Asarco LLC, owner of the Globe Plant in Denver, filed for bankruptcy protection Wednesday, leaving the funding for several environmental cleanup projects throughout the region at risk.
Asarco has placed enough money in a trust fund to support federally supervised cleanup efforts this year and potentially beyond, regulators contend.
But the cleanup of the Globe Plant site north of Interstate 70 and east of Interstate 25 is under state supervision and outside that trust fund, leaving it vulnerable.
The Globe Plant started as a smelter in 1886, processing gold, silver, copper and lead from area mines. The smelter gave the nearby Globeville neighborhood its name, as well as lead and arsenic contamination.
Other Asarco projects in Colorado include cleanup of the California Gulch area near Leadville and soil removal around the old Omaha-Grant smelter near I-70 and Brighton Boulevard. Those are covered under the trust fund.
“Using trust fund money, Asarco will spend more than $18 million in 2005 on cleanups throughout the United States,” said U.S. Environmental Protection Agency press secretary Eryn Witcher. “We do not anticipate that Asarco’s declaration of bankruptcy will affect this.”
The trust fund, however, generates a fraction of the money needed to tackle a long list of cleanup projects linked to the company, said EPA attorney Suzanne Bohan.
The federal government agreed in 2003 to refrain from suing the company for three years. But the feds planned to go after Asarco early next year for more funds, Bohan said.
Asarco, which estimates environmental liabilities that could exceed $1 billion, cited pressure from that pending litigation among its motivations for the bankruptcy filing.
“Global settlement of our historical environmental liability has not been possible, leaving Asarco without legal or economic certainty,” Asarco chief executive Daniel Tellechea said in a statement.”
Cleanup of the Globe Plant, which is being done under a consent decree with the state, is funded out of Asarco’s current budget.
The bankruptcy filing will force Colorado to line up with other creditors.
“Our hope and expectation is that Asarco will comply with their obligations under the consent degree,” said Howard Roitman, director of environmental programs with the Colorado Department of Public Health and Environment.
Asarco has finished the highest-priority projects, removing lead and arsenic-contaminated topsoil from more than 650 homes and 70 acres of commercial property in the surrounding Globeville neighborhood, according to the EPA.
A $10 million remediation of the plant’s water-retention pond remains unfinished, not to mention the cleanup of soils on the 89-acre plant site.
If the bankruptcy court doesn’t consider the remaining Globe Plant cleanup a priority, federal authorities might have to step in and use limited government funds.
Last year, Asarco agreed to clean up soil around 100 homes in the Vasquez Boulevard/I-70 Superfund site, contaminated primarily by the long-gone Omaha-Grant smelter.
One concern is whether creditors could go after the assets in the trust fund, but Bohan said it appears the fund is protected.
Grupo Mexico, a Mexican natural-resources company, purchased Asarco in 1999 for $2.2 billion. A subsidiary, Americas Mining Corp., which isn’t part of the bankruptcy filing, placed a $100 million promissory note into the trust fund to back cleanup efforts, Bohan said.
A strike by 1,500 copper miners in Arizona and Texas and mounting asbestos and environmental liabilities pushed Asarco over the edge, the company said.
Tucson-based Asarco employs about a dozen people at its Globe Plant, which produces high-purity alloys and specialty metals for advanced electronics.
Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.
