Settlement reached in Blue Hill mine cleanup

BLUE HILL – Three companies who had an interest in the operation of the former Kerramerican mine have reached a settlement on who will pay the $11 million bill for the ongoing cleanup at the mine site.

The three companies, California-based Kerramerican Inc., and Black Hawk Mining Ltd., and Denison Energy Inc., both Canadian companies, reached an out-of-court settlement last week. The details of the settlement have not been made public.

Representatives from the three companies could not be reached for comment.

This settlement stems from a federal suit filed by the state of Maine and the Department of Environmental Protection in 2004 asking the U.S. District Court to identify the three companies as “responsible parties,” for the cleanup at the mine site.

Last summer, the state and Kerramerican entered into a consent agreement by which the company agreed to pay the cost of the cleanup and other associated costs. In the consent agreement, the company retained the right to seek reimbursement from the other two companies, according to court documents.

According to court documents, Kerramerican agreed to pay into certain accounts $8,980,000 for the costs of remediation at the mine site; $1,820,000 for the costs of long-term operations and maintenance; $108,586.42 for the state’s past response and oversight costs, and a figure capped at $250,000 for the state’s future response and oversight costs.

“Basically, Kerramerican came to the table and said ‘we’re here and we’re willing to deal with you.’ So we dealt with Kerramerican,” Hank Aho, acting director of the DEP’s remediation division, said Tuesday. “They continued their action against the other two potentially responsible parties.”

The matter had been scheduled for trial this summer.

The cleanup work stems from the mining operations conducted on the site off Route 15 during the 1960s and ’70s. During that time, the operations extracted copper and zinc from deposits at the site.

According to the state’s original suit, Black Hawk and Denison began to develop the mine site in the mid-1960s, which included driving a mine shaft and developing almost 10,000 feet of tunnels. Those activities ended in 1967.

At that time, Denison owned 44 percent of Black Hawk and the two companies had some common officers, according to previous reports which also indicated that some Denison employees worked at the Blue Hill mine site.

In 1970, Black Hawk and Keradamex Inc., a predecessor of Kerramerican, formed a joint venture to continue to develop the mine site, including extraction, crushing and processing of minerals. That operation ended in 1977. In 1985, DEP approved the mine’s closure which included covering part of the mine site.

Since that time, however, erosion has occurred at the site, exposing waste materials from the mining operations. Initial studies in the 1990s indicated that metals including arsenic, cadmium copper, lead, silver and zinc, have leached into the groundwater and surface water around the mine site.

With the U.S. Environmental Protection Agency considering the site for inclusion on its Superfund list, Kerramerican agreed to the DEP’s suggestion to work together on the site cleanup. Since 1999, the company, working with DEP, has conducted studies at the site and developed a feasibility plan for the site, including the cleanup plan.

Cleanup work on the site began last summer. Kerramerican contracted with the Portland firm Emsource to reclose the mine site and maintain it in the future. Officials from Emsource told local residents recently that work had gone well last year and that they expected contractors to begin work on the final phase of the project by mid-July. That work will include capping the 14-acre plant site with an engineered cap that will prevent water from reaching the waste materials.

The project is expected to be completed by this fall.