An Interview with Frank Gardner Former President of Montana Resources and General Manager of the Berkeley Pit.

Interview with Frank Gardner

by Rayelynn Connole

 

The “Voices of the Watershed Series” features interviews and perspectives of various community leaders, citizens, technical advisors, and scientists who are willing to share their perspectives and opinions about the on-going restoration efforts throughout the Clark Fork Watershed.  The goal of this feature series is to include perspectives from multiple viewpoints and from various stakeholders.  As always, the Cfwep.Org program remains neutral and informational in our position regarding issues related to the restoration. The opinions and perspectives presented by the interviewees are reflective of that person and not necessarily those of Cfwep.Org or its partners. Our goal is to create an active and informed citizenry who are able to make decisions based upon scientific fact.  We believe that sharing multiple viewpoints regarding the restoration process is a means to achieving this goal.  We hope you enjoy the series! 

 

For this special edition of the Montana Steward, we are pleased to interview Frank Gardner about his recollections of the events leading up to turning off the pumps in the Kelley Mine shaft. Frank Gardner is the former president of Montana Resources and was the General Manager of the Berkeley Pit.

Pam Roberts, director of the film, Butte America, once commented to an audience of history teachers that, “everyone in Butte is an amateur historian.”  This sentiment rang true to my ears as there are multitudes of stories told about the day the pumps were turned off and the resultant filling of the Berkeley Pit.  These stories range from the clearly outrageous, “It was all a conspiracy!” to the very pragmatic, “Well, what were we going to do?  The mine was going to close.”  We elected to call upon Frank Gardner to gather his perspective about turning off the pumps and the eventual re-opening of the mine.   We are grateful to him for sharing his memories with us.

I was born and raised in Butte and worked in the mines throughout my life.  In 1974, I was the superintendent of the Berkeley Pit.  At that time there were many problems with the mining operations, including lack of profitability, labor conflicts, and a host of environmental issues. It seemed that there wasn’t much of a future for the mine.  I left Butte to work in Tehran, Iran at a copper and molybdenum mine.  My wife and I were there for three years, and in fact, my twin girls were born there.  I left Tehran, Iran to take a management position in Canada at another copper and molybdenum mine.

 

In 1979, Dan Rovig asked me to come back to Butte to manage the Berkeley Pit.  I was cautious because I wasn’t sure that I would have the authority to do the things I knew would be necessary to run the mine effectively and profitably.  The problems that were present prior to ARCO’s purchase of the Anaconda Company in 1977 were still present.  There continued to be lots of problems between management and labor.  Additionally, the environmental issues were pressing, power was quickly becoming more and more expensive, and taxation was heavy at the time.  I knew that if I were to return to run the mine, I would have to make some very difficult decisions, including layoffs, which of course are never easy.  After Mr. Rovig assured me I would have the authority to make the difficult decisions, I returned to Butte late in 1979 to the challenge of making this mine profitable.

 

One of the first studies we conducted was to determine if we could complete near-surface block caving at the Kelley mine.  ARCO eventually spent two years and millions of dollars to complete a feasibility study to determine if near-surface block caving would work in this area. In the case of the Kelley, the area was a honeycomb of shafts and stopes, which were supported by timbers.  In addition, as they mined the area, they used the cut-and-fill technique in which tailings are added to support the ground after the ores were removed.  In order to complete block caving, the miners would collapse an area and remove everything within a certain section, which of course, would include the old timbers, tailings (previously used as fill), waste rock and ores. To extract the ore from everything else was not economically feasible.  It was estimated that the area being proposed for block caving contained upwards of 15% timber.  There was also subsidence in that area, which of course, would have increased with additional block caving. The study ultimately proved that block caving was not possible in this area.

The next event that heavily impacted the mining operations was the closure of the Anaconda Smelter in September, 1980.  All of our copper concentrate was being shipped to Anaconda for smelting.  With the closure of the smelter, we no longer had a buyer for our concentrate.  The management of ARCO, who were located in Denver, entered into a contract with the Japanese to ship our concentrate to Japan for smelting.  However, the quality of the ores deep in the Berkeley Pit was not as high as earlier extractions.  It was considered a dirty concentrate due to high levels of arsenic and zinc. Other buyers didn’t want the concentrate at all, and the Anaconda option was no longer there.

 

In 1981, as a direct function of our lack of buyers for concentrate, we had to lay people off at the mine.  When I returned to Butte to work for the mine, there were 1,300 people employed in the mining and milling operations.  These were good people and good workers.  It is never easy to lay off people and at the time, relations between management and the workers were not good.  Wild cat strikes started to plague mining operations during this time. It was difficult to get both parties to come to a solution that would enable us to keep more people employed.

