Copper, Silver, and Frustration

LIBBY — In a warehouse on the edge of Libby, Theodore Montgomery can supply you with just about anything you would ever need to mine copper and silver.

Need a hard-rock drill bit? Sure thing. What size do you want?

How about hard hats? How many do you need?

What about boots, miner’s gloves and safety vests? Yes, yes and yes.

“We’ve got everything from toilet paper to jumbo drills,” said Montgomery, who runs F&H Mine Supply’s Libby warehouse. “If a mine needs it, we can deliver it.”

A few years ago, when the Troy Mine was still producing millions of pounds of copper and silver annually, it wasn’t uncommon for Montgomery to make two or three deliveries a day out to the mine. But that all came to an end in 2015, when the mine was shuttered due to a drop in demand for copper.

Despite the loss of its biggest local customer, there was reason for F&H Mine Supply to keep a warehouse in Lincoln County. Two months after the shutdown, Coeur d’Alene-based Hecla Mining Company announced it was purchasing Revett Mining Company, including the shuttered Troy Mine and the proposed Rock Creek Mine near Noxon. The following year, Hecla expanded its Montana operations again with the acquisition of Mines Management, which had proposed the Montanore Mine project just south of Libby.

Hecla — which has more than a century of experience in operating mines in Alaska, Idaho and Quebec and considerably deeper pockets than the previous owners — promised to fully develop both mines in Lincoln and Sanders counties, two areas stricken with some of the highest unemployment rates in the state.

“There was a lot of optimism locally that Hecla was a company with the resources and skills to push both of these proposed mines to the finish line,” said Libby City Administrator Jim Hammons.

But two years later, that optimism is starting to fade after the state of Montana designated Hecla President and CEO Phillips S. Baker a “bad actor,” a move that some locals worry could kill both proposed mines.

“I have no problem with strong mining regulations,” said Libby native and Lincoln County Commissioner Mark Peck, “but this ‘bad actor’ designation against Baker goes too far.”

After the Troy Mine closed, Montgomery and his colleague Jason Lucas started to reduce their inventory by moving supplies to other F&H warehouses across the region. They also updated their website in an effort to increase online sales. Montgomery and Lucas figured online sales would help the Libby warehouse stay afloat until the Montanore and Rock Creek mines finally opened.

The search for copper and silver underneath the Cabinet Mountain Wilderness began in the early 1980s, when U.S. Borax acquired old mine claims there. A few years later, Canadian-based Noranda Minerals Corp. purchased the Montanore Mine claims and started constructing a 14,000-foot exploratory mine shaft — also known as an adit — 16 miles south of Libby, just outside of the wilderness boundaries. At about the same time, Asarco — which had opened the Troy Mine in 1981 — began work on the proposed Rock Creek Mine project near Noxon in Sanders County (about 40 miles south of Troy).

Both projects were put on hold in the early 1990s after a drop in demand for copper, which also shut down the Troy Mine from 1993 to 2005. But that pause turned out to be short-lived. In 1999, the Sterling Mining Company, which later became Revett, purchased the Troy Mine and the Rock Creek project and restarted the permitting process. In 2005, Spokane-based Mines Management acquired the Montanore project and started the same permitting process south of Libby.

Taken together, both Montanore and Rock Creek have the potential to produce more than 500 million ounces of silver and 4 billion pounds of copper in their lifetime. The two deposits are separated by about 7,000 feet of earth and a fault line, suggesting that at one time it was actually one ore body. Many consider the combined deposit beneath the Cabinet Mountains to be one of the largest untapped copper and silver resources on Earth. If opened, each mine would likely employ hundreds of people, a potential boon to the local economy. In May, Lincoln County’s unemployment rate was at 6.6 percent, far above the state average.

For generations, Lincoln County’s economy was propped up by logging and mining, but the 1990s and 2000s brought hard times. In 1990, the W.R. Grace & Co. vermiculite mine closed north of Libby. In 1993, Asarco Mining closed the Troy Mine. That same year, Champion International sold its Libby operations to Stimson Lumber Company, which closed all but one of the mills. The downsizing left more than 800 workers unemployed. The one remaining lumber mill limped on for another decade, before closing in 2003.

