1997-02-13_REVISION - M1977493 (7)

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t • CMC and AMAX Inc. management. • A determination was made b CMC in 1987 that no additional expansion of the then current facilities would occur in the future. In other words, those areas "affected" (as defined by Rule 1.1 [4]) in 1987 would constitute full build-out of the Climax facilities. No additional acreage would be affected by the operation. In early 1988, CMC and AMAX Inc. determined that the Permit should be amended to reduce the affected acreage only to those areas actually affected by Climax facilities. Site maps and aerial photographs were reviewed and ground-truthed in order to eliminate every possible acre not directly affected by the operation. This. reduction amounted to approximately 8600 acres. Following an adequacy review by DGM staff, the Board approved the amendment in late 1989. The total affected land approved by the Board was 3372 acres of which 3144 acres required financial warranty; the remainder being water bodies. The total financial warranty was reduced to approximately $18.6 million, thus saving Climax approximately $100,000 per year. This reduction in activity at the site and reduction in associated affected land persisted through the late 1980s and early 1990s. The permitted tailing facilities and waste rock dumps and associated ancillary facilities were adequate to allow for sporadic short-term production from the open pit. In addition, limited reclamation activities were able to proceed during this period without any overlap onto adjacent unaffected and unpermitted land. However, this situation • began to change in 1994. In November 1993, AMAX Inc. merged with Cyprus Minerals Company to become Cyprus Amax Minerals Company (Cyprus Amax). The Climax Molybdenum Company retained its corporate identity under management of Cyprus Climax Metals Company (Cyprus Climax), a wholly owned unit of Cyprus Amax. While many of the former Climax and CMC employees were retained during the merger, upper management at both Cyprus Amax and Cyprus Climax predominantly were from the former Cyprus organization. Hence, philosophical changes in corporate management and attitude dictated operational changes at Climax. Among other specifics, Cyprus Climax determined to increase the extent of facility closure, reclamation, and maintenance activities. Closure and clean-up of the historic (ca. 1965) oxide tailing deposition area was initiated in 1993 in order to provide a clean water storage reservoir for purchase by Vail Associates, Inc. This site, renamed "Eagle Park Reservoir", has undergone extensive soil and sediment removal and is in the final stages of reclamation. In undertaking the normal course of field modifications to a project of this size and scope, CMC found itself constricted by the affected area boundaries established by 5 1?