Unfinished business at Asarco: Superfund cleanup 'in limbo' as firm struggles
By Craig Welch
Seattle Times staff reporter
Asarco’s financial troubles have interrupted cleanup at its former copper-smelting operation on Ruston’s waterfront, near Tacoma, and more than 40 other sites nationwide.
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RUSTON, Pierce County — The waters of Commencement Bay lap against a seawall of new rock erected to prevent arsenic-laden slag from sloughing off into Puget Sound.
It's quiet at Asarco's former copper-smelting operation in Ruston — and that's the problem.
While Asarco is a Superfund site that officials view as a model for environmental restoration and corporate-government cooperation, cleanup has ground to a halt. And there are growing questions about how the $60 million bill for finishing the job will be paid.
As February rolls into March, massive cleanup work dormant for the winter typically winds back into gear.
But "we're in limbo," said Kevin Rochlin, who oversees cleanup in Ruston for the U.S. Environmental Protection Agency (EPA). "There is no mobilization for the season. Some contractors have left the site."
Asarco, one of the leading mining-and-refining companies operating in the United States, is in financial turmoil. And that's affecting Superfund sites across the region.
In northern Idaho, where Asarco is one of two companies ripping up and replacing lead-contaminated yards from a century of mining, state officials have done no planning for the season's restoration work.
In Montana, where lead and arsenic are sprinkled over soil and are contaminating ground water, EPA officials are scrambling to reprioritize Asarco's tasks.
In fact, Asarco has at least some responsibility for environmental cleanup at more than 40 sites across the country, amounting to a tab federal officials estimate could surpass $1 billion.
Its financial problems grow more serious by the day. Already nearly $1 billion in debt, Asarco last fall defaulted on an $84 million loan. It's losing money just keeping its doors open. Copper prices, for the time being, are in the tank. And the company is scurrying to restructure its finances.
"Asarco has no money; it's really sucking wind," James Harper, an analyst with BCP Securities in Connecticut, said Friday. "And two days ago they came out with terrible earnings, as ugly as possible."
Although Asarco has spent $180 million so far on cleanup at its Ruston site, more work awaits: Soil samples must be tested, shoreline work needs to be finished and contaminated tailings need to be moved.
For the moment, Asarco is mired in negotiations with the EPA and the Justice Department over how to rearrange its responsibilities. Company officials say Asarco will meet its obligations; it needs only a slower timetable.
"We're a 103-year-old company and we're certainly expecting to be around a lot longer, but it's a tough time and we're doing what we can," said Asarco spokesman Clay Allen.
But at a time the Bush administration and Congress are jockeying over whether companies or taxpayers should foot the bill for Superfund sites when responsible parties don't, some environmental officials and community leaders are fretting:
What happens if Asarco's problems get worse?
The short answer is that no one seems to know.
Mining cleanup often troubled
The Superfund trust, an account initially established with corporate taxes, was set up to cover cleanup costs when no responsible party was found. Over the years, taxpayers have footed the bill for more and more of the fund, a trend the Bush administration seeks to continue.
Historically, the fund has been used to clean up about 30 percent of the nation's more than 1,500 sites. Companies themselves have paid to clean up the other 70 percent.
But Katherine Probst, a Superfund analyst with Resources for the Future, a nonprofit think tank that researches environmental issues, said Superfund sites involving mining companies historically have gone the opposite direction: The fund pays about 70 percent, and companies pay 30 percent.
"That whole industry, for a variety of reasons, hasn't paid as often as other industries do," she said.
In the early 1990s, for example, just as the government was negotiating its cleanup responsibilities, Gulf Resources and Chemical, which ran Idaho's Bunker Hill Mine, lost $200 million in five years. It was forced by the government into bankruptcy. Bankruptcy attorneys made millions of dollars. Taxpayers were left with much of the cleanup bill.
Neither Asarco nor the EPA will discuss details of Asarco's troubles or of its negotiations with the agency. Allen, the Asarco spokesman, said it is sharing its financial data and helping the EPA understand its relationship with Grupo Mexico, the Mexico City mining giant that bought Asarco in 1999.
Setting priorities is tricky
At the moment, even the analysts believe Asarco's problems are temporary.
"The big picture is Asarco is here to stay," said Harper, the BCP analyst. "It will be made more efficient, but it's not going anywhere."
But it's too soon to say how its obligations could change.
"You've got EPA site managers in seven regions who all think their sites are the top priority," said Chris Pfahl, with Asarco in Idaho. "We're saying we've only got so much money. We'll do some work this year, it's just a question of how much."
Lots to do throughout nation
In Ruston, by company estimates, Asarco has forked over $180 million on restoration and has earned rave reviews from the EPA. Officials have said company regulators at times have been tougher than the government on cleanup contractors. But there are still yards to be replaced, soil samples to be tested, more shoreline work to complete, piles of contaminated tailings to be moved to a landfill.
Asarco also is responsible for a $60 million cleanup in Everett. And state environmental officials are investigating lead and arsenic contamination from Maury and Vashon islands to rural Pierce County, and they expect eventually to notify Asarco that it is a potentially liable party.
"All I can say is the contamination covers hundreds of square miles and there are thousands of properties impacted and it will take several decades to address," said Marian Abbett, with the state Department of Ecology.
That's just in Washington.
At other sites, Asarco shares responsibility with other parties, which could complicate the picture.
In north Idaho, lawn replacement inside the 21-square-mile Bunker Hill Superfund site is expected to cost $5 million this year alone, split between Asarco and another company.
In Butte and East Helena, Mont., where Asarco shares some responsibility for two sites with Arco, the EPA estimates the company is committed to $15 million in work over five years.
Already, the EPA is beginning to evaluate its options.
"We're trying to prioritize, in case they go away," said Diana Hammer, with the EPA in Montana. "Now that Asarco's in trouble, we're starting to look a bit more at Arco."
Craig Welch can be reached at 206-464-2093.