Mining could boom with easing of rules

SPOKANE — A proposed gold mine in Okanogan County could be the first of numerous new mining projects in Washington in the wake of a Bush administration rule change, officials said Monday.

While environmentalists were alarmed by the change, the Northwest Mining Association hailed the demise of a Clinton-era rule it said prevented new mines from opening in the United States.

Laura Skaer of the Spokane-based mining association expects a wave of mine exploration in the West.

"A number of companies pulled exploration dollars out of the U.S. because they couldn’t justify looking for new mineral deposits when there was no assurance they would get the land they need to build a mine," Skaer said.

Now those dollars will likely come back, she said.

In 1997, the Clinton administration decided that federal mining law limited companies working on public lands to a 5-acre mill site for every 20 acres of mine.

Mining companies said it was nearly impossible to concentrate all the needed processing and storage space for a working mine on 5 acres, so the rule limited their industry.

On Friday, the Bush administration eliminated that limitation, allowing mining companies to use unlimited amounts of public land to dump their tailings and other mine waste.

Also last week, the long-planned Crown Resources Corp. mine site in Okanogan County was purchased by Kinross Gold Corp. of Toronto, Canada, one of the largest gold mining companies in the world.

Kinross Gold paid $134 million in a stock deal for the gold mine site at Buckhorn Mountain, and said it will push ahead with development of an underground mine.

Kinross earlier this year bought the Echo Bay gold mine near Republic, the state’s only active gold mine.

There is relatively little mining in Washington these days, but the state contains 3,800 abandoned mines, some of which continue to pollute waterways with toxic runoff, said Mo McBroom of the Washington Public Interest Research Group.

Relaxation of the mining rule, coupled with Kinross’ expansion, could be bad news for the environment, McBroom said.

"We have a behemoth mining corporation that will operate a multitude of mines and mills in the state, with the possibility of developing ‘mega mill sites’ on public land on a scale that was not previously possible," McBroom said.

Kinross said the Buckhorn Mountain project has gold reserves of about 900,000 ounces.

Kinross executives said they were confident they could obtain the needed government permits to develop the site.

"We have been encouraged by the recent legislative changes in the state of Washington, which have improved the business climate and the opportunity for the development of the high quality Buckhorn Mountain gold project," said Bob Buchan, president and chief executive of Kinross.

Kinross said it hoped to close the deal with Crown Resources by the end of the year.

Kinross will also decide whether it makes economic sense to truck minerals to its Republic mill for processing, rather than building a new mill near Buckhorn Mountain, the company said.

Mining is becoming more attractive to companies as gold prices have risen to $375 an ounce, from $320 a year ago and $270 in 2001.