Mining industry fast losing ground

By Greg Lakes, editor
Headwaters News
Feb. 27, 2002

The Bush administration has reversed political fortunes in the decades-long battle between the mining industry and environmentalists, but on the annual bottom line, industry is still losing.

Industry lobbyists now are gleefully backing a different set of reforms than they opposed with equal vigor eight years ago.

Interior Secretary Gale Norton is preparing revisions to laws governing mining on federal land patterned after a 1994 measure backed by Idaho Sen. Larry Craig but vetoed by President Clinton.

Norton's plan would attach royalties to the net profits of mines on public lands, not the value of the mined ore, as Clinton and Interior Secretary Bruce Babbitt wanted.

And it will probably not give the Interior secretary the authority to reject mining plans because the site is more suited to recreation or habitat, as the Clinton clan wanted.

Environmentalists call it sham reform that just might fool the public, while a spokeswoman for the National Mining Association pledged industry support.

The differences go on: Babbitt rejected the Crown Jewel Mine in Washington, but Washington Republican Sen. Slade Gorton revived it. The mine failed to get necessary permits, and the issue helped Gorton lose the next election.

Norton approved a California gold mine Babbitt had killed. And critics say Montana's Rock Creek Mine would never have been approved in the Babbitt climate.

Debate over the Rock Creek Mine has been going on since at least the early 1980s, and calls for reform of the 1872 Mining Act go back even farther.

Polls in the mid-90s showed most voters in favor of mining reform of some kind, but industry lobbyists had to wait for the Bush administration for signs it might go their way.

Despite the signals, it hasn't happened yet. Across the region, industry is ailing, mines are folding and companies are begging release from their larger financial burdens.

The Kennecott Rawhide mine in Mineral County, Nev., will lay off 55 of its 160 workers next summer as the gold and silver veins play out.

The Getchell Mine laid off 157 of 193 workers three weeks ago at its gold mine near Winnemucca because of falling prices. The mine had 600 workers in 1999.

Colorado-based Canyon Resources, saying it was starving for short-term capital, announced mid-month that it would sell the mineral rights beneath 1 million acres of western Montana, including Flathead Lake shore property and 700,000 acres of timberland.

Canyon is holding onto its holdings at the headwaters of the Blackfoot River, site of a proposed and bitterly opposed open-pit gold mine.

In New Mexico, Phelps Dodge wants to change the state's requirement that it buy expensive third-party insurance to guarantee reclamation at its copper mines.

In British Columbia, industry spokesman said the Liberal government's reforms are probably too little too late to spur any significant recovery.

Executives at Hecla Mining Co., a 100-year-old Idaho company, were elated they lost only $5.7 million last year; the company lost $92 million in 2000.

A century of tradition is rapidly coming to a close in Idaho's Silver Valley, while state and federal officials, and local business owners and residents argue over the extent of the cleanup.

A bill to give mining companies a $500 tax break for every existing job and another $500 for every new job is making its way through the Idaho House on pleas that without help, the state's industry will die.

A sympathetic White House and the West's Republican heavyweights may be eager to usher in a kinder, gentler mining reform, but if they don't hurry, there will be still fewer operations to benefit.

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