However, when the ore was depleted, miners often left  behind a legacy of abandoned mines, structures, safety hazards, and  contaminated land and water. Federal Agencies Have Spent At Least $2.6 Billion to Clean Up Abandoned Hardrock Mine Sites Since 1998

Between fiscal years 1998 and 2007, the four federal agencies we  examined—BLM, the Forest Service, EPA, and OSM—spent at least $2.6  billion to reclaim abandoned hardrock mines on federal, state, private, and  Indian lands. EPA has spent the most—$2.2 billion. Finally, OSM provided grants with an  annual median value of about $18 million to states and Indian tribes  through its SMCRA program for hardrock mine cleanups. The Forest Service was unable to provide this  information by state. Prior State Estimates of the Number of Abandoned Hardrock Mine Sites Vary Widely, but Our Data Show at Least 161,000 Sites, with Many Posing Hazards

Previous state estimates of the number of abandoned hardrock mine sites  vary widely in the six studies that we reviewed because, in part, there is no  generally accepted definition for a hardrock mine site and the studies rely  on the states’ different definitions of hardrock mine sites. Using our  consistent definition, 12 western states and Alaska estimated a total of at  least 161,000 abandoned hardrock mine sites in their states on state,  private, or federal lands. According to  this estimate, the Forest Service may have about 29,000 abandoned  hardrock mine sites on its lands. Using a Consistent Definition, GAO Estimated at Least 161,000 Abandoned Sites

To estimate abandoned hardrock mining sites in the 12 western states and  Alaska, we developed a standard definition for these mine sites. BLM Estimates That Operators Have Provided About $982 Million in Financial Assurances—About $61 Million Less Than Needed to Cover Estimated Reclamation Costs

As of November 2007, hardrock mining operators had provided financial  assurances valued at approximately $982 million to guarantee the  reclamation costs for 1,463 hardrock mining operations on BLM lands in  11 western states, according to BLM’s Bond Review Report. The report  also indicates that 52 of the 1,463 hardrock mining operations had  inadequate financial assurances—about $28 million less than needed to  fully cover estimated reclamation costs. The $33 million difference between our estimated shortfall of nearly $61  million and BLM’s estimated shortfall of nearly $28 million occurs because  BLM calculated its shortfall by comparing the total value of financial  assurances in place with the total estimated reclamation costs. This  calculation approach has the effect of offsetting the shortfalls in some  operations with the financial assurances of other operations. However, the  financial assurances that are greater than the amount required for an  operation cannot be transferred to an operation with inadequate financial  assurances. BLM  officials agreed that it would be valuable for the Bond Review Report to  report the dollar value of the difference between financial assurances in  place and required for those operations where financial assurances are  inadequate and have taken steps to modify LR2000. Appendix I: Objectives, Scope, and Methodology

To determine the (1) federal funds spent to clean up abandoned hardrock  mine sites since 1998, (2) number of abandoned hardrock mine sites and  the number of associated hazards, and (3) value and coverage of the  financial assurances operators use to guarantee reclamation costs on the  Department of the Interior’s Bureau of Land Management (BLM) land, we  interviewed officials at the BLM, the U.S. Department of Agriculture’s  Forest Service, the Environmental Protection Agency (EPA), and the  Department of the Interior’s Office of Surface Mining Reclamation and  Enforcement (OSM); examined agency documents and data; and reviewed  relevant legislation and regulations. We presented these data in 2008  constant dollars. Appendix IV: Information on BLM Financial Assurances and Their Adequacy to Cover Estimated Reclamation Costs

This appendix provides information from BLM’s November 2007 Bond  Review Report, which includes information on the number of financial  assurances in place for hardrock operations on BLM lands in 11 western  states (table 7); the value of these financial assurances by state (table 8);  the number of inadequate financial assurances for notice- and plan-level  operations, by state (table 9); and BLM’s and our analyses of the  differences between financial assurance requirements and actual value of  financial assurances in place for notice- and plan-level operations by state  (table 10).
Why GAO Did This Study

The Mining Act of 1872 helped foster the development of the West by giving individuals exclusive rights to mine gold, silver, copper, and other hardrock minerals on federal lands. However, miners often abandoned mines, leaving behind structures, safety hazards, and contaminated land and water. Four federal agencies--the Department of the Interior's Bureau of Land Management (BLM) and Office of Surface Mining Reclamation and Enforcement (OSM), the Forest Service, and the Environmental Protection Agency (EPA)--fund the cleanup of some of these sites. To curb further growth in the number of abandoned hardrock mines on federal lands, in 1981 BLM began requiring mining operators to reclaim lands when their operations ceased. In 2001, BLM began requiring all operators to provide financial assurances to guarantee funding for reclamation costs if the operator did not complete the task as required. This testimony provides information on the (1) federal funds spent to clean up abandoned hardrock mine sites since 1998, (2) number of abandoned hardrock mine sites and hazards, and (3) value and coverage of financial assurances operators use to guarantee reclamation costs on BLM land. To address these issues, GAO, among other steps, asked 12 western states and Alaska to provide information on the number of abandoned mine sites and associated features in their states using a consistent definition.

What GAO Found

Between fiscal years 1998 and 2007, BLM, the Forest Service, EPA, and OSM spent at least $2.6 billion (in 2008 constant dollars) to reclaim abandoned hardrock mines. BLM and the Forest Service have reclaimed abandoned hardrock mine sites on the lands they manage; EPA funds the cleanup of these sites, primarily on nonfederal lands through its Superfund program; and OSM provides some grants to states and Indian tribes to clean up these sites on their lands. Of the four agencies, EPA has spent the most--about $2.2 billion (in 2008 constant dollars) for mine cleanups. BLM and the Forest Service spent about $259 million (in 2008 constant dollars), and OSM awarded grants totaling about $198 million (in 2008 constant dollars) to support the cleanup of abandoned hardrock mines. Over the last 10 years, estimates of the number of abandoned hardrock mining sites in the 12 western states and Alaska have varied widely, in part because there is no generally accepted definition for a hardrock mine site. Using a consistent definition that GAO provided, 12 western states and Alaska provided estimates of abandoned hardrock mine sites. On the basis of these data, GAO estimated a total of at least 161,000 such sites in these states with at least 332,000 features that may pose physical safety hazards and at least 33,000 sites that have degraded the environment. According to BLM's information on financial assurances as reported in its November 2007 Bond Review Report, mine operators had provided financial assurances valued at approximately $982 million to guarantee reclamation costs for 1,463 hardrock operations on BLM land. The report also estimates that 52 mining operations have financial assurances that amount to about $28 million less than needed to fully cover estimated reclamation costs. However, GAO found that the financial assurances for these 52 operations are in fact about $61 million less than needed to fully cover estimated reclamation costs. The $33 million difference between GAO's estimated shortfall and BLM's occurs because BLM calculated its shortfall by comparing the total value of financial assurances in place with the total estimated reclamation costs. This calculation approach has the effect of offsetting the shortfalls in some operations with the financial assurances of other operations. However, financial assurances that are greater than the amount required for an operation cannot be transferred to another operation that has inadequate financial assurances. BLM officials agreed that it would be valuable for the Bond Review Report to report the dollar value of the difference between financial assurances in place and required for those operations where financial assurances are inadequate, and BLM has taken steps to correct this. GAO discussed the information in this testimony with officials from the four federal agencies, and they provided GAO with technical comments, which were incorporated as appropriate.