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Mining geologist set to plead guilty in Western Alaska pollution case

  • Author: Lisa Demer
  • Updated: May 31, 2016
  • Published March 2, 2015

A career mining geologist accused in an Alaska environmental crimes case involving the dormant Platinum Creek Mine is cooperating with authorities and will plead guilty on Wednesday to three federal charges, according to a plea agreement filed Monday in U.S. District Court in Anchorage.

Robert Pate, 63, is one of five executives and managers with Australian-led XS Platinum Inc. accused of polluting Alaska salmon streams when they restarted the old platinum mine in Western Alaska at the edge of Kuskokwim Bay. It is the first federal case in Alaska charging a mining company with criminal violations of the Clean Water Act.

Pate, who lives in Spokane, Washington, is scheduled to plead Wednesday before U.S. District Judge Sharon Gleason. She will sentence him at a later hearing after the government evaluates whether he held up his end of the agreement.

"The United States will make an appropriate recommendation at that time based upon all the sentencing considerations, including Mr. Pate's assistance in the ongoing case," Kevin Feldis, an assistant U.S. attorney in Anchorage, said in an email. He is prosecuting the case along with Todd Mikolop, a federal environmental crimes trial attorney based in Washington, D.C.

Pate has agreed to pay a $10,000 fine and faces up to five years in prison, the maximum under federal law for the three counts. The government intends to recommend a mix of prison time and house arrest, and the defense may urge less time, according to the plea agreement.

"He's been working as a professional mining geologist his entire adult life and this is the first time he's ever been in any trouble more serious than a traffic ticket," said defense lawyer Michael Grisham, who, along with former U.S. Attorney Bob Bundy, represents Pate. "It's an unusual situation for him to find himself in."

Grisham said his client has worked on various mining projects in the U.S. and abroad, including in Alaska, Nevada and Indonesia.

Pate worked for XS Platinum from February 2010 to June 2012 and was the on-site mine manager from May through July 2010. The company bought the mining operation in 2007 but lost it to foreclosure in 2012.

XS Platinum told regulators the operation would reuse all mining wastewater on site in a self-contained "zero discharge" system. Operators extracted precious metals from old tailings by processing them with fresh water. The process water was supposed to be piped to ponds where waste materials would settle to the bottom.

But early on, there were signs the processing system was polluting salmon streams, according to the federal indictment against the men as well as the new plea agreement.

At a meeting in February 2010 that included Pate and top company executives Bruce Butcher and Mark Balfour of Australia, they discussed how settling ponds needed to be lined to stop seepage into the Salmon River. Pate obtained sample lining materials and quotes.

But Butcher -- XS Platinum chairman and chief executive -- said the project should move ahead without liners, according to the plea agreement.

In June 2010, the mine started up for the 2010 season. Crews began processing tailings.

"Soon after operations began, Pate realized that turbid water was leaking out of the settling ponds and infiltrating into the Salmon River, and knew that this was not allowed," the court document said.

On July 3, 2010, in his first regular daily report to Butcher, executive vice president Balfour and chief operating officer James Slade, Pate wrote about seeing turbid water near the processing plant.

"The dirty turbid waters extended down for more than a kilometer below the process plant. I have attached photos which due to the overcast sky do not easily show how brown the water really appeared," Pate wrote, according to the court record. The turbid water, he wrote, came from "our discharge pond."

He proposed piping the water away from the plant and funneling it through a plastic-lined ditch, then back into another pipe to discharge into the Squirrel Creek/Platinum Creek drainage, the agreement said. He called that a "dead drainage" and said the journey should ensure the water was cleaned in case it ultimately flowed back to the Salmon River.

Pate then set up the system he proposed. But Squirrel Creek/Platinum Creek "is a water of the United States" and XS Platinum needed a permit to discharge into it, the plea agreement said. The company had no such permit at that time, prosecutors say.

His piping system also failed to protect the Salmon River, the document said.

"Today the discharge that we are putting into the Platinum/Squirrel Creek drainage must have began (sic) seeping through to the Salmon River side already," Pate wrote to Butcher, Balfour, Slade and another employee on July 9, 2010, according to the plea agreement. "It is very turbid this morning when I checked it at 11AM. See photos."

But operators didn't halt work to address the issue. Instead, the mine started running 22 hours a day. Butcher had demanded two shifts a day as soon as possible, the plea agreement with Pate said.

And so it went, with Pate repeatedly sending notes to his bosses about the cloudy water and operations continuing, the court document said.

In mid-July, Pate suggested the mine halt work because of the discharges. But Butcher told him to keep going, as did Slade, the plea agreement said. On July 11, Slade had led a tour of the mine for potential investors, the record said.

On July 17, 2010, Pate left the mine site and began working at the corporate office in Seattle. Slade replaced him as on-site manager and soon also noted the problems with turbidity, the plea agreement said.

XS Platinum had to submit an annual report to the Department of Environmental Conservation as part of its general permit, which it received July 30, 2010. In January 2011, Pate filed the report for the 2010 season and said that the mine operated with "no discharge," the plea agreement said.

Pate has agreed to plead guilty to two counts of discharging pollutants without a Clean Water Act permit and one count of submitting a false report.

The other defendants still face charges, as does the corporation itself. Prosecutors are trying to determine whether any remnant of the corporation still exists.

Besides Butcher, Balfour and Slade, of Calgary, former process manager James Staeheli is accused in the case. Staeheli, who lives in Washington state, has pleaded not guilty, as Pate did earlier. Slade is scheduled to appear in court Tuesday for his initial plea.

As Australian citizens, Butcher and Balfour are probably aware of the indictment, Feldis said, but have not entered the United States or contacted U.S. officials. "We will continue to take steps to have them appear in court to answer to the charges," Feldis said.

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