At about the same time, it was discovered that asbestos contained in the vermiculite mined by W.R. Grace had sickened thousands of people in the community. Libby and the surrounding area was designated a Superfund site by the U.S. Environmental Protection Agency, kicking off one of the largest environmental cleanups in American history, but also creating a stigma that has stuck with the town ever since.

Darren Coldwell has owned a sporting good store, been mayor of Troy and is currently the Lincoln County administrator. He’s had a front row seat to the community’s decline over the past few decades. He said that the 1993 closing of the Troy Mine took the “life” out of the little town just a few miles east of the Idaho border, and in some ways it’s never fully recovered.

“There are just no working-class jobs here anymore,” Coldwell said. “If you’re an 18-year-old who does not want to go to college or join the military, there is really nothing to do for work here.”

With the arrival of Hecla in 2015, some locals believed that Lincoln County’s luck was finally starting to turn. Since then, the company has continued to work to get approval from a number of state and federal agencies to begin extensive exploration work to get a firm idea of just how much copper and silver is beneath the Cabinet Mountains and set the stage for the eventual opening of both mines. Most recently, in November 2017, the U.S. Forest Service announced it would likely give Hecla approval to begin exploration at Rock Creek sometime this year in a final record of decision on the project.

But Rock Creek and Montanore are not without their opponents. A number of environmental groups — including Clark Fork Coalition, Earthworks, Montana Environmental Information Center, Rock Creek Alliance and Save Our Cabinets — have all come out against the project over concerns that the mines would drain and pollute mountain streams and harm the local grizzly bear population.

The environmental groups were also among the first to raise concerns about Hecla President and CEO Phillips S. Baker, who prior to working for the Idaho company was a vice president at Pegasus Gold. Pegasus went bankrupt in 1998, leaving the state of Montana with a $32 million cleanup bill at a gold mine in the Little Rocky Mountains of north-central Montana. The state also spends about $2 million annually for water-treatment systems at the site. In March, the Montana Department of Environmental Quality announced that Baker had been designated a “bad actor” and would not be able to engage in mining until he reimbursed the state for the gold mine cleanup. Environmental groups praised the decision.

“Montanans have spent decades and millions of dollars cleaning up rivers and streams contaminated by irresponsible mining, and the work is far from over,” said Karen Knudsen, executive director of the Clark Fork Coalition. “The ‘bad actor’ law simply requires full responsibility from mining executives for their previous messes. In the case of Pegasus, it’s long past time these polluters are held accountable.”

The bad actor law, passed in 1989, is meant to hold those who fail to clean up polluted mine sites responsible. Since then, it has only been used once, according to Kristi Ponozzo, public policy director of DEQ. Ponozzo is quick to note that only Baker has been designated a bad actor and that no action has been taken against Hecla. However, as long as Baker is at the helm of the company, it cannot pursue mining projects in the state.

Luke Russell, vice president of external affairs for Hecla, said the state’s interpretation of the bad actor law is “wrong” and that Baker is innocent of any wrongdoing. Baker has said in previous interviews that he was not a principal at Pegasus and that “decisions affecting the reclamation, including the bankruptcy settlement and the decision to cease mining operations at Zortman (gold mine)” were made after his departure from the company in early 1998. Hecla has sued the state in an effort to remove the bad actor label from its CEO.

The ongoing lawsuit between Hecla and Montana adds a layer of “uncertainty” for the future of the Montanore and Rock Creek projects, Russell said, although he is optimistic that the company will eventually prevail.

But locals in Lincoln County are less optimistic, viewing the recent turn of events as yet another example of the area’s long history of bad luck. Montgomery said he was not surprised that state officials in Helena decided to designate Baker a bad actor, in part, because as he see’s it, the state has never supported Montanore or Rock Creek.

“I have no idea why the state is against these mining projects,” he said. “It seems to me they would have so much to gain if the mines opened. There would be more jobs and more taxes.”

Montgomery said he’s worried that eventually F&H Mine Supply will decide it’s not worth waiting for the mines to open and close the Libby warehouse.

Just down U.S. Highway 2, LeRoy Thom, owner of Montana Machine and Fabrication, is also frustrated with the bad-actor designation. Before the Troy Mine shutdown, repairing pieces of mine equipment made up a sizeable chunk of Thom’s business.

