Aztec Minerals Corp. v. Romer

940 P.2d 1025, 1996 Colo. App. LEXIS 300, 1996 WL 609810
CourtColorado Court of Appeals
DecidedOctober 24, 1996
Docket95CA1108
StatusPublished
Cited by14 cases

This text of 940 P.2d 1025 (Aztec Minerals Corp. v. Romer) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aztec Minerals Corp. v. Romer, 940 P.2d 1025, 1996 Colo. App. LEXIS 300, 1996 WL 609810 (Colo. Ct. App. 1996).

Opinion

Opinion by

Justice ERICKSON. *

Plaintiffs, Aztec Minerals Corporation, Gray Eagle Mining Corporation, and South Mountain Minerals Corporation, appeal from a judgment of the district court dismissing their complaint with prejudice. Defendants are the State of Colorado; Roy Romer, Governor; the Colorado Department of Public Health and Environment (CDPHE); Patricia Nolan, Executive Director; the Colorado Department of Natural Resources (DNR); and James L. Lochhead, Executive Director (collectively the State). We affirm.

I.

The Background and Operation of the Summitville Mine

Plaintiffs are the principal owners of the surface and mineral estates to property that *1027 encompassed what is commonly known as the Summitville Mine. The Summitville Mine is located in the Summitville Mining District (District) at the headwaters of the Rio Grande on the .northeast flank of South Mountain within the San Juan Mountain Range. The mine site, which is heavily min-eralized, covers approximately 1,400 acres ranging in altitude from 11,400 to 12,500 feet. It is located within two miles of the Continental Divide and is subject to severe weather, including heavy winter snows.

Gold was discovered in the District in 1870 and was initially mined using placer techniques. Underground gold mining commenced following lode discoveries in 1872. Significant lode and placer activity took place from 1875 to 1887. Mining activity subsequently declined with the depletion of high-grade ores. The District, however, experienced some periods of renewed activity in the decades preceding the development of the Summitville Mine.

In 1976, the General Assembly enacted the Colorado Mined Land Reclamation Act to provide a procedure for allowing the extraction of minerals and the reclamation of mine sites for a beneficial use, while protecting the environment. Section 34-32-101, et seq., C.R.S. (1995 Repl.Vol. 14). Reclamation standards established in the Act include prevention of acid mine drainage, maintenance of the hydrologic balance in the watershed, maintenance of water quality and quantity, soil stabilization on the mine site to prevent landslides or erosion, and, where practical, revegetation with self-sustaining plant species. Section 34-32-116(7), C.R.S. (1995 Repl.Vol. 14).

In 1984, plaintiffs leased the property on which the Summitville Mine is located to Galactic Resources, Inc., (GRI) and its subsidiary, Summitville Consolidated Mining Company, Inc. (SCMCI). Shortly thereafter, SCMCI/GRI submitted an application to the Mined Land Reclamation Division (MLRD) (now known as the Division of Mines and Geology (DMG)), which was approved by the Colorado Mined Land Reclamation Board (MLRB) for a limited impact, open-pit, gold mining operation. The operation was designed to test the feasibility of extracting gold utilizing a cyanide heap leaching process. Plaintiffs were required to provide a performance bond to obtain approval of their application for a permit.

As the pilot project proceeded, SCMCI/ GRI submitted an application in August 1984 for a large scale cyanide heap leaching operation at the Summitville site. The MLRB approved SCMCI’s/GRI’s application in October 1984 and construction of the mine, including the heap leach pad and liner, commenced in August 1985 and continued through the winter.

The heap leach pad liner was composed of an impermeable plastic membrane underlaid by a sand layer. The sand layer incorporated a leak detection system and was underlaid in part by a geotextile membrane which rested on top of a clay liner. A “french drain” system, consisting of crushed rock, collected groundwater that flowed under the liner. The purpose of the liner in addition to permitting the collection of the gold bearing cyanide solution for processing was to prevent the solution from entering into the surrounding environment.

Difficulties SCMCI/GRI encountered during the winter construction resulted in the finer being ripped and torn. While SCMCI/ GRI made repairs to the liner prior to loading the heap leach pad with ore, leaks were detected between the upper and lower liners within a week after SCMCI/GRI began heap leaching operations in June 1986. Shortly thereafter, it was discovered that the lower finer was also leaking and that the cyanide solution was entering the french drain system.

As a result of the cyanide leaks, SCMCI/ GRI proposed to the MLRB that it be allowed to pump water from the leak detection system and the french drain back onto the heap leach pad. This additional water, however, exacerbated a problem, which later became apparent, concerning the amount of water that could be contained by the heap leach pad without processing. The mine was originally conceived as a “zero discharge” facility.

Commencing in June 1987, the Summitville mine experienced a number of system fail *1028 ures which resulted in cyanide contaminated water being discharged into a nearby creek and into settling ponds on the site. To handle the increased volume of water in the heap leach pad, SCMCI/GRI entered into negotiations in 1988 with the Water Quality Control Division (WQCD) to obtain a point source discharge permit. A permit was subsequently approved by the WQCD in May 1989.

In 1989, SCMCI/GRI also obtained approval from the DMG and the MLRB to construct a process water treatment plant. The plant, however, could not sufficiently treat the water to the standards required by the WQCD.

SCMCI/GRI then sought and obtained permission from the MLRB to allow for land application of the water. The land application system called for SCMCI/GRI to spray contaminated liquid on surrounding lands where it would evaporate and percolate at a controlled rate into the ground. However, because of problems associated with this process, contaminated water flowed into the Wightman Fork and Cropsy Creek, tributaries of the Alamosa River.

In 1991, SCMCI/GRI, the MLRB, and the WQCD entered into a settlement agreement to address SCMCI/GRI’s continuing problems at the site. The settlement agreement, which was amended in 1992, provided that SCMCI/GRI would submit a comprehensive plan to remedy its violations.

On December 4, 1992, approximately two weeks after SCMCI/GRI submitted its cleanup plan in which it estimated the cost of cleanup at $20 million, SCMCI/GRI declared bankruptcy and gave notice that it would no longer fund its operations at the site after December 15. Immediately thereafter, the Colorado Department of Health sought the assistance of the Environmental Protection Agency (EPA) to undertake an emergency response action at the site if one became necessary.

On December 15, 1992, the day SCMCI/ GRI abandoned the site, the State obtained a temporary restraining order (TRO) against SCMCI/GRI to require continued operation of the water treatment facilities. Less than two weeks later, on December 28, the State obtained a preliminary injunction against SCMCI/GRI extending the TRO.

On December 16, 1992, the EPA entered the site pursuant to its authority under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), § 42 U.S.C. 9601

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Bluebook (online)
940 P.2d 1025, 1996 Colo. App. LEXIS 300, 1996 WL 609810, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aztec-minerals-corp-v-romer-coloctapp-1996.