UNITED STATES DISTRICT COURT DISTRICT OF MONTANA MISSOULA DIVISION
UNITED STATES OF AMERICA and STATE OF MONTANA, Plaintiffs,
consolidated with STATE OF NEVADA and STATE OF WEST VIRGINIA, Co-Plaintiffs,
v.
TORCHLIGHT MINING CORP.; TORCHLIGHT MINING (U.S.) INC.; TORCHLIGHT SPECIALTY CHEMICALS, INC.; RIDGECREST MINE HOLDINGS, LLC; and BONANZA CREEK MINING, LLC, Defendants.
Civil Action No. 9:24-cv-00087-DWM
Hon. Donald W. Molloy, Senior U.S. District Judge (by designation)
RESPONSE OF THE UNITED STATES TO PUBLIC COMMENTS ON THE PROPOSED CONSENT DECREE
April 2, 2025
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I. INTRODUCTION
The United States of America, by and through the undersigned attorneys acting on behalf of the United States Department of Justice, Environment and Natural Resources Division ("ENRD"), and the United States Environmental Protection Agency ("EPA"), hereby files this Response to Public Comments on the Proposed Consent Decree ("Response") in the above-captioned action. The proposed Consent Decree (the "Decree" or "Consent Decree") was lodged with this Court on February 19, 2025, in accordance with the requirements of 28 U.S.C. § 7003(d) and the Department of Justice's policy regarding the lodging and entry of consent decrees in environmental enforcement actions.
Lead counsel for the United States in this matter is Philip Orenstein, Trial Attorney, Environmental Enforcement Section, ENRD, U.S. Department of Justice, supervised by Katherine Rowe-Halpern, Senior Counsel, Environmental Enforcement Section. The lead EPA case attorney is Margaret Coulson, Office of Enforcement and Compliance Assurance ("OECA"), U.S. Environmental Protection Agency.
The co-plaintiffs in this consolidated action are the State of Montana, acting through its Department of Environmental Quality, represented by Annika Hedstrom, Assistant Attorney General; the State of Nevada, acting through its Division of Environmental Protection, represented by Ricardo Fuentes, Deputy Attorney General; and the State of West Virginia, acting through its Department of Environmental Protection, represented by Loretta May Hatcher, Assistant Attorney General. The three states are joined as co-plaintiffs to address state-law claims arising from the same courses of conduct that form the basis of the federal enforcement action.
The defendants in this action are: Torchlight Mining Corp. ("TMC"), a corporation organized under the Canada Business Corporations Act, dual-listed on the Toronto Stock Exchange (TSX: TRC) and the New York Stock Exchange (NYSE: TRC), with its corporate headquarters located at 1800 Bayfield Tower, 401 Bay Street, Toronto, Ontario M5H 2Y4, Canada, and its United States headquarters located at 750 Copper Ridge Blvd., Suite 200, Helena, Montana 59601; Torchlight Mining (U.S.) Inc. ("TMC-US"), a corporation organized under the laws of the State of Delaware and a wholly-owned subsidiary of TMC; Torchlight Specialty Chemicals, Inc. ("TSC"), a corporation organized under the laws of the State of Delaware and a wholly-owned subsidiary of TMC-US; Ridgecrest Mine Holdings, LLC ("Ridgecrest"), a Montana limited liability company and an indirect subsidiary of TMC; and Bonanza Creek Mining, LLC ("Bonanza Creek"), a Nevada limited liability company and an indirect subsidiary of TMC (collectively, the "Torchlight Defendants" or "Defendants").
On February 19, 2025, the United States published notice of the lodging of the proposed Consent Decree in the Federal Register, thereby opening a thirty (30)-day public comment period in accordance with 28 U.S.C. § 7003(d). The comment period closed on March 21, 2025. During the comment period, the United States received twenty-three (23) written public comments from a range of commenters, including individual community members and residents near the four affected sites, environmental advocacy organizations, local government entities, industry associations, and academic and scientific commenters. Each comment has been reviewed and considered by the United States.
The purpose of this Response is to address the substantive comments received and to demonstrate to the Court that the proposed Consent Decree is fair, reasonable, adequate, and consistent with the objectives of the Clean Water Act ("CWA"), 33 U.S.C. §§ 1251 et seq.; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901 et seq.; and the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601 et seq. As set forth below, the United States respectfully submits that the Consent Decree satisfies the applicable legal standard for entry and that no comment received during the public comment period provides a basis for rejecting or modifying the Decree as lodged.
The applicable legal standard for entry of a consent decree in an environmental enforcement action is well established. A consent decree must be fair, adequate, reasonable, and consistent with the statutory objectives that the litigation was designed to advance. See United States v. Cannons Eng'g Corp., 899 F.2d 79, 84 (1st Cir. 1990); United States v. Charles George Trucking, Inc., 34 F.3d 1081, 1084 (1st Cir. 1994); United States v. Montrose Chem. Corp., 50 F.3d 741, 747 (9th Cir. 1995). The court's role in reviewing a proposed consent decree is not to determine whether the decree represents the best possible outcome, but rather to satisfy itself that the decree falls within the "range of reasonableness." Cannons Eng'g Corp., 899 F.2d at 84. Courts afford considerable deference to the judgment of the executive branch in evaluating the terms of environmental enforcement settlements, recognizing that the government is in the best position to weigh the complex technical, legal, and policy considerations that inform such agreements. Id. at 85; see also United States v. Akzo Coatings of Am., Inc., 949 F.2d 1409, 1426 (6th Cir. 1991). The Supreme Court has recognized that "[c]onsent decrees are normally compromises in which the parties give up something they might have won in litigation and receive something they might have lost." United States v. Armour & Co., 402 U.S. 673, 681 (1971). A consent decree "must be examined in light of its purposes," and a court should not reject a proposed consent decree simply because the court might have structured the relief differently. Id.
As demonstrated in the following sections, the proposed Consent Decree satisfies each element of this standard.
II. BACKGROUND OF THE ENFORCEMENT ACTION AND CONSENT DECREE
A. The Enforcement Action
On January 18, 2024, the United States filed its Complaint in this Court, initiating Civil Action No. 9:24-cv-00087-DWM, and alleging violations of the Clean Water Act § 301, 33 U.S.C. § 1311; the Resource Conservation and Recovery Act §§ 3004 and 3005, 42 U.S.C. §§ 6924, 6925; and the Comprehensive Environmental Response, Compensation, and Liability Act § 107, 42 U.S.C. § 9607, at four facilities operated or formerly operated by the Torchlight Defendants across the States of Montana, Nevada, and West Virginia. The States of Montana, Nevada, and West Virginia subsequently joined as co-plaintiffs, asserting parallel state-law claims.
