Homestake settles Whitewood wrangle — Controversy over former superfund site dates back 16 years

A legal dispute that pitted the U.S. and South Dakota governments and a native band against Homestake Mining over the discharge of tailings into a local stream has been settled with a US$6-million payout by the company.

The settlement, agreed to by all parties, arose from several 1997 lawsuits in which Homestake was blamed for the accumulation of 100 million tonnes of tailings in Whitewood Creek from more than 120 years of gold mining at its namesake mine. The company said the accumulation of tailings was also the result of decades of placer mining by other companies, and that it had been working with the Environmental Protection Agency (EPA) since the 1970s to clean up the site.

The settlement has numerous components, including: $1 million per year over four years, payable to the three plaintiffs; the US$300,000 purchase by the company of 3,300 acres from the U.S. Bureau of Land Management and payment of $500,000 to the U.S. government for costs related to damage assessment; and US$500,000 and 400 acres of land owned by the company, provided as compensation to the Cheyenne River Sioux band.

The company also agreed to divert a small creek for three months of the year until the Homestake mine closes.

The controversy surrounding Whitewood Creek began in 1983, when an 18-mile stretch was designated a “superfund” site by the EPA, which alleged that millions of tonnes of tailings discharges by Homestake over decades had contaminated water and soil.

Gold mining in the nearby Black Hills district dates back to the 19th century. The creek was designated by the state and federal governments as a “disposal stream” for mine tailings and raw sewage from nearby towns. A 1977 amendment halted the practice, and Homestake began impounding tailings from the mine.

In 1990, after years of environmental studies at the creek, the EPA and Homestake agreed that the company would remediate the site at its own expense. After deleting it as a superfund site in 1996, the EPA, a branch of the federal government, stated that the site “poses no significant threat to public health or the environment.”

In September 1997, the federal and South Dakota governments, together with the Cheyenne River Sioux band, launched a lawsuit to recover costs related to “natural resource damage” and assessment costs.

Homestake launched a countersuit seeking to recover past and future costs related to the remediation at the site.