Cotter Corporation NSL Cañon City, Colorado

By TRACY HARMON | tharmon@chieftain.com | 0 comments

CANON CITY — Cotter Corp. and the state health department are nearly $20 million apart in agreeing on the amount of a financial assurance warranty to cover eventual closure of the uranium mill site just south of Canon City.

The uranium mill processed ''yellowcake'' uranium from 1958 to 1987. In 1988, the mill was identified by the Environmental Protection Agency as a Superfund cleanup site.

State regulations require a decommissioningplan that gives a cost estimate for closing the mill. Cotter and state officials have been working since 2009 to try to pin down an updated cost estimate.

Following review of the state's estimate, Cotter officials agreed to increase the current surety from $14.7 million to $20.8 million by July 2011.

The $6 million increase will go toward covering increased costs relating to Cotter's work to demolish parts of the old mill that Cotter no longer plans to use.

Current work is focusing on removal of tanks, excavation of soil under the tanks and at ore storage sites, placement of the first cover layer over the secondary impoundment and future demolition projects.

Although Cotter is removing the old mill buildings and equipment, company officials still are considering whether to build a new mill. Cotter Corp. continues to be a licensed mill, but has been inactive since 2005.

"We have been doing lots of operational studies to see if we can get back into operation. The old equipment needs to be disposed of so we can build an all-new mill," Cotter Mill Manager John Hamrick said last month.

The state and Cotter have further delved into trying to estimate total cost of demolition, excavation of soils, groundwater remediation and reclamation of the entire mill site at some point in the future under requirements of both the mill's license and the Remedial Action Plan that is part of the Superfund cleanup process.

Cotter has estimated the total cost to be $23.2 million and the state estimates the cost to be $42.8 million, a difference of about $19.6 million.

Cotter officials "provided a well-researched and earnest estimate of what they believe the financial assurance warranty should be," state officials came up with a much higher number, according to a draft decommissioning funding plan released Wednesday. "The department believes a few key areas are under-valued and has proposed the higher limits," according to the draft plan.

Specifically, state health officials said they believe the volume of soil to be cleaned up will be much higher. In addition, state officials believe the scope of groundwater cleanup will change due to a new contamination plume discovered in 2008 under the neighboring Shadow Hills Golf Course.

State officials also point out that the time needed to dewater and close the site will take longer than Cotter officials estimate.

"The department acknowledges that a significant uncertainty exists in these estimates. By their nature, financial assurance estimates should be conservative, however, they should also be realistic," according to the draft plan.

Now state health officials want the public to weigh in on the plan as well.

"Public comments are requested by Nov. 24," said Steve Tarlton, manager of the state's radiation control program. "Following consideration of the public comments, a final decommissioning funding plan will be completed."

The draft decommissioning funding plan can be viewed at http://www.cdphe.state.co.us/hm/cotter/index.htm. Public comment will be accepted through Nov. 24.

Comments should be faxed to 303-759-05355 or mailed to Steve Tarlton, manager, Radiation Control Program, Colorado Department of Public Health, 4300 S. Cherry Creek Dr., Denver, CO 80246-1530. E-mail comments also can be sent to steve.tarlton@state.co.us