The Torchlight Defendants, through counsel, filed their Answer on March 5, 2024, generally denying liability while admitting certain jurisdictional and factual allegations. On April 22, 2024, the parties entered into a Tolling Agreement, which tolled the running of all applicable statutes of limitations through December 31, 2025, in order to facilitate settlement discussions without prejudice to either party's litigation position.
On May 15, 2024, the Court referred the matter for mediation before the Honorable Clara Finnegan, United States Magistrate Judge. Two mediation sessions were conducted on June 10, 2024, and July 15, 2024. Through the mediation process and subsequent direct negotiations between the parties, the United States and the Torchlight Defendants reached an agreement in principle on the core terms of a settlement on July 30, 2024.
Following the agreement in principle, the parties engaged in extensive negotiations over the specific terms of the consent decree text from approximately November 2024 through February 2025. These negotiations addressed, among other things, the scope and timing of remedial obligations at each of the four sites, the amount and allocation of the civil penalty, financial assurance requirements, supplemental environmental project commitments, independent monitoring provisions, and dispute resolution procedures. The Consent Decree text was substantially finalized on February 3, 2025, following which the parties obtained the necessary internal approvals and executed the Decree.
The execution version of the proposed Consent Decree was lodged with the Court on February 19, 2025, simultaneously with publication of notice in the Federal Register.
B. The Four Sites
The enforcement action encompasses four facilities located in three states. Each facility presents distinct environmental challenges and remediation requirements. The following subsections describe the location, operational history, principal contaminants, alleged violations, and negotiated remediation costs for each site.
1. Ridgecrest Copper-Molybdenum Mine (Drummond, Montana)
The Ridgecrest Copper-Molybdenum Mine ("Ridgecrest" or "Ridgecrest Mine") is located at 14200 Ridgecrest Mine Road, Drummond, Granite County, Montana 59832. The mine occupies an approximately 3,200-acre mine footprint within a total controlled property area of approximately 8,700 acres. The Ridgecrest Mine is an open-pit copper-molybdenum mine that has been operational since 1978 and was operated by Ridgecrest Mine Holdings, LLC, an indirect subsidiary of Torchlight Mining Corp. Active mining operations at Ridgecrest ceased on December 31, 2019, and the facility is currently in a closure and reclamation phase. The site has been proposed for listing on the National Priorities List ("NPL") under CERCLA and is currently being addressed under an Administrative Order on Consent, Docket No. CERCLA-08-2022-0039, which was executed on September 15, 2022. The EPA Project Coordinator for the Ridgecrest site is Dr. Samuel Tesfaye of EPA Region 8.
The principal contaminants at the Ridgecrest site are associated with acid mine drainage ("AMD") generated by the oxidation of sulfide-bearing mine waste and exposed pit walls. Dissolved copper concentrations in AMD-impacted waters average approximately 47 mg/L, which dramatically exceeds the Montana chronic aquatic life standard for copper of 0.0087 mg/L — a factor of approximately 5,400 times above the applicable standard. Molybdenum concentrations average approximately 1.2 mg/L, selenium concentrations average approximately 0.082 mg/L, and sulfate concentrations average approximately 3,400 mg/L. In addition, the Ridgecrest Mine includes a 425-acre tailings impoundment with documented seepage to Flint Creek, a tributary of the Clark Fork River, which supports populations of native westslope cutthroat trout and bull trout, both species of conservation concern.
The United States alleged violations of the CWA § 301 (unpermitted discharges of pollutants to waters of the United States from AMD sources); RCRA § 3004 (mismanagement of hazardous waste generated by the solvent-extraction/electrowinning ("SX/EW") circuit, which produced copper cathode from leach solutions); and CERCLA § 107 (cost recovery for $14.3 million in EPA removal actions conducted between 2021 and 2023 to address imminent and substantial endangerments at the site).
The negotiated remediation cost for the Ridgecrest site is $198.6 million over a thirty (30)-year period, which represents a net present value of approximately $134.9 million at a three percent (3%) discount rate. This negotiated figure represents a compromise between Torchlight's remediation cost estimate of $187.5 million, prepared by its consultant Pinnacle Creek Environmental, LLC, and EPA's remediation cost estimate of $224.0 million, prepared by Cascade Geosciences, Inc. The $198.6 million figure includes contingency allowances and addresses all identified operable units at the site.
2. Gallatin Chemical Works (Belgrade, Montana)
The Gallatin Chemical Works ("Gallatin" or "GCW") is located at 8800 Industrial Park Lane, Belgrade, Gallatin County, Montana 59714, and occupies approximately 145 acres. The facility manufactures specialty chemicals used in mineral processing, including flotation reagents, sodium xanthate, and dithiophosphate collectors. The facility has been operational since 1993 and is currently active, operated by Torchlight Specialty Chemicals, Inc. The Gallatin Chemical Works is a RCRA Corrective Action facility operating under Permit No. MTD098712456.
The principal contaminants at the Gallatin site include carbon disulfide ("CS₂") in groundwater, with maximum detected concentrations of 890 µg/L compared to the applicable maximum contaminant level ("MCL") of 10 µg/L — approximately 89 times the MCL. Xanthate decomposition products, volatile organic compounds (including toluene and xylene) in subsurface soils, and three identified Solid Waste Management Units ("SWMUs") contribute to the contamination profile at this facility.
The United States alleged violations of RCRA §§ 3004 and 3005 (unpermitted hazardous-waste storage and failure to perform corrective action at identified SWMUs) and CWA § 301 (fourteen Montana Pollutant Discharge Elimination System ("MPDES") permit effluent limit exceedances for CS₂ and total suspended solids ("TSS") between January 2021 and June 2024).
The estimated remediation cost for the Gallatin site is $42.8 million over a fifteen (15)-year period, representing a net present value of approximately $34.1 million at a three percent (3%) discount rate.
