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Arizona and Phelps Dodge Corp. have agreed on a plan to reduce longstanding groundwater contamination from the Sierrita Mine near Green Valley.

The agreement, signed Wednesday, requires Phelps Dodge to take steps to ensure sulfates that seep into groundwater from mine tailings ponds don't contaminate drinking-water wells at levels exceeding recommended state and federal limits.

The state Department of Environmental Quality says sulfates — sulfur-based compounds that come from copper production — can cause diarrhea and harm the stomach and intestines.

There are no legally enforceable limits, but the Environmental Protection Agency recommends a maximum contamination level of 250 parts per million.

Under the agreement, known as a consent order, Phelps Dodge agrees to produce a plan in 60 days to define the extent of sulfate pollution lying in groundwater downstream of the mine, which is six miles northwest of Green Valley at 6200 W. Duval Mine Road.

The company must also outline a separate plan to prevent the pollution from contaminating any public or private well within a mile of the outer edge of the polluted water.

The agreement was announced at the same time the state approved a draft water-quality permit allowing Phelps Dodge to discharge its mine tailings into the aquifer.

State DEQ Director Steve Owens hailed the agreement as a groundbreaking step.

It's the first time the state has used its legal authority to force a company to deal with contamination caused by a substance such as sulfates that are considered non-hazardous under federal and state laws. It's also the lowest sulfate level that the state has required a company to meet in protecting drinking water, Owens said.

"It not only will ensure a clean drinking water supply for the community of Green Valley, it also sets the standard for dealing with other areas with sulfate contamination around the state," said Owens. He said the department will use the agreement as a formal precedent.

Phelps Dodge also is pleased, a spokesman said.

"Residents of Green Valley have clean, safe water today," said Ken Vaughn, the company's mining communications manager. "This agreement ensures it will remain the case long-term and that we will identify the most effective way to deal with it."

Nancy Freeman, founder of the Ground Water Awareness League, a Green Valley citizens group, also praised the agreement.

"I think Phelps Dodge is waking up to the reality that they've gotta work with communities," said Freeman. "They can no longer wheel and deal and buy Arizona governors like they did in the past."

Authorities have known since the mid-1980s that sulfates seeping from the Sierrita Mine — owned at the time by another company — had polluted groundwater and represented a potential threat to drinking water supplies.

Last year, the Community Water Co. of Green Valley had to close two drinking-water wells that had sulfates at levels above 500 parts per million.

Phelps Dodge has since provided temporary replacement wells for the contaminated wells and paid $8 million toward helping the company build new, permanent wells to replace those that are polluted.

But the contamination is much broader than those two wells, according to the new consent order.

Samples from monitoring wells found contamination levels of 1,000 to 2,000 parts per million in the aquifer from 500 to 1,000 feet downstream of the mine's tailings and at levels of more than 1,000 parts per million as far away as five square miles downstream of the tailings.

Owens said the state isn't forcing Phelps Dodge to clean up the entire aquifer because it lacks authority to force cleanup of substances that aren't legally considered hazardous. Instead, the state is trying to make sure the pollution doesn't harm other drinking wells, he said.