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Montana Drops ‘Bad Actor’ Case Against Hecla Mining Company

Montana environmental regulators are dropping their case to disqualify Hecla Mining from getting future mining permits in the state. The company’s CEO was previously an executive with Pegasus Gold, which abandoned mines in Montana.

Critics say there could be consequences for not seeking penalties under Montana’s “bad actors” law.

Montana Department of Environmental Quality Director Chris Dorrington says the state dropped its case against Hecla Mining Company after three years in court because the cost of litigating the case wasn’t worth the likely outcome.

“One of our original goals was also to seek reimbursement costs, which now seems an unlikely outcome of the case,” Dorrington says.

In 2018, the Montana Department of Environmental Quality sought to prevent Hecla Mining from getting future mining permits, citing CEO Phillips Baker Jr.’s past work as a vice-president of Pegasus Gold. Pegasus abandoned mines near the Fort Belknap Indian Reservation in the ‘90s and cost state taxpayers over $35 million to clean up.

Under former-Gov. Steve Bullock’s Administration, DEQ tried to use the state’s “bad actor” law to prevent Hecla from developing the Rock Creek and Montenore mines in northwest Montana so long as Baker Jr. was affiliated with Hecla, or the cleanup costs for the former Pegasus mines went unpaid. The law prevents mining companies or their executives from obtaining new operating permits if they fail to clean up past mines.

Hecla sued, claiming DEQ didn’t have jurisdiction over the Idaho-based company or its CEO. But earlier this spring a Montana judge ruled that it did have the authority to apply the law to out-of-state mining companies and executives working in Montana.

The Montana Environmental Information Center was an intervenor in the case. Staff attorney Derf Johnson says the Greg Gianforte administration’s decision to drop the issue could have consequences beyond this case.

“They’re also sending a message to other operators in the state, other currently operating mines, that it’s ok for them to leave a mess and that they’re not going to be held accountable.”

If the state had continued to pursue the case, Johnson wanted the courts to force Hecla to either reimburse the state for the cleanup costs of the former Pegasus mines or disassociate with Phillips Baker Jr.

Hecla spokesperson Luke Russell says the company is happy with the Gianforte administration’s decision.

“And we have long believed that an objective read of the statute would conclude its inapplicability to Mr. Baker, Hecla or our Montana subsidiaries, and we look forward to the court affirming this DEQ motion.”

Russell says Hecla is still in the exploratory phase for both the Rock Creek and Montenore mines in northwest Montana, but this decision paves an easier path for Hecla to obtain operating permits from the state in the future.

Copyright 2021 Montana Public Radio. To see more, visit Montana Public Radio.

Aaron is Montana Public Radio's Flathead reporter.