3. Bonanza Creek Gold Mine (Lander County, Nevada)
The Bonanza Creek Gold Mine ("Bonanza Creek") is located along County Road 447 at Mile Marker 12, Lander County, Nevada 89820. The mine occupies an approximately 5,600-acre mine footprint within a total controlled property area of approximately 12,400 acres. Bonanza Creek is an open-pit heap-leach gold mine that has been operational since 2001 and continues active mining operations, operated by Bonanza Creek Mining, LLC, an indirect subsidiary of Torchlight Mining Corp. The EPA Project Coordinator for the Bonanza Creek site is Jennifer Whitfield of EPA Region 9.
The principal contaminants at the Bonanza Creek site include weak acid dissociable ("WAD") cyanide at concentrations of 0.62 mg/L compared to the applicable discharge limit of 0.022 mg/L, mercury at average concentrations of 12.4 µg/L compared to the applicable criterion of 0.77 µg/L, and selenium in pit-lake water. The contamination at this site is associated with the heap-leach gold extraction process, which utilizes dilute cyanide solutions to leach gold from ore placed on engineered leach pads.
The United States alleged violations of CWA § 301 (three unpermitted discharges from a torn heap-leach liner to a tributary of the Reese River, occurring on March 17, 2022; August 9, 2022; and January 22, 2023); RCRA § 3004 (management of spent heap-leach ore as hazardous waste); and the Migratory Bird Treaty Act ("MBTA"), 16 U.S.C. §§ 703–712, based on seventeen (17) documented avian mortalities at the facility's solution ponds between 2021 and 2023.
The estimated remediation cost for the Bonanza Creek site is $63.2 million over a twenty (20)-year period, representing a net present value of approximately $47.1 million at a three percent (3%) discount rate.
4. Kanawha Bend Chemical Plant (Institute, West Virginia)
The Kanawha Bend Chemical Plant ("Kanawha Bend") is located at 2200 Chemical Valley Road, Institute, Kanawha County, West Virginia 25112, and occupies approximately 78 acres. The facility manufactures leaching agents and operates a sulfuric acid regeneration process. The facility has been operational since 1985 and is currently active, operated by Torchlight Specialty Chemicals, Inc. The Kanawha Bend facility is a RCRA Corrective Action facility operating under Permit No. WVD048823915.
The principal contaminants at the Kanawha Bend site include sulfuric acid residuals (with measured pH levels as low as 1.8); heavy metals, including lead at maximum concentrations of 4,200 mg/kg and arsenic at maximum concentrations of 890 mg/kg in soils near a former waste lagoon; and dense non-aqueous phase liquid ("DNAPL") consisting of chlorinated solvents present in the underlying fractured bedrock aquifer. The contamination at this site reflects a legacy of chemical manufacturing and waste management operations dating back nearly four decades.
The United States alleged violations of RCRA §§ 3004 and 3005 (failure to properly close a former surface impoundment and unpermitted treatment of listed hazardous wastes K062 and D002) and CERCLA § 107 (cost recovery for $3.8 million in EPA emergency response actions conducted in June 2020 following an uncontrolled release of sulfuric acid to a tributary of the Kanawha River).
The estimated remediation cost for the Kanawha Bend site is $38.9 million over a twenty (20)-year period, representing a net present value of approximately $29.0 million at a three percent (3%) discount rate.
C. Summary of Consent Decree Terms
The proposed Consent Decree imposes comprehensive obligations on the Torchlight Defendants, encompassing remediation, civil penalties, past-costs reimbursement, supplemental environmental projects, independent monitoring, and financial assurance. The principal terms are summarized below.
Remediation Obligations. The total nominal remediation obligation under the Decree is $343.5 million, allocated as follows: $198.6 million for the Ridgecrest site (over 30 years); $42.8 million for the Gallatin site (over 15 years); $63.2 million for the Bonanza Creek site (over 20 years); and $38.9 million for the Kanawha Bend site (over 20 years). The total remediation obligation in net present value terms, using a discount rate of three percent (3%), is approximately $245.1 million ($134.9 million + $34.1 million + $47.1 million + $29.0 million).
Civil Penalty. The Decree requires payment of a total civil penalty of $31.5 million, allocated by site as follows: $14.2 million (Ridgecrest); $5.8 million (Gallatin); $7.9 million (Bonanza Creek); and $3.6 million (Kanawha Bend). The penalty is payable in four equal quarterly installments of $7.875 million each: the first installment within thirty (30) days of the entry of the Decree, and subsequent installments at twelve (12), twenty-four (24), and thirty-six (36) months following entry.
EPA Past-Costs Reimbursement. Pursuant to CERCLA § 107, the Decree requires the Torchlight Defendants to reimburse EPA for past response costs totaling $18.1 million: $14.3 million for removal actions conducted at the Ridgecrest site between 2021 and 2023, and $3.8 million for the emergency response at the Kanawha Bend site in June 2020.
Supplemental Environmental Projects. The Decree requires the Torchlight Defendants to fund and implement three Supplemental Environmental Projects ("SEPs") with a combined value of $12.0 million:
(a) Flint Creek Watershed Restoration Project (Montana) — $5.5 million — stream-bank stabilization, riparian replanting, and fish-passage improvements along approximately twelve (12) miles of Flint Creek in Granite County, Montana, to address ecological harm associated with AMD impacts from the Ridgecrest site.
(b) Battle Mountain Community Drinking Water Improvement Project (Nevada) — $3.5 million — upgrade of the municipal water treatment facility in Battle Mountain, Lander County, Nevada, to improve drinking water quality for residents in the community adjacent to the Bonanza Creek Mine.
(c) Institute Community Air Quality Monitoring Network (West Virginia) — $3.0 million — installation and ten (10)-year operation of six ambient air quality monitoring stations in the Institute and South Charleston area of Kanawha County, West Virginia, to monitor air quality conditions in communities adjacent to the Kanawha Bend facility.
Independent Monitor. The Decree provides for the appointment of Verdant Analytics, Inc. (Dr. Kamal Osei, Senior Managing Director; Portland, Oregon) as a court-appointed independent auditor and environmental monitor. The monitor will perform quarterly compliance audits and issue annual public reports assessing the Defendants' compliance with all Decree obligations. The estimated cost of the independent monitoring program is $4.8 million over five (5) years (approximately $960,000 per year), borne entirely by the Defendants.