So now, we have a concentrate that is not saleable, and we need to identify higher quality areas in the mining district.  Coupled with these issues, copper prices were declining. It was the beginning of a perfect storm.  We started looking at new areas to mine, which incidentally, are the areas we are currently mining today.  The quality of the copper concentrate was excellent, and these areas had the bi-product credit of molybdenum (moly), which was profitable.  However, to develop this new area, would take money and time.

ARCO was spending $10 million per year to pump and treat water from the Kelley mine shafts. At this time, the environmental issues were also coming to the forefront.  The pH of the water coming from the shafts was between 2.0 and 3.0.  We were allowed to discharge that water to Silver Bow Creek as long as it was in range of 7 to 11 pH, which was accomplished by adding lime.  We knew that this standard would not last.  We knew that additional water treatment would be necessary, yet at this time, there was no design for a plant to remove the other contaminants.  The technology did not exist to treat large quantities of contaminated water.

 

One of the studies we conducted at this time was a groundwater study.  George Burns, Chief Geologist of the Butte Operations with the Anaconda Company, helped us to forecast what would happen if we were to stop pumping.  He determined the voids, direction of water flow, and how long it would take to fill the Berkeley.  The Berkeley is down gradient from the mine shafts that were filling and would serve as a sink or reservoir for the water.  By allowing the Berkeley to act as the catch basin for the water, we would have time to develop the treatment technology to ensure that our future water discharge would meet or exceed strict discharge requirements.  ARCO elected to suspend underground mining operations and turn off the pumps in the Kelley based in part on this study.

In March of 1982, we gave the order to bring the men up from the mine and the Berkeley Pit manager, Rick Ramsier, gave the order to turn off the pumps.  I am not sure who was actually at the switch that day, and really, it doesn’t matter.  The decision to turn off the pumps was a long time coming and was a thoughtful one.  We had done our studies, we had considered the options, and we gave our recommendations.  Ultimately, it was the ARCO leadership team who made the final decision to turn off the pumps.  However, it wasn’t a decision that was made lightly and without input from the various stakeholders.  Butte people had the impression that if we weren’t pumping, there wouldn’t be a mine.  However, we were developing the new pits at the time, so this impression was unfounded.

 

After we shut the pumps down, we started working with the state and the EPA (Environmental Protection Agency) to determine when we would have to start treating the Berkeley Pit water for discharge to Silver Bow Creek.  It was the state and ARCO who determined the critical water level, which of course, will be reached in the Anselmo mine before it is reached in the Berkeley Pit itself.  The time that it would take to reach the critical water level in the Anselmo mine would give us time to develop appropriate treatment technologies.  The state and the EPA were agreeable to this decision to store water in the Berkeley Pit and protect Silver Bow Creek in the meantime.  We were literally between a rock and a hard place.  I knew that we’d need to treat the water and that wasn’t feasible at the time.

 

We were working closely with ARCO management, local leadership and the state to determine the best course of action.  I recommended to the ARCO management team that we open the accounting books so that the public would be fully informed about the losses we were taking by staying open.  I always had the feeling that we would have to shut down the mine in order to address the problems and be able to create a profitable mine.  At first, ARCO was resistant to opening up the books, stating that it wasn’t anyone’s business to see how much money we were losing.  I pushed on this because I knew that if people could see what we were facing, they would understand the issues we needed to solve in order to be running.

 

In 1981, we lost $65 million, and $35 million in 1982.  Despite our many efforts, the study to look at new developments, and our work with the labor unions, ARCO had decided to get out of the mining business.  They would eventually spend $1.1 billion to do so.  In January of 1983, we announced that we would be closing the mine, with the final shutdown coming in June of 1983.  The national news agencies called it the “end of an era”.

 

The original plan was to shut down for a year and then re-open.  The year would give us time to resolve many of the issues that were plaguing us at the time.  ARCO had another mine in Nevada that they would re-open during our shut-down, which would allow them to fulfill contracts they had for copper and moly.  However, during the shut-down, copper and moly prices continued to fall.  We started to look for someone to buy the mine, but established mining companies were concerned about opening in Butte.  By 1985, we were becoming economically obsolete, with over $10 million in taxes owed to the county and state each year.

