Pit lake at the abandoned Paradise Peak mine, which will cost Nevada taxpayers $19 million to clean up because of corporate guarantees.| Photo Credit: GBRW A corporate guarantee is a promise made by a mining company not to go bankrupt and to close and clean up a mine. This promise is made in lieu of a bond. While the federal government has banned corporate guarantees and requires bonds, Nevada still allows up to 75 percent of a mine's reclamation costs to be satisfied by a corporate guarantee. If the company goes bankrupt, taxpayers foot the bill for cleanup.
In 2000 alone, Nevada had 10 companies declare bankruptcy at 29 sites. Nevada taxpayers are also holding the bag for $450 million in uninsured, currently operating mines.
Arimetco Corp., which owned the Paradise Peak mine and the Yerington mine, abandoned the sites after the company declared bankruptcy. The total clean-up cost of Arimetco's Paradise Peak Mine will probably exceed $20 million. While Arimetco had a $4.5 million bond at Paradise Peak, only $1.2 million was in a form that could be collected. The rest was what is now a worthless corporate guarantee.
At Yerington, the site may be put on the National Priority List for Superfund protection, as the uranium and related radioactivity issues have been linked to severe health impacts for local residents.
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