Financial Assurance. The Decree requires the Torchlight Defendants to establish and maintain financial assurance in the aggregate amount of $245.0 million, consisting of two instruments: (1) a surety bond in the amount of $165.0 million issued by Ironbark Surety of America, Inc., Bond No. ISA-ENV-2025-08934; and (2) a remediation trust fund in the amount of $80.0 million held by Larchfield Trust Company, N.A., a national banking association, under Trust Agreement No. LTC-REM-2025-1177. The financial assurance is subject to annual adjustment to ensure adequacy as remedy costs are updated.
Stipulated Penalties. The Decree imposes stipulated penalties for noncompliance: $1,500 per day per violation for the first thirty (30) days of noncompliance; $3,000 per day per violation for days thirty-one (31) through sixty (60); and $5,500 per day per violation thereafter.
Force Majeure. The Decree contains a standard EPA force majeure provision, requiring the Defendants to provide written notice to EPA within fifteen (15) days of any event claimed as force majeure.
Dispute Resolution. The Decree establishes a three-tier dispute resolution mechanism: (1) informal negotiation for a period of thirty (30) days; (2) formal EPA decision within thirty (30) days following the close of informal negotiation; and (3) judicial review by this Court upon petition filed within thirty (30) days of EPA's formal decision.
Termination. The Decree provides for site-by-site termination upon certification by both EPA and the independent monitor that all remedial obligations at the relevant site have been completed, with a mandatory minimum period of five (5) years following the completion of all remedial construction before termination is available. Post-termination responsibilities under existing RCRA permits and applicable institutional controls survive decree termination.
Grand Total Estimated Obligation. The grand total estimated financial obligation imposed on the Torchlight Defendants under the Decree is approximately $409.9 million in nominal terms, consisting of $343.5 million in remediation costs, $31.5 million in civil penalties, $18.1 million in past-costs reimbursement, $12.0 million in SEPs, and $4.8 million in independent monitoring costs.
D. Legal Standard for Entry
As noted above, the applicable legal standard for entry of a consent decree in an environmental enforcement action under the CWA, RCRA, and CERCLA requires that the decree be: (1) fair; (2) reasonable; (3) adequate; and (4) consistent with the statutory objectives of the environmental statutes at issue. See United States v. Cannons Eng'g Corp., 899 F.2d 79, 84 (1st Cir. 1990); United States v. Charles George Trucking, Inc., 34 F.3d 1081, 1084 (1st Cir. 1994).
The court's role in evaluating a proposed consent decree is not to determine whether the decree is the best possible resolution of the claims, nor whether the court itself might have crafted different terms. Rather, the court is to satisfy itself that the proposed decree "springs from and serves the public interest." Cannons Eng'g Corp., 899 F.2d at 84. Courts have consistently recognized that a consent decree need not achieve every objective the government might pursue at trial; it need only represent a reasonable resolution that falls within the range of outcomes the parties might have achieved through continued litigation. See United States v. Montrose Chem. Corp., 50 F.3d 741, 747 (9th Cir. 1995).
Particular deference is owed to the judgment of the executive branch in evaluating environmental enforcement settlements. The Department of Justice and EPA possess specialized expertise in assessing the technical, legal, and policy considerations that bear on the appropriate resolution of complex environmental enforcement actions. Courts should not "become combatants in, rather than neutral arbiters of, technical disagreements" between the government and private parties. Cannons Eng'g Corp., 899 F.2d at 84. This deference reflects the constitutional allocation of prosecutorial discretion to the executive branch. See Heckler v. Chaney, 470 U.S. 821 (1985).
As demonstrated in the following sections, the proposed Consent Decree fully satisfies this standard.
III. SUMMARY OF PUBLIC COMMENTS RECEIVED
Pursuant to 28 U.S.C. § 7003(d), notice of the proposed Consent Decree was published in the Federal Register on February 19, 2025. The public comment period remained open for thirty (30) days and closed on March 21, 2025. The United States received a total of twenty-three (23) written comments during the comment period. Each comment has been reviewed and considered in its entirety by the undersigned counsel and by EPA's Office of Enforcement and Compliance Assurance.
The commenters may be categorized as follows:
• Local community members and residents near affected sites (9 comments): Individual residents of Granite County, Montana (near the Ridgecrest site); Belgrade, Montana (near the Gallatin site); Battle Mountain and the surrounding Lander County area, Nevada (near the Bonanza Creek site); and Institute and South Charleston, West Virginia (near the Kanawha Bend site) submitted comments expressing a range of concerns about the adequacy of the remediation obligations, the civil penalty, water quality protection, and community health impacts.
• Environmental advocacy organizations (6 comments): Comments were received from the Clark Fork Coalition, Montana Trout Unlimited, Great Basin Resource Watch, the Kanawha Valley Environmental Justice Alliance, the National Mining Association (opposing certain provisions), and the Western Environmental Law Center. These comments addressed topics including the adequacy of the penalty, the scope of remediation obligations, wildlife protection at the Bonanza Creek site, and the sufficiency of the SEPs.
• Local government entities (4 comments): The Granite County Board of Commissioners, the Lander County Board of Commissioners, the Kanawha County Commission, and the City of Belgrade each submitted comments addressing local concerns regarding remediation timelines, community benefits, and ongoing environmental impacts.
• Industry commenters (2 comments): The National Mining Association and the Montana Mining Association submitted comments raising concerns about the precedential effect of certain penalty and financial assurance provisions on the broader mining and natural resources industry.
• Academic and scientific commenters (2 comments): Dr. Eleanor Marsh, Professor of Environmental Engineering at the University of Montana, and Dr. Ramesh Subramanian, Assistant Professor of Hydrogeology at the University of Nevada, Reno, submitted technical comments addressing the adequacy of the proposed remediation technologies and monitoring protocols.
The United States has organized the substantive comments into the following thematic categories for the purpose of providing an organized response:
1. Adequacy of the civil penalty ($31.5 million);
2. Sufficiency of the remediation obligations and timelines;
3. Financial assurance and Torchlight's ability to pay;
4. Supplemental Environmental Projects — scope and community benefit;
5. Independent monitoring and public transparency;
6. Migratory Bird Treaty Act and wildlife protection at Bonanza Creek;
7. Water quality and community health concerns; and
8. Termination provisions and long-term stewardship.
Each of these thematic categories is addressed in turn in Section IV below. The United States notes that several individual comments addressed multiple topics; such comments are addressed under each relevant thematic heading.
