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Regulators recovering costs for treating pollution from mine

The Dakota Maid pit at the Gilt Edge mine east of Lead contains water polluted by acid rock drainiage. (EPA photo)

PIERRE -- Financial settlements reached recently with two sets of companies will more than double the amount in a special state fund that helps pay for cleaning up water pollution still occurring at a closed gold mine in the Black Hills.

The state Department of Environment and Natural Resources is receiving $8.42 million as South Dakota's share of the new settlements. The U.S. Environmental Protection Agency will get $21.78 million.

Cyprus Mines Corp. is paying $26 million while Homestake Mining Company of California is paying $4.2 million.

The money will be used by DENR and EPA for continuing the agencies' work at the Gilt Edge mine site in Lawrence County about five miles east of Lead in the drainages of Strawberry Creek and Bear Butte Creek.

Gold and silver were mined there starting in 1876. The site has a string of owners and operators that culminated in the 1986 sale to Brohm Resources Inc. for $1.25 million.

Brohm closed the operations in 1999 because of acid rock drainage from sulfide rocks exposed during mining. State environmental regulators began emergency water treatment and acid water treatment in July 1999.

The EPA took responsibility in August 2000 and later declared Gilt Edge as a federal Superfund pollution site. Brohm went out of business.

Official court papers filed in the settlement cases trace the history of owners, operators and services providers prior to Brohm. Expenses incurred by government regulators so far total more than $100 million for EPA and more than $5.6 million for DENR, according to court documents.

Water might need to be treated for many more years at the site.

State government has spent about $2 million so far from its special fund as its 10 percent share of Superfund spending for water treatment.

DENR spokesman Kim Smith said the state fund had a balance of $7.6 million at the June 30 end of the state fiscal year.

Smith said it's unknown whether $16 million -- the current $7.6 million plus the new $8.4 million from the two settlements -- will be sufficient to cover South Dakota's portion of the costs.

He said the final closure plans and associated costs are still being developed by EPA.