Mining company must pay $17M in back royalties - East Valley Tribune: Business

Mining company must pay $17M in back royalties

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Posted: Friday, September 26, 2008 11:12 am | Updated: 11:12 pm, Fri Oct 7, 2011.

A mining company owned by the Salt River Pima-Maricopa Indian Community was ordered by a jury Thursday to pay $17 million in underpaid royalties to the owner of several quarries in Sun City, Glendale and Queen Creek.

The award resolves a lawsuit filed in 2004 by Gravel Resources of Arizona.

A Maricopa County Superior Court jury also found that Salt River Sand and Rock left the mines in environmentally unsafe conditions, said Larry Wright, the attorney representing the landowner.

Salt River Sand and Rock, whose mining operations operate under the name Salt River Materials Group, leased land for 11 years from Gravel Resources. The mining operations took place at 115th Avenue and Harmony, 115th and Glendale avenues, and in Queen Creek on Schnepf Road.

Wright said while the award fell short of the $21 million the company requested, it represented a substantial portion of the request and Gravel Resources "felt good about it."

According to Gravel Resources, during the trial, Roger Smith, President and CEO of Salt River Sand and Rock, acknowledged that the mining activities of the company carried out on the Gravel Resources property failed to meet the standard of a first-class mining operation, as required by the lease. Smith also acknowledged that, when a dispute first arose in 2003 concerning royalties, Salt River Sand and Rock refused to permit an audit of its books despite repeated requests from Gravel Resources. The audit was subsequently carried out by Gravel Resources following litigation in 2004.

About $3.4 million of the award is to compensate the company for cleanup. The remainder was for unpaid royalties.

Smith and Salt River officials declined to comment on the award.

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