The Story of the Pony Millsite
A Disaster We Could Have Prevented
In 1989 the Chicago Mining Company (CMC) came to Pony and announced big plans to build a cyanide vat-leach mill for processing gold ore on the hill above town. Chicago Mining promised jobs and prosperity for the community, but many of us had grave concerns about the mill.
The Concerned Citizens of Pony (CCP) formed in reaction to the millsite proposal. We studied the available information and concluded the company was a sham. It was clear and obvious then that this millsite would contaminate the groundwater with cyanide, and the company would disappear, leaving the tax payer to clean up the mess. Despite our protests, the regulatory agencies of the state of Montana approved of the millsite as a legitimate operation that would adequately safeguard the people and environment of this community.
But ultimately the mill did leak cyanide into the groundwater, and the company did file bankruptcy, leaving behind a royal mess on the hill above town. In 1998 the Montana Department of Environmental Quality (DEQ) spent more than $400,000 to clean up the cyanide at the site, but then refused to finish reclamation while the assets remained stuck in bankruptcy court.
One obstacle to resolve the bankruptcy and finish reclamation was the conflicting tax records, since the Pony Millsite was duplicated in the tax records, originally as individual parcels at agricultural rates, and then as a single parcel at industrial tax rates. Chicago Mining owed more than $330,000 in taxes on the Pony Millsite, but each of the individual parcels were purchased for only a few hundred dollars in back taxes by RJW, LLC. There was still a tax lien against the millsite and Chicago Mining, but the company no longer owned the land! The CCP brought this paradox to the Montana Department of Revenue, where it was resolved by deleting the duplicate land description, so that RJW, LLC had the land, and CMC's tax lien was owed only on the equipment. Although the situation was unusual, at least the land ownership was cleared up, so that the bankruptcy trustee could evaluate Chicago Mining's assets.
According to the DEQ, it would be impossible to get funds to finalize reclamation as long as the Pony Millsite remained in bankruptcy, a process that could easily drag on for a decade or more. Lawyers for the DEQ and the Montana Department of Justice insisted that the bankruptcy trustee, Andrew J. Maxwell in Chicago, was sitting on the file and would not even return their phone calls or letters. However, one phone call from the CCP revealed a very different story. Maxwell was very polite and saw no value in the assets at the millsite. He said he would gladly abandon the assets to the state--provided the state filed the necessary paperwork. The Department of Justice no longer had an excuse and soon followed through, finalizing the bankruptcy.
The next step in the reclamation process is to sell all the equipment at the site. The DEQ is coordinating with Madison county to hold a sheriff's auction at the Pony Millsite. Proceeds from the sale will be split between the county-- to recover taxes due, and the state--to recover a portion of cleanup expenses. The auction date is expected for September 2000.
The final hurdle to reclamation is to secure grant funds to regrade and seed the site. The Department of Environmental Quality (DEQ) has already submitted paperwork through the Department of Natural Resources and Conservation (DNRC) to the Resource Indemnity Trust Fund for a $290,000 grant to finish cleanup work at the site next year. The proposal will be ranked and submitted to the legislature for hearings during the upcoming legislative session. Gregg Mills at the DNRC reportedly said that the grant might be assigned a low rank, apparently because the remaining work is a not critical to the health and safety of the community. However, John Koerth, Program Supervisor for the Mine Waste Cleanup Bureau at the DEQ assured Mills that this grant proposal would have more public support at the legislative hearings than any other proposal there! Koerth is expecting the citizens of Pony to make a significant presence at the hearing in support of the grant.
The reclamation grant is important is because the Pony Millsite is a haven for spotted knapweed. This exotic plant thrives in the bare ground of the millsite, and the seeds blow every direction from there. Already there are five million acres of knapweed infested land in Montana. In many places the weed has replaced all other native grasses and wildflowers, creating vast monocultures of this basically useless plant. The millsite created the ideal habitat for knapweed to explode to all other lands across the watershed.
Despite spraying at the mill, there are still thousands of spotted knapweed plants producing tens of thousands of seeds, which are blowing across all other properties and starting new patches of this invasive weed. Spotted knapweed infestations greatly reduce forage productivity and plummet property values. Spotted knapweed already costs our state economy an estimated $42 million per year in lost productivity and weed control expenses. Finishing reclamation at the Pony Millsite and seeding it with desirable range plants will be cost effective prevention to stave off a much bigger knapweed explosion across neighboring properties.
The aerial photo below was taken in 1994. As you can see the millsite and plastic-lined tailings impoundment were permitted less than a thousand feet upstream from the community. In 1998 the state removed the plastic liner, capped the tailings pile, and cut a notch in the dam so run-off would not pool up there. The impoundment was graded and seeded, but without any topsoil. All other disturbances remain as they are shown in the photo.
Wildflowers-and-Weeds.com 
