[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
SUSTAINABLE DEVELOPMENT OPPORTUNITIES IN MINING COMMUNITIES
=======================================================================
OVERSIGHT HEARING
before the
SUBCOMMITTEE ON ENERGY AND
MINERAL RESOURCES
of the
COMMITTEE ON RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
Thursday, July 28, 2005
__________
Serial No. 109-27
__________
Printed for the use of the Committee on Resources
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
or
Committee address: http://resourcescommittee.house.gov
______
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COMMITTEE ON RESOURCES
RICHARD W. POMBO, California, Chairman
NICK J. RAHALL II, West Virginia, Ranking Democrat Member
Don Young, Alaska Dale E. Kildee, Michigan
Jim Saxton, New Jersey Eni F.H. Faleomavaega, American
Elton Gallegly, California Samoa
John J. Duncan, Jr., Tennessee Neil Abercrombie, Hawaii
Wayne T. Gilchrest, Maryland Solomon P. Ortiz, Texas
Ken Calvert, California Frank Pallone, Jr., New Jersey
Barbara Cubin, Wyoming Donna M. Christensen, Virgin
Vice Chair Islands
George P. Radanovich, California Ron Kind, Wisconsin
Walter B. Jones, Jr., North Grace F. Napolitano, California
Carolina Tom Udall, New Mexico
Chris Cannon, Utah Raul M. Grijalva, Arizona
John E. Peterson, Pennsylvania Madeleine Z. Bordallo, Guam
Jim Gibbons, Nevada Jim Costa, California
Greg Walden, Oregon Charlie Melancon, Louisiana
Thomas G. Tancredo, Colorado Dan Boren, Oklahoma
J.D. Hayworth, Arizona George Miller, California
Jeff Flake, Arizona Edward J. Markey, Massachusetts
Rick Renzi, Arizona Peter A. DeFazio, Oregon
Stevan Pearce, New Mexico Jay Inslee, Washington
Henry Brown, Jr., South Carolina Mark Udall, Colorado
Thelma Drake, Virginia Dennis Cardoza, California
Luis G. Fortuno, Puerto Rico Stephanie Herseth, South Dakota
Cathy McMorris, Washington
Bobby Jindal, Louisiana
Louie Gohmert, Texas
Marilyn N. Musgrave, Colorado
Vacancy
Steven J. Ding, Chief of Staff
Lisa Pittman, Chief Counsel
James H. Zoia, Democrat Staff Director
Jeffrey P. Petrich, Democrat Chief Counsel
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SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES
JIM GIBBONS, Nevada, Chairman
RAUL M. GRIJALVA, Arizona, Ranking Democrat Member
Don Young, Alaska Eni F.H. Faleomavaega, American
Barbara Cubin, Wyoming Samoa
Chris Cannon, Utah Solomon P. Ortiz, Texas
John E. Peterson, Pennsylvania Jim Costa, California
Stevan Pearce, New Mexico Charlie Melancon, Louisiana
Thelma Drake, Virginia Dan Boren, Oklahoma
Bobby Jindal, Louisiana Edward J. Markey, Massachusetts
Louie Gohmert, Texas Nick J. Rahall II, West Virginia,
Richard W. Pombo, California, ex ex officio
officio
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C O N T E N T S
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Page
Hearing held on Thursday, July 28, 2005.......................... 1
Statement of Members:
Gibbons, Hon. Jim, a Representative in Congress from the
State of Nevada............................................ 1
Prepared statement of.................................... 2
Grijalva, Hon. Raul M., a Representative in Congress from the
State of Arizona........................................... 3
Prepared statement of.................................... 4
Statement of Witnesses:
Arnold, James R., P.E., Vice-President, Technical Services
and Projects, Coeur d'Alene Mines Corporation.............. 9
Prepared statement of.................................... 11
Carpenter, Ann S., Domestic and International Mineral
Development Consultant, Women's Mining Coalition........... 22
Prepared statement of.................................... 24
Harrington, Tom, Assistant Manager, Jefferson Local
Development Corporation.................................... 14
Prepared statement of.................................... 16
Jeffress, James, Retired Wildlife Biologist/Private
Consultant, Lovelock, Nevada............................... 5
Prepared statement of.................................... 7
Lee, L. Courtland, Consulting Geologist, Appalachian
Gemstones, Boxlee Azalea Farm, Glenn Dale, Maryland........ 19
Prepared statement of.................................... 21
OVERSIGHT HEARING ON THE ``SUSTAINABLE DEVELOPMENT OPPORTUNITIES IN
MINING COMMUNITIES''
----------
Thursday, July 28, 2005
U.S. House of Representatives
Subcommittee on Energy and Mineral Resources
Committee on Resources
Washington, D.C.
