For years, HCCA and the community, including Town and County governments, have raised concern over the lack of bonding or assurance for the Water Treatment Plant (WTP) that U.S. Energy Corp. (USE), owns and operates on Forest Service land to treat toxic acid mine drainage before it enters Coal Creek, just a few miles upstream from Crested Butte.
This concern has received renewed attention as we’ve watched USE’s financial situation deteriorate since last November. Last month the company announced it would reduce general and administrative costs by approximately 20%, including a 15% reduction in work force and a significant cut in annual compensation for the remaining employees. This announcement came on the heels of USE’s First Quarter Report that noted only $4 million in cash and cash equivalents while re-affirming that operating the WTP alone costs $425,000 per quarter―coming in at 1.7 million a year. On July 14, USE received a listing standard notice from NASDAQ for failing to meet the listing requirement of maintaining a minimum bid price of $1 for the previous 30 consecutive business days. Over the last week, USE’s stocks have remained well under a dollar, closing Tuesday July 22, 2015 at 40¢.
Companies with oil and natural gas focus, like USE, are not the only companies that have recently been hit hard. The hard rock mining industry, which includes molybdenum, the mineral deposit under Red Lady, has similarly been in a tough spot. Last month, Molycorp, which was once the leader in rare-earth mining, filed for bankruptcy while Thompson Creek Metals citing the continued weak molybdenum market announced it would mothball its Endako mine in British Columbia. At the international level, Pope Francis raised attention to the mining industry’s abuses, especially highlighting the world’s poorest countries where often times locals seeking to protect their clean water, clean air, and way of life from the devastating impacts of mining are steamrolled. Pope Francis called on the industry to make a “radical change” so local communities’ rights are respected and the environment protected as “we are all part of one human family.”
HCCA has worked tirelessly to ensure our community and our drinking water is safe, regardless the financial situation of the company running the plant. We need to know with certainty that we’re protected and the WTP’s operation and needed upgrades will not be in jeopardy. Thus, two weeks ago, we raised this issue before the Town and we are pleased to report and commend the Town Council for approving at Monday’s meeting that the Town Attorney draft a letter raising this issue with the State and Federal agencies that have authority to require financial assurances for the operation, maintenance, and upgrade of the WTP.
HCCA will keep you apprised as this situation develops and will continue being the Valley’s advocate, protecting our community and drinking water and never losing sight of the goal to have a permanent protective solution that will forever keep Red Lady mine-free.