 

After the closure in 1983, Don Peoples, Butte’s Chief Executive at the time, announced the formation of a committee which consisted of representatives from Butte-Silver Bow, ARCO, labor, Montana Tech, the Bureau of Mines, and local business leaders.  The committee ensured that there was some give-and -take on all sides.  We needed a different tax structure.  We needed a different relationship with labor.  The work of the committee was to find solutions that would enable us to re-open.  I knew that we needed everyone at the table, and we needed to envision how to make the mine profitable.  As I stated, it was our intention to re-open within a year, but due to the copper prices and ARCO’s desire to get out of mining, it didn’t happen as I had hoped.  We still had a core group of people who believed we could get the mine going again.  We knew that the mine had value and could be operable.  We couldn’t keep going as we always had.   In previous years, we’d lose one month (about 30 days) on average per year due to labor disputes.  Management and labor were not functioning as a team.  We had to change our thinking.  This time we were completely open with the books in the committee meetings.  Everyone knew exactly how much ARCO was losing prior to shut down.  We had total transparency with everyone involved.  I believe transparency enabled us to think about the re-opening as a joint effort, with all parties contributing equally.

 

Barney Rask represented labor on this committee.  In the beginning, he and I did not see eye-to-eye.  At the end of it all, we became friends, but it was certainly not that way in the beginning.  He was agreeable to the new plan, which meant a 40% cut in the base wage for everyone—the miners, the staff, and the management, but included the profit-sharing model that we have in place currently.  Barney knew that the mine wouldn’t open without profitability.  He was able to eloquently describe the new system.  In fact, during a dinner with union officials and management, when ARCO was trying to sell the mine, Barney described the old Anaconda Company as a tree with two branches.  He said that one branch was management and one was labor.  As the tree grew, the branches grew further and further apart.  He went on to say, “It’s time to chop the tree down!”  The profit-sharing model we developed enabled us to get the mine going again, and Barney Rask was instrumental in helping to make that happen.

ARCO’s deadline for sale was December of 1985.  As the deadline approached, they started looking at salvage options.  They were going to make the mine obsolete by tearing down the crusher.  Once the mine was obsolete, they would be taxed as a scrap mine, which would save them approximately $10 million  per year on taxes.

Companies started visiting the mine to look at scrapping out the concentrator.  Dennis Washington was one of the people who visited.  He and his partner were in the salvaging business at the time.  Despite the apparent writing on the wall, our people still believed that the mine could re-open with the right buyer.  We showed Dennis Washington around the mine, but our hearts were really about re-opening and not at all about salvaging.  In September of 1985, Dennis Washington called us back and asked for a second tour of the mining property.  This time he came alone and asked us if we really thought it was possible to re-open.  I told him that there would be some years that he would lose money and some years that he would make money.   He offered to buy the mine right there and then.  We told him that we couldn’t make that decision.  He asked, “Who can make that decision?”  We told him it had to be the ARCO team in Denver.  He told us to contact the ARCO management for a meeting and to pack our suitcases because we were flying to Denver that day.  The final sale of the mine was in December of 1985, barely making ARCO’s deadline.  At this time, copper was trading at $ 0.60 compared to $1.25 per pound in 1980.

 

In 1986, we began working to identify better contracts with smelters, decrease our tax burden, and finalize our labor plan.  Once we’d cleared those obstacles in April of 1986, Dennis Washington said, “Let’s go!”  At the time the price of copper was at $0.58.  By the end of that year, copper was up to $1.30 per pound.  This price ensured that the workers had a good bonus that year, which cemented the profit-sharing model.

 

The mine had employed 1,300 people when I first started, down to 700 by 1983, and now the mine employs 350 people.  In terms of turning off the pumps and filling the Berkeley, it was a heavy decision, weighed against the best scientific and engineering information we had at the time, as well as the social and political implications.  We had to make changes, which are never easy.  However, these changes allowed us to keep mining in Butte.  I think the future is bright for Butte.  The current mining operation is managed very well under the leadership of Montana Resources President, Rolin Erickson, and should be operational for a long time under the parameters that are in place now.

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2 Responses to “An Interview with Frank Gardner Former President of Montana Resources and General Manager of the Berkeley Pit.”
  1. David Byrne says:

    I did not know Barney Rask was the one involved, I remember being their in Butte at the time. and the unemployment was very high, and the mines were shut down, and I worked in mines in 1974 very brief time and remember the school that was used for miners, and then later I remember the tax issue, and Dennis Washington later on had Ability to Buy and open mine I wish that the Shared profit would have been their for my Dad who worked 30 some yrs and got lung problems but did not get the Benefits and Barney Rask was a friend but did not help at the time, I think my Dad was disappointed with Rask. but time is gone and now is now and my mom is still their in Butte and she is also has lung problems We lived by the concentrator and around a lot of dust but one never knows what the cause as smoking was involved.

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