IV. RESPONSE TO PUBLIC COMMENTS
A. Comments Regarding the Adequacy of the Civil Penalty ($31.5 Million)
Summary of Comments. Several commenters argued that the $31.5 million civil penalty is inadequate given the severity and duration of the environmental violations at four sites across three states and given the substantial financial resources of Torchlight Mining Corp. Multiple commenters noted TMC's fiscal year 2023 revenue of approximately C$4.82 billion (approximately US$3.56 billion), EBITDA of approximately C$1.14 billion (approximately US$843 million), and market capitalization of approximately C$7.6 billion, and argued that the penalty should be significantly higher to serve the deterrent purpose of the CWA, RCRA, and CERCLA. The Clark Fork Coalition characterized the penalty as "a fraction of a single quarter's earnings for a company of Torchlight's size" and argued that it fails to create an adequate disincentive for future violations. The Kanawha Valley Environmental Justice Alliance asserted that the penalty should be at least $75 million to reflect the gravity of the harm to surrounding communities.
Response. The United States respectfully submits that the $31.5 million civil penalty is fair, reasonable, and consistent with the statutory objectives of the CWA, RCRA, and CERCLA. The penalty was calculated in accordance with EPA's Civil Penalty Policy for Section 301 of the Clean Water Act (1995), EPA's RCRA Civil Penalty Policy (2003), and the general principles for penalty calculation set forth in the Policy on Civil Penalties (1984), which the Department of Justice has adopted for use in environmental enforcement actions. Each of these policies requires that a civil penalty be calculated by reference to two principal components: a gravity-based component reflecting the seriousness of the violations, and an economic-benefit component reflecting the financial advantage gained by the violator through noncompliance. Adjustment factors are then applied to account for the violator's degree of cooperation, good faith efforts toward compliance, and ability to pay.
The $31.5 million penalty is allocated among the four sites as follows, reflecting the number, duration, and severity of the violations at each facility:
The Ridgecrest allocation of $14.2 million reflects the site's particularly severe and long-standing CWA violations, including chronic unpermitted discharges of acid mine drainage containing dissolved copper at concentrations approximately 5,400 times the applicable state aquatic life standard. The Bonanza Creek allocation of $7.9 million reflects the seriousness of the three documented unpermitted discharges from a torn heap-leach liner, the RCRA violations related to spent heap-leach ore management, and the MBTA violations resulting in seventeen avian mortalities. The Gallatin allocation of $5.8 million reflects fourteen MPDES permit exceedances and the RCRA corrective action violations. The Kanawha Bend allocation of $3.6 million reflects the RCRA violations at that facility.
Moreover, the civil penalty must be viewed in context. The $31.5 million penalty does not represent the totality of the financial consequences imposed on the Torchlight Defendants under the Consent Decree. Rather, the penalty is complemented by $343.5 million in remediation obligations, $18.1 million in past-costs reimbursement to EPA, and $12.0 million in supplemental environmental projects. The grand total financial obligation imposed under the Decree is approximately $409.9 million. This figure substantially exceeds the penalties and total obligations imposed in comparable consent decrees in the mining and chemical manufacturing sectors. See, e.g., United States v. Freeport-McMoRan Inc., No. 3:13-cv-01002 (D.N.M. 2014) ($175 million total obligation); United States v. Coeur Mining, Inc., No. 2:15-cv-00534 (D. Nev. 2016) ($98 million total obligation).
The penalty payment schedule — four equal quarterly installments of $7.875 million each, payable over thirty-six (36) months — ensures prompt and certain payment of the full penalty amount while preserving the Defendants' financial capacity to fund the extensive remediation obligations required by the Decree. This structured payment approach is consistent with standard DOJ practice in cases involving substantial concurrent remediation obligations. See U.S. Dep't of Justice, ENRD, Policy on Structured Penalty Payments in Environmental Enforcement Actions (2009).
For these reasons, the United States submits that the $31.5 million civil penalty is within the range of reasonableness and fully consistent with the objectives of the CWA, RCRA, and CERCLA.
B. Comments Regarding the Sufficiency of Remediation Obligations and Timelines
Summary of Comments. Multiple commenters expressed concern about the remediation timelines established in the Consent Decree, with particular focus on the thirty (30)-year remediation timeline for the Ridgecrest Copper-Molybdenum Mine. The Granite County Board of Commissioners urged that remediation at Ridgecrest should be completed within fifteen to twenty years, rather than thirty years, to reduce the ongoing environmental and economic impacts on the county. Similarly, the Clark Fork Coalition and Montana Trout Unlimited argued that the extended timeline for Ridgecrest unnecessarily prolongs the harm to Flint Creek and the Clark Fork River watershed. Several commenters also argued that remediation at the Gallatin, Bonanza Creek, and Kanawha Bend sites should proceed more quickly than proposed.
In addition, some commenters argued that the negotiated Ridgecrest remediation cost of $198.6 million is insufficient and should be closer to EPA's estimate of $224.0 million. Dr. Eleanor Marsh of the University of Montana noted that the $25.4 million differential between EPA's estimate and the negotiated figure could affect the scope or quality of remediation, particularly with respect to long-term AMD treatment and tailings impoundment management.
Response. The United States has carefully considered these comments and respectfully submits that the remediation obligations and timelines set forth in the Consent Decree are technically sound, appropriate to the complexity of the environmental challenges at each site, and consistent with comparable consent decrees involving large-scale mine site remediation.
Ridgecrest Timeline. The thirty (30)-year remediation timeline for the Ridgecrest site reflects the inherent technical complexity of acid mine drainage remediation at a 3,200-acre open-pit copper-molybdenum mine with a 425-acre tailings impoundment. AMD is generated through the oxidation of sulfide-bearing minerals — primarily pyrite (FeS₂), chalcopyrite (CuFeS₂), and molybdenite (MoS₂) — when these minerals are exposed to air and water in the mine environment. AMD generation is an ongoing geochemical process that cannot be instantaneously halted; rather, it must be managed over an extended period through a combination of source control measures (e.g., cover systems, regrading, water management) and active treatment technologies (e.g., lime precipitation, constructed wetlands, sulfate-reducing bioreactors). The thirty-year timeline accounts for the period required for source control measures to reduce AMD generation rates, for active treatment to reduce contaminant loads to acceptable levels, and for long-term monitoring to confirm that environmental conditions are stable and protective.
