Rosemont Copper paid the Forest Service about $551,000 to cover its costs stemming from a wildfire started three years ago by one of the mining company’s employees.
The money, paid June 6, covers the service’s costs for fighting the fire east of the Santa Rita Mountains, emergency rehabilitation work, and the value of natural resources damaged, said a settlement agreement signed by the company and the Forest Service.
But an insurer for a contractor for a second, related mining company, Wildcat Silver, is challenging the Forest Service’s $380,000 bill to cover costs for fighting a second wildfire that burned the same month. That fire burned in the Patagonia Mountains and was caused by a Wildcat contractor’s employee, Forest Service records show.
“The Forest Service has an obligation to prove that its bill is reasonable with respect to the damage it claims was caused by our insured. We believe they have not done so,” said Neal Scharmer, general counsel for United Fire Group, the Iowa-based parent company of the insurer for the Wildcat Silver contractor.
The Star used the federal Freedom of Information Act to obtain documents about the two fires and their aftermaths. The Forest Service withheld 234 pages of records concerning its dealings with the Wildcat Silver contractor, citing an exemption to the act it says allows it to do that.
The two fires occurred in May 2011. The Greaterville Fire burned 1,826 acres south of the proposed Rosemont Mine site. The Wildcat Fire burned 398 acres within a larger area where Wildcat Silver’s subsidiary, Arizona Minerals Inc., proposes to conduct drilling to determine the extent of silver deposits.
The blazes started on private land owned by the mining companies and spread to Forest Service land.
Rosemont Copper’s parent company, Augusta Resource Corp., and Wildcat Silver were founded by Richard Warke, who is also Augusta’s board chairman. They have the same address in Vancouver, British Columbia. Augusta President and CEO Gil Clausen sits on Wildcat Silver’s board of directors. The two companies have two vice presidents in common.
Rosemont and the Wildcat contractor received notices from the Forest Service the same month, August 2013, that their payments were due. In January 2014, the Forest Service wrote Wildcat contractor DM Excavation and Engineering, its employee Nathaniel Mershon and its insurance company, Financial Pacific Insurance Co., reminding them that the bill is still owed.
The Greaterville Fire started when a spark flew from metal tabs that a ranch hand was welding in the bed of a truck owned by Rosemont Ranch. The mining company runs cattle on the 30,000-acre ranch.
Last February, Southwestern Regional Forester Calvin Joyner wrote the Star that the Forest Service had received no response from Rosemont Copper since it got the original bill. Recently, Raquel Cantu, a Forest Service Freedom of Information Act officer in Albuquerque, said that Joyner had erred and should have said that the service had received no payment from Rosemont Copper.
The company had responded in September 2013, when its attorney wrote the Forest Service, requesting documentation of its firefighting costs, records show.
In the Wildcat Fire, DM Excavation and Engineering employee Mershon told federal investigators that the fire started as he was welding an excavator bucket, said Forest Service letters to Mershon and Brent Bowdon, DM’s president.
While the bucket was being ground, one or more sparks caused by the grinder flew up and landed on the ground, igniting surrounding grass and bush, the Forest Service letter quotes Mershon as saying.
Scharmer, the attorney for insurer United Fire Group, Financial Pacific’s parent company, declined to detail the company’s disagreement with the Forest Service, saying: “It’s not our practice to defend our insured in the media.
“I think the appropriate response is that we believe they need to continue to further document the relationship of claimed expenses to the alleged damage,” he said.
These fires show it’s not a good idea to have heavy industry in national forests, said Nancy Freeman, a Green Valley activist who opposes Rosemont.
“It doesn’t matter that they are paying for the damages. We don’t want our forests destroyed,” Freeman said.
Coronado National Forest Supervisor Jim Upchurch responded that U.S. mining laws allow citizens and companies to obtain property rights to certain minerals on Forest Service lands, and it’s the service’s responsibility to ensure that the rights are exercised in a responsible and safe manner.
“In the case of wildland fires, we investigate and hold individuals or companies accountable where negligence or intent can be shown,” Upchurch said. “We do not want anyone’s actions to cause a wildfire, and we work diligently to educate, enforce and impose restrictions to minimize any fire occurrences that are not planned.”