Arizona Daily Star reports Rosemont stiffed Forest Service on $514,000 bill for starting 2011 wildfire that charred 1,826 acres

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Rosemont Copper Company has failed to pay a $514,000 bill owed to the U.S. Forest Service since last August for expenses related to a 2011 wildfire started by one of its employees, the Arizona Daily Star reported Sunday.

The unpaid bill comes as Augusta Resource faces a continuing cash crisis. The company has been forced to borrow $10 million from its chairman, Richard W. Warke, and largest individual shareholder, Ross Beaty. Augusta is relying on borrowed funds to finance permitting and other activities, including a $109 million loan from RK Mine Finance, a London-based metals hedge fund, that comes due in July.

The wildfire burned about 1,826 acres on public and private land after the ranch hand’s welding activity sent a spark onto grassland that ignited the blaze, the Daily Star reported.

After a lengthy investigation, the Forest Service demanded the $514,000 payment on Aug. 31, 2013, in letters to the mining company and the ranch hand, Eric Pavolka, the newspaper said.

Rosemont, according to documents obtained by the Daily Star under the Federal Freedom of Information Act, had not responded to the bill as of Jan. 31, according to the story.

In letters last August to Rosemont CEO Rod Pace and to Pavolka, the Forest Service wrote that to avoid having to pay interest, having the debt reported to credit bureaus or having a collection agency called, the company or Pavolka must within 30 days pay the debt in full, agree to a payment plan or document that they are in a bankruptcy proceeding that would place the debt on hold, the newspaper reports.

Rosemont is a subsidiary of Vancouver, B.C. Augusta Resource Corporation and Augusta’s only significant asset. Rosemont is seeking state and federal permits to construct a mile-wide, half-mile deep copper mine on the northeastern flank of the Santa Rita Mountains on the Coronado National Forest southeast of Tucson.

The outstanding unpaid bill also comes at the same time the Coronado National Forest has released the Final Environmental Impact Statement and draft Record of Decision for Rosemont’s proposed open-pit copper mine in the Santa Rita Mountains.

A coalition of ranchers, environmentalists, business owners and citizens filed extensive formal objections to the FEIS last week. Pima County also filed objections to the FEIS. The Forest Service must respond in writing to each objection within 75 days.

Many of the objections assert that the Forest Service has issued the FEIS in violation of the National Environmental Policy Act because the Forest Service knows the project will violate state and federal laws to protect the air and water.

The Forest Service’s August 2013 letters to Rosemont CEO Rod Pace and Pavolka said that Pavolka and the owners of Rosemont Ranch are “jointly and severally liable for the full amount of this debt,” because the government doesn’t attempt to allocate each party’s share, the Daily Star reported.

Pavolka’s actions also violated a federal law prohibiting actions causing “timber, trees, slash, brush or grass to burn except as authorized by permit,” said the August 2013 Forest Service letter from Lisa Lux, branch chief for the service’s claims office, the newspaper stated.

On May 3, 2012, Pavolka apparently signed a plea agreement in which he agreed to pay a $100 fine and a $10 special assessment on the charge of the federal law violation. He was placed on five years’ probation, the Daily Star reported.

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4 Responses to Arizona Daily Star reports Rosemont stiffed Forest Service on $514,000 bill for starting 2011 wildfire that charred 1,826 acres

  1. ALAN JOHNSON says:

    ARE THERE NO LAW ENFORCEMENT AGENCIES IN ARIZONA PREPARED TO STAND UP TO AUGUSTA AND TO HOLD THEM ACCOUNTABLE WHEN THEY , AND/OR THEIR EMPLOYEES/ASSOCIATES /ETC , VIOLATE ESTABLISHED RULES AND REGULATIONS RELATED TO THEIR ROSEMONT PROPERTY ? IT IS A SAD STATE OF AFFAIRS WHEN A COMPANY FACING A FINANCIAL CRISIS IS ALLOWED TO SIMPLY IGNORE THE MESS IT HAS CREATED . WHEN ” CARPET BAGGERS ” COME INTO TOWN BEWARE OF WHAT THEY LEAVE WITH AND MORE IMPORTANT , WHAT THEY LEAVE BEHIND . AUGUSTA HAS BALL MILLS STORED SOMEWHERE , READY TO INSTALL AS AND WHEN THE TIME COMES . THE FOREST SERVICE COULD TAKE OUT A LIEN AGAINST THIS EQUIPMENT PENDING THE PAYMENT OF THE $514’000 RELATED TO THE WILDFIRE INCIDENT .

  2. Thomas Stewart says:

    Good Golly Mr Allan Johnson This Sounds Like The Obama Liberal Kangeroo Court With The Arizona Daily Star Jury?? However The Cost Or Cause Of This Fire Is Difficult To Charge Rosemont Mine When You Have Never Approved The Request For Rosemont Mine To Own Or Operate This Operation. Plus The Charge And Cost Is So Far Out Of Line For Clearing Brush Fire $514,000 You Should Add The Obama Trillion Dollars Flat Tax!! Give The Owners Of Rosemont Mines The Permits To Open And Run This Business And This Act Of God Wildfire Incident Would Never Happen. However As Stated In Your Cause For A Fire Could Be A Dropped Cigarette ?? However Like Most Of The Federal Govt Workers Just Charge Someone Like Mr Pavolka $100 Fine? Yikeess, This Fire Was 2011 In A National Public Forrest In The Mountains That Have “Lightening Fires” Yearly And Without Anyone Working At The Mines Due To The Length Of Time To Get A Permit,(4 Years & Counting) These Things Can Happen In Any Forest!! So Maybe Mr Johnson If You Put As Much Effort Into Getting This Mine Up And Running, As You Have Done To Stop This 21st Century Minning Co, Lets Get These “Senseless Permits” Passed And Get This 21st Rosemont Mine Open For Business.

  3. Mr. Stewart,

    excellent attempt at trying to misdirect attention away from Rosemont and Augusta resource Corporation. It just wasn’t quite good enough, the central theme is the fact that Rosemont and Augusta feel they do not have to abide by the law. One of the primary reasons to deny a permit (yes that’s right deny) is when the organization exhibits disrespect for all of the local state and federal regulations.

    The cause of the fire was the cigarette the cause of the fire was not following regulations. Rosemont claims that they are a mining operation and if they are a mining operation in the should be under the MSHA laws and regulations. That’s the excuse they’ve used when they have ignored other permit requirements. If not MSHA then they should be under OSHA. The procedures are not carried under the grazing permit as Mr. pace tries to say.

    I took photographs of the fire source and as far as I could tell there was a water tank that was being welded on. I have a picture of the new weld on the tank. I’m picture of the fire source showing that spreading that spot.

    The central point is Rosemont and Augusta did not follow the law and when they got caught they simply ignored the penalty and pretended that it did not apply to them. I have news for you, if they do put in a mine it will probably be ran the same way.

    ADEQ has already said that it would probably be 2 years before they did an inspection on them.

  4. I let an incorrect statement in my last posting. It was not a cigarette, (NOT) . It appears to be where they welded on a water tank. I have photographs of the fresh weld and of the burn patterns originating at the tank