Friedland, EPA settle Summitville suit

Denver — Mining financier Robert Friedland has reached a settlement with the U.S. and Colorado governments to end four and a half years of legal wrangling over an environmental cleanup of the Summitville mine.

Friedland agreed to make payments totaling US$27.75 million over 10 years. The funds will help cover the US$150-million cleanup costs for the failed heap-leach operation, situated in the mountains of southwestern Colorado.

Friedland admitted no responsibility for the disaster.

The first payments, totaling US$5.25 million, will begin in 2001.

As part of the deal, the two governments ended their attempt to stick Friedland with the entire bill for the cleanup, admitting that “no one person or entity is solely responsible for the environmental problems or subsequent cleanup.”

The U.S. will pay Friedland US$1.25 million in costs and legal fees that arose from a 1996 attempt to seize US$152 million in Canadian assets to cover costs of the cleanup. An original asset freeze, granted ex parte by one court, was dismissed in a second hearing. In turn, Friedland will drop his suit against the U.S. government for damages arising out of the Canadian court action.

However, Friedland will continue with third-party lawsuits against nine companies associated with the construction and later cleanup at the site, including Bechtel and Industrial Contractors (a unit of Morrison Knudsen, now the Washington Group).

The settlement still requires federal court approval before it can take effect.

The Summitville mine, operated by Vancouver-based Galactic Resources, began operations in 1986. It spent millions attempting to meet unattainable water quality standards, particularly for silver. The mine closed in late 1992, and subsequently Galactic filed for bankruptcy, forcing the U.S. Environmental Protection Agency to step in and begin the lengthy and expensive remediation process.

Friedland, who resigned from executive positions at Galactic more than two years prior to the company’s forced bankruptcy, now resides in Singapore and is chairman of Ivanhoe Capital.