Australian Mining Executives Face US Charges

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Friday, November 21st, 2014
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Platinum Creek Mine
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The Australian heads of a platinum mine have been indicted in the US for conspiring to dump waste in Alaska’s Salmon River, which crosses a wildlife refuge.

The 28-page indictment handed down by a grand jury in the US District Court of Alaska portrays Sydney-based Bruce Butcher, the former chairman and chief executive of XS Platinum Inc, and former executive vice president Mark Balfour of Perth, as focused on the mine’s viability rather than the environment.

Butcher and Balfour, along with two US and one Canadian co-accused, allegedly concealed violations “to save costs and avoid regulatory scrutiny” while knowingly discharging “a pollutant, namely effluent from a platinum mine”, into the river.

Prosecutors have listed 23 “overt acts” by the defendants.

The Platinum Creek Mine, a no-discharge facility, was located on the Salmon River, an anadromous fish stream crossing the Togiak National Wildlife Refuge before entering the Pacific Ocean at Kuskokwim Bay.

The waterway is important for the spawning of all five species of Pacific salmon – chinook, chum, coho, pink and sockeye.

Emails allegedly written by or sent to Butcher, Balfour and other company employees were obtained by prosecutors.

“I would prefer we not be engaging the regulators at this stage on our so-called ‘zero-discharge’ plant as all that will do is immediately raise expectations to the point that that will become today’s standard,” Butcher allegedly wrote to Balfour and two other executives.

Despite knowing “for some time about the turbidity and porosity matters that we need to address”, Butcher wrote the company was “not in a position” to install a water clarifier at the mine, prosecutors allege.

A clarifier cleans and recycles process water and prevents discharges.

Authorities closed in on August 10, 2011 when a US Fish and Wildlife Service biologist flew over the mine and Salmon River and allegedly observed turbid water all the way to Kuskokwim Bay.

XS Platinum’s former general manager Robert Pate, of the US, former chief operating officer James Slade, of Canada, and former plant operator James Staeheli, of the US, are also charged in the indictment.

The five defendants face counts of conspiracy, Clean Water Act permit violations, submitting a Clean Water Act false report and making a false statement.

The alleged overt acts include:

  • On September 8, 2011, less than a week after receiving a violation notice, Slade wrote a memo to Butcher and Balfour stating the mine would “continue to produce 24/7 until the wheels fall off” and the “major focus is to produce enough concentrate to exceed the contract this season”.
  • The company failed to alert authorities when an employee emailed the mine’s environmental manager declaring turbidity numbers in the river “went through the roof”.
  • Authorities were not alerted when an employee emailed executives stating turbidity levels at a fishing hole downstream had exceeded legal limits and “the issue should be addressed before things get too out of hand”.

XS Platinum was incorporated in Delaware in 2007 and was a wholly-owned subsidiary of an off-shore limited corporation registered in Jersey, Channel Islands.

The Alaskan mine operated from 2008 to 2012.

The parent corporation was capitalised at $US34 million by more than 100 international investors primarily from Australia and Europe, but dissolved in September 2013.

 

By Peter Mitchell
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