Mine owner must maintain water treatment bond

Utah regulators are refusing to ease up on a requirement that the operator of a coal mine where nine people died in 2007 make a payment guarantee for treatment of polluted groundwater spilling from the mine's portal.

The Utah Board of Oil, Gas & Mining ruled Thursday that Genwal Resources Inc. must maintain a $720,000 reclamation bond for water treatment at the Crandall Canyon mine.

Genwal is inclined to accept the ruling without filing an appeal to the Utah Supreme Court, company lawyer Kevin Anderson said Thursday.

Genwal had sought to reduce the $720,000 bond to a $480,000 guarantee and transfer the difference into an operating account used to pay for the water treatment.

The state board, however, ruled the higher bond amount is necessary to guarantee treatment for at least three years if the company ever goes out of business.

Genwal sought to reduce the bond amount to two years' worth of water treatment, saying that's when it expects the mine discharge water to cleanse itself of iron levels that initially stained local creeks orange.

Genwal is paying out of pocket to treat the iron-rich water before it spills into local creeks. The reclamation bond is just a guarantee the work will continue if the company ends the work for any reason.

At first, regulators wanted Genwal to post a bond guaranteeing water treatment in perpetuity. The company estimated that would require a $30 million bond and asked the board to reduce the bond amount to $720,000. Then it proposed cutting the bond amount again and transferring the difference to a cash account used for water treatment.

Genwal still disagrees that a reclamation bond is even needed while Genwal remains in an operational mode at Crandall Canyon and before the company abandons the mine for good, Anderson said.

Another side of Crandall Canyon that didn't collapse still has bountiful coal reserves, he said.

Genwal pleaded guilty to a pair of misdemeanor safety violations in March and paid a $500,000 fine for the 2007 collapse.

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