Nevada flexes regulatory muscle with hefty fine

Echo Bay Mines (TSE) was recently forced to pay one of the stiffest fines ever levied against a mining company in the State of Nevada. After more than 1,000 birds were killed while drinking from the tailings pond at the McCoy/Cove gold mine near Battle Mountain, Nev., operator Echo Bay was recently fined US$250,000 by a U.S. district court.

Echo Bay agreed to pay the fine after pleading guilty to violating the U.S. Migratory Bird Treaty Act which makes it illegal for any company or mine to kill migrating water fowl such as ducks, geese and sand pipers.

The fine was levied even though Echo Bay has made a concerted effort to prevent birds from being killed in the tailings pond of its second largest gold mine. After other methods had failed, the Colorado company recently spent US$3 million to install a cyanide destruction process within McCoy/Cove’s 7,500-ton-per-day mill. Should the SO/c2h/ process, designed by Inco prove successful, Echo Bay will have spent more than US$7 million to rid itself of the bird death problem.

Before installing the sulphur dioxide-based treatment facility, it tried a number of different methods that have been successful at other operations. They included, stringing silver mylar flags across the tailings pond, using remote control boats, and firing cannons at regular intervals to scare the water fowl. Mine staff even resorted to chasing the birds across the pond in air- propelled swamp buggies.

Meanwhile, the cost of shutting down the McCoy/Cove mill to install the cyanide reducer drove third-quarter cash production costs up to US$291 per oz. from US$197 a year ago. But Echo Bay expects those costs to drop in the fourth quarter.

“It has come as no surprise that things have tightened up in Nevada,” said Michael Steeves, director of investor relations at Pegasus Gold (TSE). “For a long time, Nevada didn’t have any formal regulations (to guide mining companies in dealing with the environment). But as gold mining has become more important within Nevada, it has been catching up with other states,” said Steeves who expects the rules to become stricter within the next five to 10 years.

Under Nevada state laws, companies are required to report any bird or animal fatalities to regional wildlife offices within 24 hours of occurring. The companies must also file a quarterly report containing records of animals killed within that period. “We know the technology is there to prevent wildlife losses and we want the companies to use it,” said John King, a biologist who works at the Nevada Department of Wildlife in Reno.

King said Echo Bay is not the only company to have experienced bird death problems. “All of the mines using cyanide have had fatalities in one form or another,” he said. But Echo Bay may have invested more time and money to find a solution to its troubles.

“When birds fly in from the desert region, there is little you can do to stop them from having a drink,” said Robert Armstrong, Echo Bay’s vice-president of mining and technical services. He thought the problem had been overcome when the company began treating mine effluent with the chemical ferrous sulphate. “From November, 1989, until February, we didn’t lose a single bird,” said Armstrong.

But early this year, when the company began mixing ore from the McCoy open pit with material from the nearby Cove deposit, mine staff began finding dead birds on the shore of the tailings pond.

“Cyanide chemistry is very complex and we weren’t certain as to why the birds were dying,” said Armstrong. A study of the pond chemistry by the University of Nevada found that copper in the ore which complexed with the cyanide was responsible.

As ferrous sulphate doesn’t destroy copper cyanide complex, Echo Bay elected to install the sulphur dioxide-based treatment facility within its new mill. Developed and patented by Inco in 1982, the SO/c2h/ facility has already been installed at 32 mines in Canada, where pond discharges, rather than bird deaths, tend to be the biggest problems.

Also in use at four U.S. mines including Echo Bay’s Kettle River mine in Washington State, the SO/c2h/ system works by oxidizing the residual cyanide in solution that remains after gold and silver have been removed in the mill circuit.

The combination of the oxygen and sulphur dioxide controls the pH balance of the solution, and oxidizes the cyanide into cyanate, a chemical that is much less toxic than cyanide. “Using this method, companies can achieve less than one part per million of total cyanide (a level that is safe for animal consumption),” said Dr. Eric Devuyst, manager of technical sales and services, at Inco’s Mississauga, Ont., laboratories.

King says his agency is “extremely pleased” with the response of Echo Bay and other companies to the environment guidelines. He says it is still too early to determine whether the SO/c2h/ process will prevent water fowl from being poisoned by cyanide. But he expects the results of an animal fatality study to show that deaths attributable to cyanide are down by 80-90% and the problem has almost been laid to rest.