Alaska News

Feds charge mining company and executives with criminal pollution in Southwest Alaska

BETHEL - An Australian-led mining company owned by an offshore corporation and five of its top officials and employees conspired to dump waste from a platinum mine into a Southwest Alaska salmon river, a federal indictment handed up Tuesday alleges.

Four of the officials with XS Platinum Inc. also falsified records to hide what they did, and all five knowingly allowed polluted water to be discharged, the charges say. None of those charged lived in Alaska.

Platinum Creek Mine, situated along the Salmon River and its tributaries, stretched its mining claims across more than 4,000 acres. The active claims were on land managed by the federal Bureau of Land Management and the rest were within the Togiak National Wildlife Refuge.

XS Platinum, owned by a corporation registered in the Bailiwick of Jersey in the Channel Islands, off the French coast of Normandy, operated the mine for four years, until 2012, according to the indictment.

Starting in 2010 and continuing the next year, the mine operators failed to follow the monitoring requirements of their government-issued permit and their own early promise of "zero discharge," the indictment said. Instead, they "knowingly" dumped polluted mine wastewater into the Salmon River, then hid what they did, the indictment said.

The Alaska Department of Environmental Conservation administered the mine's Clean Water Act permit, part of the National Pollutant Discharge Elimination System, for the federal Environmental Protection Agency.

Under its general permit, XS Platinum was supposed to sample any discharged water three times a week, record the results, meet strict limits for turbidity and submit annual reports to DEC or EPA.

Two of the mining company's top officials -- Mark Balfour, an Australian, and James Slade, a Canadian -- assured the BLM in November 2010 that the company would install a process water clarifier for the 2011 mining season but didn't tell the agency that the mine already was discharging polluted water, the indictment said. The clarifier would remove solids from mining water so it could be reused rather than discharged back into the environment.

The company's chairman and chief executive, Bruce Butcher of Sydney, Australia, decided in early 2011 not to buy the clarifying equipment. While it would be "nice to have," the item "should be shelved," Butcher said, according to the charges.

Instead, operators discharged turbid water from mining operations into ponds, where it then leached into the Salmon River and Kuskokwim Bay, the indictment said. The company failed to report the discharges to EPA or DEC.

In one example, from July 4, 2010, the mine's general manager, Robert Pate, of Spokane, Wash., directed employees to dig a ditch to drain mine wastewater into Squirrel Creek, the indictment said.

On Jan. 31, 2011, Pate sent DEC an email that served as the company's annual report for the 2010 mining season in which he said Platinum Mine had had "no discharge" into the Salmon River or tributaries, the charges say. He copied Butcher, Balfour and Slade. The charges say all four knew the information was false.

On July 3, 2011, Slade and James Staeheli, a worker from Washington state who moved up from being an hourly employee to management, received an email from a mine employee saying the "turbidity levels at the fishing hole have now (exceeded) legal limits. Last season the turbidity did not exceed the legal limits that far downstream until the 15th of October."

That August, a federal fisheries biologist flew over the mine and the Salmon River and photographed turbid water from the mine to the river's mouth at Kuskokwim Bay, the indictment said.

On Tuesday, XS Platinum and the five men -- Butcher, 59, Balfour, 62, Slade, 57, Pate, 62, and Staeheli, 43 – were indicted on various charges related to violations of the Clean Water Act. All five were charged with conspiracy and knowingly violating the permit. All but Staeheli were charged with submitting a false statement. Butcher was also accused of submitting a separate false statement.

Lisa Demer

Lisa Demer was a longtime reporter for the Anchorage Daily News and Alaska Dispatch News. Among her many assignments, she spent three years based in Bethel as the newspaper's western Alaska correspondent. She left the ADN in 2018.