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Kennecott Hides Potential For Deadly Tailings Disaster in Magna, Utah


 

Read the Secret Memo

Magna, Utah  -  The Salt Lake Tribune is reporting that Kennecott Utah Copper Corp. has concealed, since 1988, the potential for an earthquake-caused major tailings disaster in Magna, Utah.  The tailings impoundment is located north of Magna and stores an estimated 1 billion tons of fine mine wastes.  In 1993, the company conducted a “risk assessment” to determine if full containment of the impoundment would be more expensive than legal costs associated with property damage and citizen deaths.  

 

The Tribune has published a 1997 confidential memo, written by Ray D. Gardner, former Chief Legal Officer for Kennecott, that is critical of the company’s handling of the potential tailings disaster:  “Prior management’s decisions to disregard and conceal legal advice, forego public notice, attempt to establish a residential buffer surreptitiously, collude with the State Engineer to withhold the KL studies from the public, and restrict the distribution of the Reduction Study, collectively and individually, give the appearance of a conspiracy to cover-up a profound threat to public safety.”

 

G. Frank Joklik was Kennecott’s president and CEO from 1980 to 1993.  Joklik, now a mining consultant, is currently on the board of directors for Prime Meridian Resources (PMR), a mining firm seeking to develop several metallic mineral deposits in the Upper Peninsula.  Prior to the 2002 Olympic Games, a bribery scandal forced Joklik to resign from the Salt Lake Organizing Committee, which was responsible for attempting to secure the games for the city of Salt Lake.  PMR has another Kennecott connection – the company’s president Michael Senn, was a Kennecott geologist from 1980 to 1996 and was Regional Manager/Chief Geologist when Kennecott discovered the Eagle deposit, in 1995.

The tailings pond, which opened in 1906, has had two previous failures (1941 and 1964) that reportedly did not result in loss of life or significant property damage and was not caused by seismic activity.  The 1997 memo notes that scientific reports were commissioned on the tailings impoundment in 1957, 1966, 1974 and 1983.  The reports noted the ability of the tailings impoundment to fail due to seismic activity.  The area lies within the Intermountain Seismic Belt and an earthquake in the vicinity, in 1962, measured M 5.2 on the Richter Scale.

According to the US Environmental Protection Agency (EPA), in 2006, Kennecott’s Utah Copper Mine and Power Plant was the second highest polluting facility in the nation with 102.5 million pounds of pollutants.  The company’s Green’s Creek Mine, in Alaska (recently sold to Hecla Mining Corp.), ranked 7th, with 44.5 million pounds of pollutants.

In 1988, Joklik commissioned an additional geotechnical evaluation of the tailings dam from a Canadian engineering firm, Klohn-Leonoff Consultants Ltd. (KL), from British Columbia, Canada.  KL’s report showed that an earthquake could cause the dam to burst, flooding part of the town of Magna, resulting in a loss of life and property damage.  According to Gardner’s 1997 memo, the report noted the potential danger to “inhabited areas, industrial sites, a major railroad line, and public highways.”  An industry expert, H. Bolton Seed, assessed and validated the findings, saying that “the annual risk of failure for the tailings deposit is [100 times greater] than for conventional dams.” 

 

Joklik responded to the report by unsuccessfully attempting to hide the results using the protection of attorney work product privilege and formed a task force to assess methods to stabilize the Magna Corner and other portions of the tailings impoundment.  A “Reduction Study,” commissioned from KL, in 1989, recommended the only solution was to construct an external berm around the entire tailings impoundment.  In response, Kennecott began dewatering the Magna Corner but abandoned “key elements of the seismic upgrade program” in 1993 due to economic costs associated with relocating 2.75 miles of State Route 201, the Magna Copper Golf Course, and all Kennecott and third party utilities in the area, and realigning and modifying the company’s process water facilities. 

 

Gardner’s 1997 memo suggests that the “decision to abandon the berm, buffer and dike components of the seismic upgrade is not well documented and seems to have been motivated by economics, with no genuine concern for public safety.”

