DEP, ISG Subsidiary Agree to Establish $19.9 Million Trust Fund to Treat Mine Drainage From Former BethEnergy Sites

CROYLE TOWNSHIP, Pa., June 17 /PRNewswire/ -- On behalf of Governor Edward G. Rendell, Environmental Protection Secretary Kathleen A. McGinty and officials from ISG Inc. and Pristine Resources Inc. today announced an agreement that will create a $19.9 million trust fund to finance continual treatment of polluted mine pool discharges in Cambria, Somerset and Butler counties.

“This is a tremendous victory for both the environment and the health and safety of those Pennsylvanians who live near these sites,” Secretary McGinty said. “We were happy to work with ISG and we commend the company for its commitment to address these responsibilities. This agreement ensures that these mine pools will not break out onto the surface, threatening local waterways and a public reservoir in Mineral Point, Cambria County.”

The trust fund is the second largest established in the state's efforts to ensure that funding exists in perpetuity to treat polluted mine discharges in the Commonwealth. The largest trust fund was established in September 2003. It comprised $27 million and other assets as the result of a federal bankruptcy case involving LTV Steel Co.

In this case, the discharges stem from seven underground mines and three coal refuse disposal areas formerly operated by Bethlehem Steel Corp. and its subsidiary, BethEnergy Mines Inc. The assets of Bethlehem Steel were acquired by ISG in 2003.

ISG President and CEO Rodney Mott said: “We are very pleased to complete this agreement with Secretary McGinty and DEP. The agreement and trust fund protects the environment and achieves a cost-effective solution that also clearly defines ISG's costs into the future. This clarity is especially important in helping to define the role of our substantial Pennsylvania coal reserves in the context of ISG's overall long-term raw material strategy.”

Under this agreement, Pristine Resources, a subsidiary of ISG, will establish the trust fund to provide for perpetual treatment of the mine water. The department originally estimated the need for a $47 million trust to accomplish this, but operational improvements and efficiencies recommended by ISG and approved by DEP reduced the amount to $19.9 million.

ISG already has funded about $2.6 million in an escrow account and expects to fund the balance over the next several years. The company invested those funds as part of an initial agreement reached with the department in May 2003 for the treatment of the discharges and the reclamation of additional surface features at an underground mine and coal refuse disposal area located in Washington County.

“This agreement is the next step in ensuring that adequate funding is available to provide for the continual treatment of polluted mine drainage from the former BethEnergy sites. The only step remaining is for the companies to identify a trustee and execute a trust agreement with that party,” Secretary McGinty said. “ISG and Pristine Resources have shown us a plan detailing how they will provide continual treatment of these discharges through the trust fund. We conducted a thorough review and are satisfied it will protect these water resources.”

Under the agreement, Pristine Resources has until July 31 to identify the trustee and execute an agreement of trust with that party to formalize the trust. By that date, the company also has agreed to identify plans and timeframes for implementing operational improvements at some of the treatment facilities. The company expects to invest about $4 million over time into the improvements of these facilities to reduce annual operating costs.

Pristine Resources has been treating the discharges since ISG purchased the sites from Bethlehem Steel Corp. and BethEnergy Mines Inc. last year, using treatment systems left behind by the former owners. The treatment of the discharges eliminated a threat to the local waterways of Cambria, Somerset and Butler counties, as well as the Mineral Point public reservoir.

Although the Commonwealth's mining legacy fueled this country's growth and economic development, it also left behind lasting scars: an estimated 2,000 abandoned and flooding mine pools that discharge polluted water from about 5,000 known points. As part of his plan to renew and enhance the state's Growing Greener program, Governor Rendell has proposed $100 million over four years to address a vast array of environmental and public-health problems at these abandoned sites, which pose significant environmental harms, hamper the state's economy and hinder attempts to revitalize communities. Without new resources, the state faces at least 350 years of cleanup.

The Governor's plan relies on a proposed referendum that would authorize an $800 million bond issue, which would be paid for with a mix of new and old fees on a small fraction of businesses that create waste and pollution. The Legislature must vote to put the funding for Growing Greener on the ballot so voters can choose yes or no.

At the same time, Governor Rendell has put Pennsylvania in a leadership role in the fight to ensure that Congress reauthorizes the federal Abandoned Mine Land fund and that the Commonwealth secures its fair share of federal funding for abandoned mine land reclamation. Under a reauthorization proposal currently before Congress, Pennsylvania's share of funding could increase from roughly $24 million a year to $35 million annually.

Contact Information

Karl Lasher

Contact via E-mail