----------
The Subcommittee met, pursuant to notice, at 10:04 a.m., in
Room 1334 Longworth House Office Building, Hon. Jim Gibbons
[Chairman of the Subcommittee] presiding.
Present: Representatives Gibbons, Pearce, and Grijalva.
STATEMENT OF THE HON. JIM GIBBONS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEVADA
Mr. Gibbons. The Subcommittee on Energy and Mineral
Resources will come to order.
The Committee meets today for an oversight hearing on
sustainable development opportunities in mining communities,
and this is Part II.
The first sustainable development opportunities in mining
communities hearing was held last fall in Reno, Nevada. During
that hearing we heard about the developing partnerships between
mining companies and their host communities in Nevada, as well
as the opportunities and obstacles for economic development as
a means of sustainable development opportunities in mining
communities.
During today's hearing we will hear about specific projects
from community and company representatives, one in Nevada and
one in Montana. Other witnesses will provide an overview of the
mining industry's evolving sustainable development practices
and how Federal land management policy could be improved to
help break the boom-and-bust cycles common in the resource
industry.
One question all mining communities face about their long-
term fate is what happens when the mine closes. This question
brings us to the need for a continuing dialogue on sustainable
development in mining communities.
Sustainable development is a multifaceted process that
strives to integrate economic and social considerations, as
well as the more traditional environmental considerations, into
resource management decisions. In mining communities, true
sustainable development must include an integrated approach to
mine closure and is fundamental to ensure Western communities
can maintain their quality of life. True sustainable
development will provide for the creation of new jobs without
compromising the integrity of the environment once a resource
development project is concluded.
To understand what constitutes real sustainable development
in mining communities, one must first understand the role of
the mining industry during the settlement of the West. The
mining industry was instrumental in providing the original
economic incentive and rationale for settlement of the West.
Many of the major urban areas and towns of the West are former
mining communities. As we all know, the cities like Denver are
no longer mining towns, but the infrastructure left by the
mining industry made not only the initial survival of these
cities possible, but their subsequent development.
Today, however, rural communities in the West that host
mining operations do not have the opportunity to choose whether
or not to use mining-related infrastructure as an economic
jump-start because of Federal land management policies. Under
current Federal policy, when a mine operating on Federal land
reaches mine closure, they are required to remove all
infrastructure as part of the reclamation process. This means
that when the mine closes, not only do the jobs leave, but the
infrastructure that can offer communities the opportunity to
develop new industries leaves as well. Allowing infrastructure
to remain in place to be utilized by the community for other
types of economic activity can help mitigate the effects of
mine closure in host communities that are affected by the mine
closure process.
Current reclamation policy is not the only obstacle facing
sustainable development in mining communities. Historically,
the Secretary of the Interior has been charged with managing
Federal lands for multiple use and sustained yield. The Federal
Government seems to be more in the business of preservation of
public land than management. As part of this hearing, I think
it would be helpful to look at the philosophies of laws, such
as the Federal Land Policy and Management Act, and how those
philosophies are impacting sustainable development throughout
the West.
[The prepared statement of Mr. Gibbons follows:]
Statement of The Honorable Jim Gibbons, Chairman,
Subcommittee on Energy and Mineral Resources
The Committee meets today for an oversight hearing to receive
testimony on ``Sustainable Development Opportunities in Mining
Communities''.
At this hearing we will address the developing partnerships between
mining companies and their host communities, as well as the
opportunities for and obstacles hindering development as a means of
sustainable development in mining communities.
One question all mining communities face about their long-term fate
is--what happens when the mine closes?
This question brings us to the need for a continuing dialogue on
sustainable development in mining communities.
Sustainable development is a multi-faceted process that strives to
integrate economic and social considerations, as well as the more
traditional environmental considerations into resource management
decisions.
In mining communities true sustainable development must include an
integrated approach to mine closure and is fundamental to ensure
Western communities maintain their quality of life.
True sustainable development will provide for the creation of new
jobs without compromising the integrity of the environment once a
resource development project is concluded.
To understand what constitutes true sustainable development in
mining communities, one must first understand the role of the mining
industry during the settlement of the West.
The mining industry was instrumental in providing the original
economic incentive and rationale for the settlement of the West.
Many of the major urban areas and towns of the West are former
mining communities.
As we all know, cities like Denver are no longer mining towns, but
the infrastructure left by the mining industry made not only the
initial survival of these cities possible, but their subsequent
development.
Today, however, the rural communities in the West that host mining
operations do not have the opportunity to use mining related
infrastructure as an economic jumpstart because of Federal land
management policies.
Under current federal policy, when a mine operating on federal land
reaches mine closure they are required to remove all infrastructure as
part of the reclamation process.
