Debra Reid  /  AP
Battle Mountain, Nev, part of it visible here at the site of an open mining pit, could see expanded mining for gold.
updated 3/12/2004 3:56:01 PM ET 2004-03-12T20:56:01

On a high-desert mountain where prospectors first struck it rich in the 1860s, the world’s largest gold mining company plans a major expansion that critics say could pollute the environment for tens of thousands of years.

Newmont Mining Corp.’s proposed $200 million Phoenix project would cover nearly 10 square miles of northern Nevada, reclaiming parts of an existing 3,000-acre contaminated site and spreading gold mining operations over an additional 4,300 acres beginning in 2006.

The Bureau of Land Management backs the project but the Environmental Protection Agency agrees with a watchdog group’s claims that the Denver-based company is dramatically underestimating the potential costs of environmental risks.

“They are predicting acid will drain off the site for 20,000 years,” said Tom Myers, a hydrologist and executive director of the environmental group Great Basin Mine Watch in Reno.

Newmont has acknowledged that sulfuric acid could leak from the mine well into the future, and so it plans to post money in a new environmental trust fund required under regulations President Clinton ordered his last day in office. The fund is intended to protect taxpayers by setting aside money to address any ill effects that might be detected in the years after a mine plays out and the company restores the site.

“It’s a contingency for what we think is highly unlikely. We think we have a real sound project there,” said John Mudge, Newmont’s director of environmental affairs.

But Myers’ concerns go beyond Newmont. “If they sell it (the mine) to ‘Joe Bob Mining’ when the site is essentially mined out, that worries me,” he said.

Mistrust over trust fund
The Bureau of Land Management and the Environmental Protection Agency also can’t agree about the risks posed by the site — and how much it might take to clean it up. Newmont maintains, and the BLM agrees, a $408,000 trust fund, backed with additional investment in a $1 million surety bond, is sufficient. The EPA says $33 million is closer to the mark.

“It’s a huge disagreement — a big discrepancy for a very big project with a very large potential for impacts,” Jeanne Geselbracht, an EPA specialist who reviewed BLM’s environmental studies, told The Associated Press. “They’re proposing only about 1 percent of what we think is needed to start out the trust fund and make sure taxpayers don’t get stuck with the bill.”

“It looks like a pretty sure thing that there will be groundwater contamination and that they will need to use the money,” she said.

The huge open pit is carved into the side of Battle Mountain about 12 miles south of the town of the same name on Interstate 80, about 200 miles east of Reno. Dozens of mines have opened and closed there in the 140 years since miners first tapped the minerals beneath the 8,200-foot peak.

“There is no more sacrificed mountain in this state than this mountain here,” Myers said during a recent aerial tour with LightHawk of Lander, Wyo., a group of volunteer environmentalist pilots who fly news reporters on observation flights.

The Mine Watch doesn’t want to block the project — just up the ante in the trust fund, Myers said. The group warned BLM that the project will dry up streams, pollute groundwater and surface water, cause substantial toxicological threats to wildlife and likely end up on the EPA’s Superfund list.

“They have predicted pollution will occur at several locations as water drains through the waste rock that will be left behind. They basically are predicting this kind of thing will get into the groundwater,” Myers said.

Besides its trust fund contribution, Newmont has agreed to post a bond to cover $237 million in reclamation costs to return the site to its condition before mining. That money would be returned within 30 years if the work is completed on schedule.

While defending their project, Newmont officials say it promises to bring 270 jobs to a depressed rural mining area.

State a gold leader
Nevada ranks third in the world in gold production behind South Africa and Australia, but the mining industry has struggled in recent years. Mining jobs in the state dropped from nearly 15,000 in the mid-1990s to fewer than 9,000 in 2002, according to the Nevada Mining Association.

The business plan calls for 13 years of mining although the federal permit allows for 28 years. Nearly 1 billion tons of rock and soil would be unearthed with projected production of 5.2 million ounces of gold, 27 million ounces of silver and 360 million pounds of copper.

“It’s a great project for the community and the economy there,” Newmont’s Mudge said.

Still, while plans for the mine continue, the two federal agencies disagree over how much money Newmont needs to put up for possible future cleanups.

BLM officials concluded $408,000 is a sufficient initial investment for the new environmental trust fund to cover the site over the long term and dismissed EPA’s estimate that $33 million was needed. That decision that can be appealed through March 20.

Gail Givens, BLM’s assistant field manager for nonrenewable resources in Nevada, said, “Even if we are wrong, we have safeguards built in to make it right,” including a review of the fund status every three years.

Computer modeling suggests acid rock drainage could find its way into the water table, Givens said. But he said a thick cap of soil and vegetation planned to cover the waste rock piles will keep water, rain and snow from reaching the rock.

“The modeling said it was possible (acid will leak) — that 60 years after mining it could happen. But we really don’t anticipate a large problem there,” he said and dismissed longer-term projections.

EPA concern goes back three years
The EPA’s Geselbracht said agency officials described in several meetings with BLM how they calculated cleanup costs but never received a good explanation from their counterparts about the discrepancy in cost estimates.

“They just disagree with us. They took the number they were given by Newmont,” she said.

EPA has been raising concerns about the project for more than three years. Groundwater at the site already is contaminated with arsenic, cadmium, copper, nickel, zinc, selenium, mercury, beryllium and chloride, the agency said.

Mudge said the existing contamination is one of the reasons Newmont wants to repair the site and expand with more efficient, modern mining practices.

“This is our chance to go in and really mine this area out, reclaim and close out all the existing areas,” he said. “I can’t emphasize enough how it is going to improve the environment out there where a lot of historic mining has been taking place.”

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