Curis is required to provide a funding mechanism to ensure this site gets cleaned up when mining is complete 20 or more years from now (known as the “financial assurance” requirement). Although both the State of Arizona and USEPA permit a mining company to use any one of a variety of funding mechanisms, the best methods to assure that cleanup costs will not fall on the taxpayers are surety bonds, certificates of deposit, trust funds, or letters of credit. We believe that Curis’s proposed funding mechanism, an environmental insurance policy, provides little certainty that cleanup costs will be covered because coverage lapses if the premiums are not paid. The United States General Accounting Office has warned that such policies often prove inadequate to cover cleanup costs in a report available here.
Representatives of Curis have repeatedly asserted that Curis will be posting a cash bond to cover the cost of cleaning up groundwater and soil at the site when mining is complete. In a July 14, 2001 news article, Curis’s President and CEO denied that Curis will use insurance to cover cleanup costs and was quoted as saying, “We would be posting a significant cash bond.”
Curis’s application to the Arizona Department of Environmental Quality for an Aquifer Protection Permit (APP) clearly states that Curis will be obtaining an insurance policy from Zurich American Insurance Company to satisfy the financial assurance requirement for the APP. The January 2011 financial assurance letter from Bernard Tan, Curis’s Chief Financial Officer, can be found here. We checked with the ADEQ as recently as July 18, 2011, and the agency confirmed that an insurance policy is still the funding mechanism Curis intends to use.
Curis also hopes to persuade USEPA to forego any form of financial assurance for closure of the wells regulated by the federal government, arguing that the financial assurance provided to the State under the APP application is sufficient. Curis’s submission to USEPA regarding financial assurance, which also states that Curis will be providing an insurance policy to meet APP requirements, can be found here.
Drinking Water Aquifer
The aquifer Curis will be mining is directly adjacent to an aquifer that is currently used for drinking water by Johnson Utilities and will be used in the future by the Town of Florence for drinking water supplies. Water flows through the copper-bearing aquifer Curis will be mining into the downstream drinking water aquifer. A diagram depicting the location of the two aquifers, the location of current and future drinking water wells, and groundwater flow can be found below:
Curis is technically correct when it states that it will not be mining the same aquifer that supplies drinking water wells. What Curis leaves unsaid is that the aquifer it will be mining borders the adjacent drinking water aquifer and there is no barrier between the two. Imagine a bathtub that is half full of tennis balls and half full of marbles. If you pour dirty water into the side with the tennis balls, that water will naturally flow into the side with the marbles. Curis is mining the tennis ball aquifer and any contaminants arising from that mining can flow into the marbles that supply your drinking water.
Curis also has repeatedly stated that a clay aquitard separates the ore-bearing aquifer from an upper aquifer that supplies other offsite wells. That upper aquifer is currently used for agricultural irrigation and livestock, not for human consumption. What Curis does not say is that current and future drinking water production wells are located in the deeper aquifer below that clay aquitard and downstream of the copper-bearing aquifer. As a result, the clay aquitard affords downstream drinking water wells no protection at all. Downstream production wells will have to rely on Curis’s extraction well system to prevent contaminants from flowing downstream, a system that is subject to well, pump, and piping failures; design limitations and inadequacies; and simple human error.