The Ridgecrest timeline is consistent with remediation timelines at comparable large-scale mine sites across the western United States. For example, the Superfund cleanup at the Anaconda Smelter Site in Deer Lodge County, Montana, has been ongoing since 1983 — more than forty years — and active remediation continues. The Cobalt Ridge Services Inc. Mine Superfund Site in Shasta County, California, has required perpetual treatment of AMD since the 1960s. The Berkeley Pit in Butte, Montana, has been subject to continuous management since mining cessation in 1982. These precedents underscore that thirty years is a reasonable and, if anything, ambitious timeframe for a site of Ridgecrest's scale and complexity.
Negotiated Remediation Cost. The negotiated Ridgecrest remediation cost of $198.6 million represents a carefully considered compromise between the cost estimates prepared by the parties' respective technical experts. Torchlight's consultant, Pinnacle Creek Environmental, LLC (Dr. Astrid Bergmann, P.E.), estimated the total remediation cost at $187.5 million, while EPA's expert, Cascade Geosciences, Inc. (Dr. Patricia Voss, Ph.D., Hydrogeology), estimated the cost at $224.0 million. The $36.5 million differential between these estimates reflected different assumptions regarding, among other things, the duration of active water treatment, the unit costs for cover system construction, the extent of regrading required at waste rock dumps, and the contingency percentage applied to the overall estimate.
The negotiated figure of $198.6 million was developed through extensive technical discussions between the parties' experts and reflects a careful balancing of these competing assumptions. Critically, the $198.6 million figure includes appropriate contingency allowances and addresses all identified operable units at the Ridgecrest site, including the open pit, waste rock dumps, tailings impoundment, Bramwell Group and treatment systems, and affected surface water and groundwater. The Consent Decree further provides for an annual adjustment mechanism to ensure that the financial assurance remains adequate as remedy costs are updated based on actual field conditions and updated cost estimates. If actual remediation costs exceed the negotiated estimate, the Defendants remain obligated to complete the remedy regardless of cost, and the financial assurance will be adjusted accordingly.
Other Site Timelines. The remediation timelines for the remaining three sites are similarly appropriate to the technical challenges presented at each facility:
• Gallatin Chemical Works: The Corrective Measures Study is due by June 14, 2026, followed by $42.8 million in remediation over fifteen (15) years. This timeline reflects the need to characterize and address carbon disulfide contamination in groundwater (at concentrations up to 89 times the MCL), remediate three SWMUs, and achieve compliance with RCRA corrective action requirements.
• Bonanza Creek Gold Mine: Heap-leach liner repair is to commence by June 14, 2026, with $63.2 million in remediation over twenty (20) years. The timeline accounts for the engineering complexity of repairing an active heap-leach facility, installing containment system upgrades, managing WAD cyanide and mercury contamination, and implementing wildlife protection measures at solution ponds.
• Kanawha Bend Chemical Plant: Interim stabilization measures are required by December 14, 2026, with $38.9 million in remediation over twenty (20) years. The extended timeline reflects the particularly challenging conditions at this site, including DNAPL in fractured bedrock — a contaminant condition that is widely recognized as among the most difficult to remediate in environmental practice — and sulfuric acid residuals requiring careful management.
Key Milestones and Enforcement. The Consent Decree establishes enforceable milestones with specific deadlines for each site. Key milestones include the Ridgecrest Remedial Action Work Plan, due December 14, 2025; commencement of remedy construction at Ridgecrest by June 14, 2027; and the end of the thirty-year Ridgecrest remediation obligation on June 14, 2055. These milestones are subject to stipulated penalties for noncompliance ($1,500 per day for the first thirty days; $3,000 per day for days thirty-one through sixty; $5,500 per day thereafter), providing a strong financial incentive for the Defendants to meet all deadlines. The independent monitor (Verdant Analytics, Inc.) will verify compliance with all milestone obligations through quarterly audits.
For these reasons, the United States submits that the remediation obligations and timelines are reasonable, technically sound, and consistent with the objectives of the CWA, RCRA, and CERCLA.
C. Comments Regarding Financial Assurance and Torchlight's Ability to Pay
Summary of Comments. Several commenters questioned whether the $245.0 million in financial assurance required by the Consent Decree is adequate to cover the full remediation obligation of $343.5 million in nominal terms, noting an approximately $98.5 million gap between the financial assurance amount and the nominal remediation cost. The Western Environmental Law Center described this gap as a "structural inadequacy" that could leave taxpayers responsible for remediation costs if Torchlight defaults on its obligations. The Granite County Board of Commissioners expressed concern that if Torchlight experiences financial difficulties — noting the cyclical nature of the mining industry and the volatility of copper and gold prices — the financial assurance might prove insufficient to complete remediation.
Additionally, some commenters examined TMC's financial statements and observed that the company's environmental reserve of approximately C$340.0 million (approximately US$251.4 million) as reported in its most recent annual filings is less than the grand total obligation of $409.9 million, suggesting an apparent shortfall of approximately US$158.5 million. These commenters argued that the financial assurance should be increased to at least $343.5 million to match the full nominal remediation cost.
Response. The United States has carefully considered these comments and respectfully submits that the financial assurance package required by the Consent Decree is adequate, appropriate, and consistent with established EPA and DOJ methodology for sizing financial assurance in environmental consent decrees.
Net Present Value Methodology. The $245.0 million financial assurance figure is keyed to the net present value ("NPV") of the total remediation obligation, calculated at a discount rate of three percent (3%). The total remediation obligation in NPV terms is approximately $245.1 million. The use of NPV to size financial assurance is the standard methodology employed under both RCRA (40 C.F.R. § 264.142) and CERCLA, and reflects the fundamental principle that funds set aside today will earn a return over time, such that a present value of $245 million is sufficient to fund $343.5 million in remediation expenditures spread over periods of fifteen to thirty years. This approach has been consistently upheld and applied in federal environmental consent decrees. See, e.g., United States v. ASARCO LLC, No. 4:14-cv-00022 (D. Idaho 2014) (financial assurance sized to NPV of remediation obligation); United States v. Teck Cominco Metals, Ltd., No. 2:08-cv-01432 (E.D. Wash. 2011) (same).
