.

EPA regularly incurs costs in operating a wastewater treatment plant that treats the approximately 1,300 to 1,400 gallons-per-minute of acid mine drainage released from the mine on an ongoing daily basis. If not collected and treated at the wastewater treatment plant, acid mine drainage from the mine would flow through the mine yard, across properties where public and environmental exposures would occur, and into Bunker Creek and the South Fork of the Coeur d’Alene River where it would have significant detrimental effects on water quality and the ecosystem. Under this settlement package, BHMC will pay almost $1 million annually for water treatment costs incurred by EPA, starting on December 1, 2017.

Under the administrative settlement agreement, BHMC will also perform cleanup work at the mine that was previously being done pursuant to two unilateral administrative orders issued by EPA to the current owner, PMC. These are actions that BHMC is not otherwise responsible or liable for because BHMC had not caused or contributed to the existing contamination at the site.

BHMC will continue to pay EPA for the wastewater treatment costs for so long as BHMC leases, owns, or occupies the Mine and until BHMC finds alternative means to treat the wastewater discharged from the mine. In addition to carrying out the cleanup actions and paying wastewater treatment costs, BHMC will pay EPA up to $20 million in satisfaction of EPA’s past costs claim against PMC. This amount is being paid by BHMC, on behalf of PMC, as a portion of the lease/purchase price between the two companies. Currently, EPA has approximately $24 million in outstanding, recoverable past costs at the site.

"Through this settlement, EPA is clearing the way for a new operator to resume mining, bringing jobs back to the community, while also securing the ongoing cleanup of contaminated water and recovery of EPA's past cleanup costs. "EPA is delivering on its Superfund Task Force commitments."

On this page:

• Information about Bunker Hill Mining Corp.
• Information about the Bunker Hill Mining and Metallurgical Superfund Site
• Summary of the Administrative Settlement Agreement and Order on Consent and Consent Decree
• Contact Information

Information about Bunker Hill Mining Corp.

BHMC, formerly Liberty Silver Corp., is a publicly held mining corporation headquartered in Ontario, Canada. On August 17, 2017, BHMC and the current owner of the Bunker Hill Mine, PMC, entered into a two-year Mining Lease with Option to Purchase. The lease became effective on December 1, 2017. The lease provides that BHMC will operate the Bunker Hill Mine and make certain improvements on the Mine along with making payments to PMC over the term of the lease. Pursuant to the lease, BHMC has the exclusive right to purchase the Bunker Hill Mine during the lease term upon notice to PMC and the United States. Through this lease, BHMC is seeking to redevelop one of the largest zinc-lead-silver deposits in the Americas not in production, located in the Silver Valley of Idaho.

Information About the Bunker Hill Mining and Metallurgical Superfund Site

The Bunker Hill Mining and Metallurgical Superfund Site, is located in northern Idaho, in one of the largest historical mining districts in the world. The site is one of the nation’s largest and most complex Superfund sites. Mining operations began in the area in 1883 and continue today. The region was mined for silver, lead, and zinc. Cleanup at the site, which spans approximately 1,500 square miles, has been ongoing since the 1980s.

The settlement agreement with BHMC involves the Bunker Hill Zinc, Lead and Silver Mine, which is located within Operable Unit (OU) 02, the non-populated area of the site. Cleanup remedies selected for OU2 include a centralized wastewater treatment facility or central treatment plant (CTP), offsite disposal, drainage/erosion control, leachate control, and monitoring.

In November 1994, federal and state governments assumed operation of the CTP for ongoing treatment of acid mine drainage. Currently, EPA owns the CTP. Acid mine drainage is generated and discharged from the mine continuously, and is treated through the CTP. Contaminants of concern are primarily heavy metals, including: arsenic, cadmium, copper, lead, mercury, and zinc.

Additional information about the site can be found at the Site’s profile page at https://cumulis.epa.gov/supercpad/cursites/csitinfo.cfm?id=1000195.

Summary of the Administrative Settlement Agreement and Order on Consent and Consent Decree

This consent decree and administrative settlement agreement embody a settlement package involving PMC, BHMC, and the United States at the Bunker Hill Mining and Metallurgical Superfund Site. The consent decree and administrative settlement agreement work in tandem. The consent decree specifically incorporates the administrative settlement agreement, which will be appended to the consent decree, and which resolves PMC’s past costs liability through BHMC, the lessee and potential purchaser of the Mine. In the event that BHMC does not purchase the Mine, PMC remains liable for all unpaid past and future EPA response costs.

In exchange for a covenant not to sue from the United States under the consent decree, PMC will:

1. Resolve its past response costs liability in the amount of $20 million, paid in annual installments by BHMC on behalf of PMC as a result of BHMC’s lease of the Bunker Hill Mine from PMC; and
2. Dismiss its takings claim against the United States. The consent decree includes the agreement by DOJ and PMC to file a Joint Stipulation of Dismissal with the Court of Federal Claims within 28 days of the Effective Date of the consent decree.

The covenant not to sue is contingent upon full payment of the $20 million, dismissal with prejudice of the takings case, and completion of all other requirements of the consent decree.

In exchange for a covenant not to sue from the United States under the administrative settlement agreement, BHMC will:

1. perform cleanup work at the mine that was previously being done pursuant to two unilateral administrative orders issued by EPA to PMC; and
2. pay almost $1 million annually for water treatment costs incurred by EPA, starting on the effective date of BHMC’s lease, December 1, 2017.

Additionally, BHMC will pay up to $20 million – of approximately $24 million in outstanding, recoverable past costs against PMC – that EPA would not otherwise recover from PMC because of its inability to pay absent a lease or sale of the mine. The water treatment costs and $20 million will be deposited into the Site’s special account.

The administrative settlement agreement is subject to a 14-day public comment period. The consent decree was lodged on March 12, 2018, and is subject to a 30-day public comment period.

Contact Information

For more information, contact

Kristin Leefers, Assistant Regional Counsel
Office of Regional Counsel
U.S. Environmental Protection Agency
Region 10
1200 6th Ave., Suite 900, M/S: ORC-113
Seattle, WA 98101
(206) 553-1532
[email protected]

Anthony Austin, Attorney-Advisor
Office of Site Remediation Enforcement
U.S. Environmental Protection Agency
1200 Pennsylvania Ave., NW
Washington, DC 20460
(202) 564-6943
[email protected]