Phelps Dodge Corporation, the state of New Mexico and environmentalists remain locked in a conflict over the cleanup of an open-pit copper mine in southern New Mexico.

In March, the New Mexico Environment Department approved a draft permit for the Chino Mine near Silver City, the fourth-largest copper mine in the country, with a suggested bond of $390 million. According to the 1993 New Mexico Mining Act, hard-rock mining companies must post bonds to cover cleanup costs in the event they go bankrupt (HCN, 12/3/01: A struggling mountain town looks for a lift).

Silver City-based Gila Resources Information Project has already appealed the Chino permit, saying the plan is too lenient. According to the group’s director, Harry Browne, the plan would allow the company to remove only some of the contaminants from water at the site, diluting the rest with fresh groundwater. “Dilution is not the solution to pollution,” says Browne.

The permit will gain final approval once the water-quality plan has passed muster with the state and the company has guaranteed a bond. But Phelps Dodge, the nation’s largest producer of copper and molybdenum, hopes to avoid posting bonds at all, and has lobbied for state legislation that would allow it to offer a third-party guarantee — money offered by the company on behalf of its subsidiaries — instead of a bond. According to Phelps spokesman Richard Peterson, large surety bonds haven’t been available since September 11, 2001. “The bonds cannot be obtained under any circumstances anywhere on Planet Earth,” says Peterson.