Dual-Instrument Structure. The financial assurance consists of two complementary instruments that together provide robust protection for the United States and affected communities:
(1) A surety bond in the amount of $165.0 million issued by Ironbark Surety of America, Inc. (Bond No. ISA-ENV-2025-08934). Ironbark Surety is a financially sound surety company licensed in all fifty states and the District of Columbia, with a current Best's Financial Strength Rating of A+ (Superior) from A.M. Best Company. The surety bond is irrevocable and may be drawn upon by EPA in the event of a Torchlight default, providing immediate access to funds for remediation.
(2) A remediation trust fund in the amount of $80.0 million held by Larchfield Trust Company, N.A. (Trust Agreement No. LTC-REM-2025-1177), a national banking association chartered under the laws of the United States with fiduciary obligations. The trust fund is segregated from Torchlight's general corporate assets and is exclusively dedicated to funding remediation obligations under the Consent Decree. Larchfield Trust Company, N.A. serves as an independent trustee, further ensuring the security and availability of these funds.
Torchlight's Financial Capacity. Although financial assurance instruments are designed to provide security independent of the obligor's financial condition, the United States notes that Torchlight Mining Corp. is a substantial multinational mining and chemical company with significant financial resources. TMC reported fiscal year 2023 revenue of approximately C$4.82 billion (approximately US$3.56 billion), EBITDA of approximately C$1.14 billion (approximately US$843 million), and consolidated net tangible assets of approximately C$3.92 billion. In addition, TMC maintains an existing C$750.0 million revolving credit facility, with Harborstone National Bank, N.A. serving as administrative agent, which provides substantial additional liquidity.
The environmental reserve of approximately C$340.0 million (approximately US$251.4 million) reported in TMC's financial statements represents the company's current accounting provision for environmental obligations across its global portfolio, which includes operations beyond the four sites at issue in this action. The environmental reserve is not the sole source of funding for Torchlight's Consent Decree obligations; rather, remediation expenditures will be funded from TMC's overall operating cash flow, which has averaged approximately C$950.0 million per year over the past three fiscal years. The grand total Decree obligation of $409.9 million, spread over periods of fifteen to thirty years, represents annual expenditures that are well within TMC's demonstrated financial capacity.
Annual Adjustment Mechanism. The Consent Decree includes an annual adjustment mechanism that requires the Defendants to update the financial assurance amount based on revised cost estimates submitted to EPA. If actual or projected remediation costs increase, the financial assurance must be increased correspondingly. This mechanism ensures that the financial assurance remains adequate throughout the life of the Decree, providing an additional safeguard against the possibility that initial cost estimates may prove insufficient.
For these reasons, the United States submits that the financial assurance provisions of the Consent Decree are adequate and reasonable.
D. Comments Regarding Supplemental Environmental Projects (SEPs)
Summary of Comments. The three SEPs generated substantial public interest, and the comments received were generally supportive of the projects while raising specific concerns about funding levels, implementation timelines, and community engagement.
Commenters from Granite County, Montana, including the Granite County Board of Commissioners and the Clark Fork Coalition, praised the Flint Creek Watershed Restoration Project ($5.5 million) as a valuable complement to the Ridgecrest site remediation. However, these commenters argued that the $5.5 million allocation is insufficient given the full extent of AMD impacts along Flint Creek, noting that Flint Creek has been listed as impaired for metals on Montana's 303(d) list since 2006 and that the watershed has experienced ecological degradation for decades. The Clark Fork Coalition estimated that full watershed restoration could cost $15 to $20 million and urged the United States to increase the SEP funding.
Residents of Battle Mountain, Nevada, and the surrounding Lander County area expressed strong support for the Community Drinking Water Improvement Project ($3.5 million). The Lander County Board of Commissioners noted that Battle Mountain's municipal water treatment facility has been operating at or near capacity and is in need of significant upgrades. Commenters asked for assurances that the facility upgrade would be completed within a specific timeframe and that the project would be coordinated with local water authorities.
Community members from Institute and South Charleston, West Virginia, including representatives of the Kanawha Valley Environmental Justice Alliance, supported the Air Quality Monitoring Network ($3.0 million for six monitoring stations over ten years). These commenters noted that the Institute and South Charleston communities have long experienced elevated levels of air pollution from the concentration of chemical manufacturing facilities in the Kanawha Valley — commonly known as "Chemical Valley" — and argued that the monitoring data should be made publicly available in real time to enable community members to make informed decisions about outdoor activities and health precautions. The Kanawha Valley Environmental Justice Alliance further requested that at least one monitoring station be located in the historically African American neighborhood of Institute, which has borne a disproportionate share of environmental burdens.
Response. The United States has carefully considered these comments and respectfully submits that the three SEPs, with a combined value of $12.0 million, are appropriately scoped and designed to provide direct environmental and public health benefits to the communities most affected by the Torchlight Defendants' operations.
Flint Creek Watershed Restoration Project ($5.5 million). The Flint Creek project will fund stream-bank stabilization, riparian replanting, and fish-passage improvements along approximately twelve (12) miles of Flint Creek in Granite County, Montana. This project addresses ecological harm extending beyond the immediate boundaries of the Ridgecrest site and will complement — but is distinct from — the Ridgecrest site remediation itself. The $5.5 million allocation was determined through consultation among the United States, the State of Montana, and the Torchlight Defendants, taking into account EPA's SEP Policy (2015), which requires that a SEP have a nexus to the violations alleged in the complaint and provide environmental or public health benefits beyond those required by law. The United States acknowledges the commenters' observations regarding the broader cost of full Flint Creek watershed restoration but notes that the SEP is designed to address a discrete twelve-mile segment of the creek where AMD impacts are most acute and where restoration investments will yield the greatest ecological return. The SEP does not preclude additional restoration efforts by federal, state, or local agencies, and the Ridgecrest site remediation itself will independently reduce AMD loading to Flint Creek over the thirty-year remediation period.
Battle Mountain Community Drinking Water Improvement Project ($3.5 million). The Battle Mountain project will fund the upgrade of the municipal water treatment facility in Battle Mountain, Lander County, Nevada. The project will be subject to specific milestone deadlines set forth in Appendix G to the Consent Decree (SEP Compliance and Reporting Schedule), including deadlines for engineering design completion, contractor procurement, construction commencement, and final commissioning. The United States anticipates that the project will be coordinated with the Lander County Water and Sewer District and other local authorities to ensure consistency with existing water infrastructure plans and to maximize the community benefit of the investment. The $3.5 million allocation is based on the estimated cost of the upgrades necessary to address the specific water quality concerns identified in consultation with the State of Nevada.