“It’s like every time they get over one set of hurdles with these mines, they face another set of hurdles,” he said. “It’s never ending.”

Thom, who before opening his machine shop worked at the W.R. Grace vermiculite mine, said it’s particularly frustrating because the world needs copper and silver for everything from smartphones to buildings. He said if it’s not mined in the United States, it will be mined in other countries.

“Unless the state of Montana gets behind these projects, I don’t think they’ll ever open,” he said.

Coldwell, the county administrator, said in recent months local officials have gotten more vocal about supporting Hecla by writing letters to state officials and even traveling to Washington, D.C. to make their pitch directly to federal agencies about the importance of the projects.

“I think everyone is starting to see that if we want to save our community, we need to band together and be vocal about it,” he said. “I think we’ve seen how low we can go, and now it’s time to start digging ourselves out of this pit.”

Coldwell said he understands the dangers of having an economy so dependent on one industry and that mining is an especially cyclical business. However, as he sees it, having two mines supporting hundreds of jobs in the community would help “rebuild” the local economy and hopefully attract other businesses.

“Success breeds success,” he said.

Not only would opening the two mines help rebuild the area economy, locals say, but it would also help Lincoln County rebuild its reputation into one that’s not centered around the stigma of being home to one of the largest Superfund fund sites in the country. Peck, the county commissioner, said he supports strong mining regulations to protect workers and the environment. However, he believes Hecla can mine copper and silver responsibly.

“If any community should be hyper-sensitive to what bad mining practices can do, it’s this community,” he said. “We’ve been living with the consequences (of W.R. Grace) for more than 20 years, but does that mean we should never mine in this community again?”

Thom has a sign that proclaims “I Support Hecla” outside of his machine shop just south of Libby. It’s one of many signs you’ll spot around Libby and Lincoln County supporting the development of the Rock Creek and Montanore mines.

“The idea is to learn from the mistakes of the past and make sure it’s done right in the future,” Thom said. “Hecla has a good track record and I don’t think they’re going to cut corners … I think they can do it the right way.”

FAST FACTS

Who Is Hecla? Hecla was founded in 1891 and currently operates mines in Idaho, Alaska, Mexico and Quebec, Canada.

How Much Is Under There? The two mines could produce more than 500 million ounces of silver and 4 billion pounds of copper in their lifetime. The two deposits are separated by about 7,000 feet of earth and a fault line, suggesting that at one time it was actually one ore body. Between 1981 and 2015, the Troy Mine produced 84 million ounces of silver and 430 million pounds of copper.

What Happened to the Troy Mine? After buying the mine, Hecla began an extensive remediation project, by removing processing chemicals and starting to cover the 303-acre tailings impoundment area with topsoil. This year, the company is currently dismantling the processor and mill. The entire remediation is expected to take three years.

Mining in Lincoln County

1919: Vermiculite mining begins in Lincoln County

1963: W.R. Grace & Co. takes over vermiculite mine

1981: Asarco opens Troy Mine; U.S. Borax begins exploration at Montanore project

1987: Asarco begins exploration at Rock Creek

1989: Noranda, which purchased U.S. Borax claims, builds expository mine shaft at Montanore

1990: W.R. Grace & Co. closes its vermiculite mine

1991: Noranda stops working on Montanore due to weak mineral prices

1993: Asarco Mining closes the Troy Mine

1999: Sterling Mining Company, which is later renamed Revett Minerals, purchases Troy Mine and Rock Creek claims from Asarco

2002: Montanore project formally abandoned

2005: Mines Management acquires Montanore claims, applies for permits; Revett Minerals reopens Troy Mine

December 2012: Troy Mine closes after series of underground rock falls

September 2014: Revett builds new subterranean tunnels and begins production at Troy Mine again

January 2015: Revett shuts down Troy Mine as copper and silver prices drop

March 27, 2015: Hecla Mining Company announces it’s purchasing Revett, permanently closes Troy Mine

May 24, 2016: Hecla Mining Company announces it’s purchasing Mines Management, vows to develop Montanore and Rock Creek projects

March 2018: Montana designates Hecla CEO Phillips S. Baker a “bad actor”