Last week’s purchase of the Stillwater Mining Company puts one more Montana mine in foreign hands. Fortunately, a citizen-crafted agreement will keep the new company from being environmentally irresponsible.
On May 4, the Stillwater Mining Company finalized about six months of negotiations and agreed to sell $2.2 billion worth of assets to Sibanye Gold Limited, a South African gold mining company. The buyout helped Stillwater transfer $500 million worth of debt it had accumulated since the 2008 recession.
Headquartered in Littleton, Colo., with mines in the Beartooth Mountains near Nye and East Boulder, the Stillwater Mining Company was and still may be the largest publically traded company in the state and employs about 1,440 people. It’s the only mine complex in North America that produces platinum and palladium, two precious metals used in jewelry and automobile catalytic converters.
But the market dropped in 2012, hurt by low prices caused by a worldwide supply glut and softening Asian demand, particularly for platinum. The company laid off 119 workers at its Nye mine and Columbus smelter in 2013 to cut costs.
More money was lost when Stillwater tried to invest in a $450 million copper mine in Argentina and later when it spent $4.3 million trying to fight a 2013 hostile takeover by former governor Brian Schweitzer and the Clinton Group. Schweitzer was successful and is still Stillwater’s chairman.
But Sibanye directors think the catalytic-converter market will pick up again, so last year, they bought two other companies with platinum mines in South Africa and Zimbabwe.
While Stillwater employees may be relieved to still have their jobs, African companies don’t have the best reputation when it comes to preserving the environment. Few African countries have strong environmental protections, and many are poor so they desire the money that mines generate. The diamond and coal strip mines of South Africa and Zimbabwe show how less-than-scrupulous companies mine for gems or metals and then leave the land devastated.
Fortunately, that shouldn’t happen with the Stillwater Mines, thanks to a Good Neighbor Agreement hammered out 17 years ago between mine managers and the Billings-based Northern Plains Resource Council. Northern Plains is a grassroots conservation and family agriculture group focused on protecting eastern Montana’s water quality and family farms and ranches.
Prior to 2000, people who owned land near the mines were concerned about the effects of the mines on their property and quality of life. As a result, the Northern Plains Resource Council filed a number of lawsuits against the Montana Department of Environmental Quality to require strict enforcement of environmental standards related to the mines.
Then, to avoid the cost of going to court, the NPRC proposed working out a compact that could nullify ongoing lawsuits and avoid any in the future. After some tough haggling and a few stalemates, the mine managers and the NPRC signed the 2000 Good Neighbor Agreement, a legal arrangement that was possibly the first of its kind.
Under the agreement, locals are given a say in mining practices to preserve the land and water. A transportation plan reduces traffic on the winding road into the Beartooth Mountains and water quality standards were set higher than state requirements.
Plus the NPRC had the foresight to connect the agreement to the mining claim so any company that owns the claim has to abide by the agreement. The only way the agreement can be broken is if the NPRC sues the company.
“We will continue to work with Stillwater Mining Company, and new owners, Sibanye Gold, to enforce the high standards of the Good Neighbor Agreement,” said Big Timber resident and Agreement Task Force Chair Jerry Iverson. “Sibanye Gold takes over the Stillwater and East Boulder mines at an important time. Both mines will need to expand storage facilities for tailings and waste rock in the near future. It is extremely important that those facilities are developed in a way that protects our communities and the water quality of Stillwater and Sweet Grass counties.”
Although the NPRC based its agreement on an earlier one involving a Philadelphia, Penn., refinery, spokesman Larry Winslow said he knew of few other instances where similar agreements provided environmental protection. It may be a testament to both the mine owners and the NPRC that they were able to find enough common ground to put one together.
That’s backed up by a 2004 University of Colorado Law School review, which looked at 11 Good Neighbor Agreements. Although all were effective at reducing environmental conflicts, the Stillwater Mine agreement was “unusually sophisticated in terms of the scope and complexity of the agreement and the community group resources committed to the successful implementation.”
But corporations and nonprofit groups still embroiled in environmental struggles might take note of the capability of Good Neighbor Agreements to reduce conflict.