Institute Community Air Quality Monitoring Network ($3.0 million). The Institute air quality monitoring network will consist of six ambient air quality monitoring stations installed in the Institute and South Charleston area of Kanawha County, West Virginia. The monitoring stations will be operational for a minimum of ten (10) years, with ongoing operation and maintenance costs included in the $3.0 million budget. The United States confirms that the monitoring data will be made publicly accessible through EPA's AirNow system and/or other online platforms, enabling community members to access near-real-time air quality information. The specific locations of the six monitoring stations will be determined in consultation with EPA Region 3, the West Virginia Department of Environmental Protection, and community representatives, and the United States takes note of the Kanawha Valley Environmental Justice Alliance's request that at least one station be located in the Institute neighborhood. The Consent Decree provides EPA with discretion to approve the final station siting plan, and the United States will give careful consideration to environmental justice principles in evaluating the proposed siting.
Reporting and Oversight. All three SEPs are subject to the same reporting requirements and compliance standards as other Decree obligations. The Torchlight Defendants are required to submit periodic progress reports to EPA on SEP implementation, and the independent monitor (Verdant Analytics, Inc.) will include SEP compliance in its quarterly audit program and annual public reports. Stipulated penalties apply to failures to meet SEP milestones and reporting obligations.
E. Comments Regarding Independent Monitoring and Public Transparency
Summary of Comments. Several commenters expressed support for the appointment of an independent environmental monitor, characterizing it as a positive and important feature of the Consent Decree. However, some commenters questioned the qualifications and independence of the selected entity, Verdant Analytics, Inc. One commenter inquired whether Verdant has any prior business relationships with Torchlight Mining Corp. or its affiliates that might compromise its independence. Other commenters requested that the monitor's reports be made publicly available and readily accessible to affected communities, and that the monitor have explicit authority to recommend additional remedial actions if monitoring reveals that the Decree's remediation objectives are not being achieved.
Response. The United States has carefully considered these comments and provides the following response.
Selection and Qualifications. Verdant Analytics, Inc. (Dr. Kamal Osei, Senior Managing Director; Portland, Oregon) was selected through a rigorous, multi-step qualification process agreed upon by both the United States and the Torchlight Defendants. The selection process involved the identification and evaluation of multiple candidate firms based on criteria including: demonstrated expertise in environmental compliance auditing and monitoring; experience with large-scale mine site remediation, chemical facility corrective action, and RCRA/CERCLA compliance programs; technical staff qualifications; organizational capacity; geographic reach; and absence of conflicts of interest. Verdant is an Oregon corporation with more than fifteen years of experience in environmental compliance auditing, and Dr. Osei has served as an independent environmental monitor in three prior federal consent decrees. As part of the selection process, Verdant disclosed all prior and current engagements involving Torchlight Mining Corp. and its affiliates. No disqualifying conflicts of interest were identified.
Independence. Verdant Analytics will serve as a court-appointed monitor, appointed pursuant to and under the authority of this Court's order entering the Consent Decree. This court appointment ensures that Verdant's primary accountability is to the Court, not to either the United States or the Torchlight Defendants. The Consent Decree includes provisions expressly prohibiting Verdant from accepting any engagement from the Torchlight Defendants during the term of the monitoring appointment and for a period of two (2) years following termination, further safeguarding the monitor's independence.
Reporting and Public Access. The monitor will perform quarterly compliance audits at each of the four sites and will prepare comprehensive annual reports summarizing the Defendants' compliance status, any identified deficiencies, corrective measures taken, and the monitor's overall assessment of remediation progress. These annual reports will be filed with the Court and will be publicly available through the Court's electronic case filing system (CM/ECF), accessible via PACER. In addition, the United States intends to make the annual reports available on the Environmental Enforcement Section's website and through EPA's enforcement action database (ECHO). These measures will ensure that affected communities and members of the public have timely access to comprehensive information about compliance with the Decree.
Authority to Recommend Corrective Measures. The monitor's mandate under the Consent Decree includes the authority to identify violations of Decree provisions and to recommend corrective measures to EPA and to the Court. While the monitor does not have independent authority to order the Defendants to take remedial actions — that authority rests with EPA and the Court — the monitor's recommendations carry significant weight in the Decree's dispute resolution process and in EPA's assessment of compliance. If the monitor identifies a deficiency that the Defendants fail to address, EPA retains full authority to invoke the stipulated penalty provisions and the dispute resolution procedures of the Decree, and to seek judicial enforcement as necessary.
Cost. The estimated cost of the independent monitoring program is $4.8 million over five (5) years, approximately $960,000 per year. This cost is borne entirely by the Torchlight Defendants and is not paid from the remediation trust fund or other financial assurance instruments. The monitoring budget covers the costs of quarterly site inspections, sampling verification, data analysis, report preparation, and administrative functions.
F. Comments Regarding Migratory Bird Treaty Act and Wildlife Protection at Bonanza Creek
Summary of Comments. Wildlife advocacy organizations, including Great Basin Resource Watch, submitted detailed comments regarding the seventeen (17) documented avian mortalities at the Bonanza Creek Gold Mine's solution ponds between 2021 and 2023. The documented mortalities included migratory waterfowl, shorebirds, and raptors. Commenters argued that the Consent Decree does not adequately address the MBTA violations and urged that the Decree include specific requirements for bird-deterrent measures, including netting over all solution ponds, acoustic and visual hazing systems, and ongoing wildlife monitoring programs with mandatory reporting to the U.S. Fish and Wildlife Service ("USFWS"). Some commenters argued that the MBTA violations should be subject to separate criminal prosecution.
Response. The United States has carefully considered these comments and respectfully submits that the Consent Decree addresses the MBTA concerns in a comprehensive and appropriate manner.
The Consent Decree includes, as part of the Bonanza Creek remediation obligations, a detailed Liner Repair and Containment Plan that encompasses specific provisions for the protection of avian and other wildlife at the facility. These provisions include:
(a) Installation of bird-deterrent netting over all active solution ponds, including the pregnant solution pond, barren solution pond, and overflow containment ponds, to physically prevent avian contact with cyanide-bearing solutions.
(b) Deployment of acoustic and visual hazing systems — including propane cannons, predator-eye balloons, and reflective deterrents — along the perimeters of heap-leach pads and solution conveyance channels where netting is not techn