AUGUSTA (AP) – State officials claimed progress Monday in cleaning up contamination at the former HoltraChem site in Orrington.

Gov. John Baldacci said a proposal for the next phase calls for digging up soil laced with mercury from five landfills around the facility. The contaminated soil could be shipped to a licensed treatment and disposal handler, possibly in Canada.

The site was formerly used for the manufacture of pesticides and chemicals. HoltraChem Manufacturing closed in 2000.

Officials said the cleanup is being funded by Mallinckrodt Group, which did not operate at the site, but at one time was an owner of the property. Officials said expenses to date are estimated at more than $11 million.

The town of Orrington has taken ownership of the 235-acre property in a tax foreclosure. State officials said tests have determined that 77 acres are contaminated, but that the town is exploring development of a large area deemed clear of environmental and health hazards.

Commissioner Dawn Gallagher of the Maine Department of Environmental Protection said options that would have consolidated the soils and confined them to an unlined unit on the property had been rejected.

She said estimated costs of various cleanup plans range from $46 million to more than $200 million.

“Last fall, Governor Baldacci identified HoltraChem as the highest priority environmental contamination cleanup site in the state.’ I am determined that the public comes first when we evaluate final actions,” she said in a statement.

Officials said sludge from manufacturing operations that had been stored in the unlined landfills for decades will be combined with other contaminated soils excavated from beneath buildings during the removal process.

“Clearly the best alternative for future years is to send the soils offsite, away from the Penobscot River, for proper, safe disposal. I am sensitive to the fact that it’s the most expensive option, but it does away with lingering doubts that could worry residents and possibly cloud future development,” Gallagher said.