Kinross and Feds Settle 2015 Gold King Mine Blowout CERCLA Suit for $90M

The consent decree filed last Friday, if approved, will resolve all claims between several federal agencies, Sunnyside Gold Corporation, and its Canadian parent Kinross Gold Corporation (together, Kinross) over the pipe blowout in San Juan County, Colorado that sent millions of gallons of orange-yellow wastewater down the Animas River and into New Mexico, Utah, and the Navajo Nation. 

Kinross must pay $4.05 million to Colorado and $45.95 million to the federal government in order to resolve the claims pending against it, while the federal government itself will contribute $45 million to clean-up efforts.

“The uncontrolled release at Gold King Mine was due to a series of events spanning several decades,” an October 2018 U.S. Bureau of Reclamation report explained. Although Kinross ended Gold King Mine operations in 1991, it reportedly installed equipment that led to the blowout.

Parties also blamed U.S. Environmental Protection Agency (EPA) contractors working to remediate the site for the burst pipe and subsequent contamination. “[R]eclamation activities led by the U.S. Environmental Protection Agency (EPA) onsite project team triggered an uncontrolled rapid release of approximately 3 million gallons of acid mine water from the Gold King Mine located about 5 miles north of Silverton, Colorado,” the report said.

The incident spawned sweeping multi-district litigation involving Kinross, states, the federal government, property owners, and an Indian Tribe. It also prompted the EPA to create a superfund site in the abandoned mining areas around Silverton, Colorado.

Last week’s settlement is the latest in a series that have pared down the case, including one last August ending New Mexico and the Navajo Nation’s dispute with Kinross. The instant, 45-page consent decree is set to release the federal government and several agencies, the state of Colorado, and Kinross from all claims and counterclaims made during the litigation. 

It will undergo a 30 day public comment period, thereafter which the government will consider comments and respond to commentators. Only then, the filing explains, and if the United States “continues to believe that the settlement is fair, reasonable, and in the public interest,” will it ask the court to enter the consent decree.

Kinross Gold Corporation is represented by Holland & Hart LLP and Sunnyside Gold by Crowley Fleck PLLP. The federal and state litigants are represented by their own counsel.