DEQ Proceeds with Bond Forfeiture at Montana Tunnels Mine
HELENA— The Department of Environmental Quality (DEQ) will initiate the bond forfeiture process for the Montana Tunnels Mine near Jefferson City, Mont., after the operator failed to make a $1.5 million payment in December per a court approved bankruptcy stipulation. Montana Tunnels Mine filed for bankruptcy last year.
“DEQ has worked diligently with the current operator to come to a resolution,” said DEQ Mining Bureau Chief Dan Walsh. “While this wasn’t the outcome we were hoping for via the bankruptcy proceedings, we will take the necessary steps to forfeit the bond and allow other operators to consider the mining permit or we’ll ensure that the site is reclaimed.”
According to the bankruptcy stipulation, the operator is required to make payments toward the reclamation bond on scheduled dates. The initial $1.5 million installment due Nov. 30 was paid and accepted by DEQ. A subsequent $1.5 million payment was due Dec. 31, 2023, and complete payment toward the full reclamation bond was due by March 31, 2024. The operator previously paid $1.5 million toward the delinquent bond in 2022 as part of an agreement with DEQ to bring the mine into compliance.
DEQ will now initiate the forfeiture process for the existing reclamation bonds as required by the Metal Mine Reclamation Act. The first step in that process is to issue a formal forfeiture letter, which was sent to the operator on Jan. 22. The letter is a progressive step in the process that may allow a potential successor operator to take over the permit as allowed by statute. A potential successor would be required to post the difference between the required $40.9 million bond and the bond currently held by DEQ. DEQ may use a small portion of the currently held bond to maintain the mine site during the interim period. If a successor operator is not identified or a situation arises where the property would not be viable for a successor operator, DEQ will begin the reclamation process.
"DEQ works with operators to ensure sites are properly bonded and meeting state and federal requirements. When requirements are not met, we must take action," said DEQ Director Chris Dorrington. "We have been working for a long time on this site, and this forfeiture letter is the first step toward resolution."
The once active gold, silver, zinc and lead mine has not operated since 2008. In 2018, the mine’s permit was suspended by operation of law over its failure to post adequate bond. DEQ issued violation letters to Montana Tunnels beginning in 2018 and started the corrective action process. An updated bond calculation in 2020 demonstrated that additional bond was necessary to reclaim the disturbance at the site. DEQ currently holds $23.7 million in bond and the total required bond for the current site disturbance is $40.9 million.
The Montana Tunnels Mining Inc. bankruptcy filing prevented DEQ from previously forfeiting the reclamation bond. Under the court approved bankruptcy stipulation, DEQ can proceed with the bond forfeiture if the operator failed to make the required payments. DEQ’s bond forfeiture and next steps do not affect property ownership of the mine itself.
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