 

Joklik and Philip J. Bernhisel (Kennecott’s Senior Vice President of Finance and Law) also requested a legal review from the former General Counsel, Earl Tingey, who commissioned an investigation from Bob Connery, of Holland and Hart LLP, Denver.  However, according to the Gardner memo, Joklik controlled Connery’s review and limited Tingey’s role to one of simply conveying information from Connery to Joklik.  Connery recommended that Kennecott disclose the threat to residents.  Connery was fired and informed that Joklik did not “like” his advice and to forward any relevant documents to Kennecott and destroy all copies.  Connery disregarded the advice.

 

Joklik secured a second legal opinion, from Parsons, Behle and Latimer (PB&L), from Salt Lake City, which recommended that Kennecott disclose the threat to the public and make the tailings impoundment safe by relocating State Route 201 and creating a buffer zone around the impoundment.  The consultant advised Kennecott that the impoundment was “unreasonably dangerous” and that the company faced the potential for punitive and criminal charges if the company did not warn the public.  Kennecott’s General Counsel instructed PB&L that Joklik would “terminate PB&L’s representation if their opinion was rendered to him, and he instructed PB&L to destroy the opinion.”

 

Following its dewatering activities, Kennecott commissioned another “seismic hazard evaluation” study from Woodward and Clyde, in 1993, to reassess the potential for a tailings breach in the Magna Corner of the impoundment.  Woodward and Clyde’s assessment showed an even higher risk potential than KL’s study. 

 

Gardner’s 1997 memo notes that “the possibility of stabilizing the Magna Corner exclusively through the dewatering effort appears to be a post-decision attempt to provide a supporting rationale, by identifying a viable method of protecting against the potentially devastating effects of a seismic failure.  Unfortunately, the dewatering option continues to be unproven.”

 

Kennecott officials met with the Utah State Engineer to discuss the original KL assessment.  According to minutes prepared by the company, the State Engineer approved of Kennecott’s full seismic upgrades and agreed with KL’s findings.  However, according to Gardner’s 1997 memo, “The minutes further indicate that the KL studies were shared with the State Engineer, but were not retained by the agency records because of concerns “that they would fall into the public domain.”  The State Engineer provided informal assurances that he had “no intention…of going public with the information.”  The project manager advises that the State Engineer has not retained copies of any of the geotechnical reports operated on behalf of Kennecott.”

 

Instead of pursuing a full seismic upgrade of the tailings impoundment, Joklik authorized Kennecott’s Land Department to secretly purchase 200 homes in Green Meadow Estates.  Officials in the department were not briefed on exact reasons for the purchasing.  From 1991 to 1992, the department purchased 39 homes, through a still-unidentified agent, which were subsequently leased.  The new tenants were never informed of the risks associated with a break in the tailings impoundment.  In 1995, Kennecott began pursuing options to sell the properties, without providing disclosure to buyers regarding tailings hazards.

 

Shockingly, in 1992, Kennecott’s parent company, Rio Tinto, conducted a “risk assessment” to determine the company’s potential liability in the event of a catastrophic dam break.  The company requested the Land Department to total the “approximate number of people involved…approximate spread of the population age (normal, young, aged) [sic]…approximate number of children and adults present at each school…approximate value placed on loss of life by Utah courts, with variation by age.”

 

Gardner’s 1997 memo concludes that “The lack of public notice is particularly puzzling.  Contrary to the unequivocal advice of two highly regarded law firms, Kennecott’s management did not provide the requisite warning because Mr. Joklik believed it would cause “panic and suits”…Kennecott has a legal and moral duty to disclose the risk and advise potentially affected persons of the company’s mitigation effort….The company decided human life was not worth the cost of completing the seismic upgrade in the manner most likely to yield an acceptable margin of safety.”

 

Despite Kennecott’s modification’s, over the past 20 years, the impoundment’s Magna Corner still fails to meet Utah’s minimum safety standard for a worst-case earthquake of M 7.2 on the Richter Scale.  Kennecott claims that final improvements will be finished in ten years.

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