Navajo Nation Could Get Millions To Resolve Environmental Liabilities
By Kathy Helms
WINDOW ROCK – Tronox Inc., created through a spin-off from Kerr-McGee Corp., has agreed to resolve its environmental liabilities for $270 million cash and 88 percent of Tronox’s interest in a pending litigation. If approved, the Navajo Nation stands to get a minimum of $14.5 million for cleanup of abandoned uranium mines.
The U.S. Environmental Protection Agency, the U.S. Justice Department and the U.S. Attorney for the Southern District of New York announced the bankruptcy settlement Nov. 23. Under terms of the settlement, EPA will be reimbursed for past cleanup costs and future cleanups at contaminated sites across the country. Claimants include 22 states and a number of municipalities.
“It's a very good deal for the Navajo Nation. I'm excited about it,” said David Taylor of Navajo Department of Justice.
Under terms of the agreement U.S. EPA would receive $1,263,956 for cleanup at Quivira Churchrock Mine, and $12,039,562 for uranium mine sites in or near Navajo Nation territory. The Navajo Nation would receive $1,231,978 for the Shirprock Uranium Mill Tailings Remedial Action site, where contaminated groundwater is an ongoing problem.
The majority of the former Kerr-McGee mines are in the Cove area, with the remainder in the vicinity of Ambrosia Lake.
Tronox and 14 of its affiliates filed for Chapter 11 on Jan. 12, 2009, in the U.S. Bankruptcy Court for the Southern District of New York. Several months after the Tronox spin-off was completed, Anardarko Petroleum Corp. purchased Kerr-McGee for $18 billion.
Tronox is currently involved in litigation against Anadarko and Kerr-McGee over allegations that those companies imposed years worth of legacy liabilities, including environmental obligations on Tronox, leaving the company insolvent and under-capitalized. The trial is expected to begin in late 2011 or early 2012. Eighty-eight percent of any settlement awarded to Tronox as a result of that litigation will be used to fund additional cleanup efforts.
The settlement calls for a 30-day comment period. “Assuming that there are no huge problems in the public comment period, then approximately $14.5 million should be available in a matter of months,” Taylor said. But the most important part of the settlement, as far as he's concerned, is the assignment of an interest in the litigation that Tronox has against Kerr-McGee and Anadarko.
“It's all speculative as to how much that would be, but we're potentially talking about a lot of money in addition to the $14.5 million. We get 23 percent of whatever that settlement is. It's a good day for Navajo,” Taylor said.
Stephen B. Etsitty, executive director of Navajo EPA, said the Navajo Nation is following the lead of the federal government and will be issuing a 30-day public notice for comment on its particular part of the settlement. Kerr-McGee is the potentially responsible party in multiple sites on the Navajo Nation, notably in the Northern Agency and the Eastern Agency, he said.
“U.S. EPA will receive most of the settlement dollars for numerous sites on the Navajo Nation where Kerr-McGee was a responsible party, but that amount will be specifically designated to assist with the cleanup of those sites on the Navajo Nation,” he said.
“There were about 40 sites initially, and then we found that about a handful of them actually were not on the Navajo Nation but just outside the Navajo Nation boundaries in New Mexico. We're still concerned about those as well,” he said.
Etsitty applauded Taylor for his work on behalf of Navajo. “Dave Taylor's not even a bankruptcy lawyer, but at least he got our foot in the door.”
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