This means that when the mine closes, not only do the jobs leave,
but the infrastructure that can offer communities the opportunity to
develop new industries leaves as well.
Allowing infrastructure to remain in place to be utilized by the
community for other types of economic activity can help mitigate the
effects of mine closure in host communities affected by the mine-
closure process.
Current reclamation policy is not the only obstacle facing
sustainable development in mining communities.
Historically, the Secretary of the Interior has been charged with
managing federal lands for multiple-use and sustained yield.
However, the federal government seems to be more in the business of
preservation of public lands than management.
As part of this hearing, I think it would be helpful to looks at
the philosophies of laws such as FLPMA, and how those philosophies are
impacting sustainable development throughout the West.
I would like to thank our witnesses for being here today to discuss
what we can do to keep high paying, family wage jobs in our mining
communities during and after mine closure.
______
Mr. Gibbons. I want to thank all our witnesses for being
here today to discuss what we can do to keep high-paying,
family wage jobs in our mining communities during and after
mine closure.
With that, I will turn now to my friend and colleague Raul
Grijalva for his opening statement. Mr. Grijalva?
STATEMENT OF THE HON. RAUL GRIJALVA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARIZONA
Mr. Grijalva. Thank you so much, Mr. Chairman. Very kind.
Mr. Chairman, I am also pleased to join you in welcoming
our panel of witnesses today to discuss sustainable development
as it relates to mining. I am also pleased that a growing
number of mining industry leaders are recognizing that
sustainable development is indeed a good idea. As noted in the
report entitled, ``Our Common Future,'' published by the World
Commission on Environment and Development in 1987, it stated:
Humanity has the ability to make development sustainable, to
ensure that it meets the needs of the present without
compromising the ability of future generations to meet their
own needs.
All over the West, we see the unfortunate results of mining
operations that have not taken into account this very basic
principle of sustainable development in their rush for the gold
ore, in my State, for the copper. The Environmental Protection
Agency estimates that mine waste contaminates 40 percent of
Western headwaters and that cleaning up half a million
abandoned mines in 32 States may cost $35 billion or more.
According to Government estimates, the State of Arizona is
home to approximately 100,000 inactive or abandoned mining
sites, an estimated 3,000 of which pose an environmental risk.
The Arizona Department of Environmental Quality has stated: The
legacy pollutants that remain from active and former mines are
some of the major pollution sources for Arizona's water bodies.
Additionally, communities are understandably becoming more
concerned about the effects of having a mine in their
neighborhood. For example, Arizonans who live near Ray Copper
Mine in Pinal County in southern Arizona, about 65 miles east
of Phoenix, are concerned about the high rate of lung cancer in
their community. This mine was owned by ASARCO, who began
mining at the Ray mine in 1948. Grupo Mexico, Mexico's largest
mining company and the third-largest copper producer in the
world, purchased ASARCO in November 1999. The mine complex
includes the nearby Hayden smelter, which is the largest single
source of toxic pollution in Arizona. According to EPA, the
occurrence of lung cancer among Hayden residents is roughly 50
percent higher than the residents of the urban areas of Tucson
and Phoenix.
So to see the representatives such as the witnesses today
deal with this problem--that, quite frankly, the industry has
created over the past century--and also recognize the need to
work more cooperatively with local communities as we go forward
in this century, is a positive step toward meeting the needs of
the present without compromising the abilities of the future,
our future generations, to meet their own needs. I would say
this is very good progress.
I look forward to the witnesses' testimony. Thank you very
much, Mr. Chairman.
[The prepared statement of Mr. Grijalva follows:]
Statement of The Honorable Raul M. Grijalva, Ranking Democrat,
Subcommittee on Energy and Mineral Resources
Mr. Chairman, I am pleased to join you in welcoming our panel of
witnesses today to discuss sustainable development as it relates to
mining.
I am also pleased that a growing number of mining industry leaders
are recognizing that ``sustainable development'' is a good idea. As
noted in the report entitled, ``Our Common Future'', published by the
World Commission on Environment and Development in 1987, ``Humanity has
the ability to make development sustainable--to ensure that it meets
the needs of the present without compromising the ability of future
generations to meet their own needs.''
All over the West we see the unfortunate results of mining
operations that did not take the principles of sustainable development
into account in their rush for gold--or, in my State--for copper. The
Environmental Protection Agency estimates that mine wastes contaminate
40 percent of western headwaters, and that cleaning up a half million
abandoned mines in 32 states may cost $35 billion or more. According to
government estimates, the State of Arizona is home to approximately
100,000 inactive or abandoned mining sites, an estimated 3,000 of which
pose an environmental risk. The Arizona Department of Environmental
Quality has stated, ``the legacy pollutants that remain from...active
and former mines are some of the major pollution sources for Arizona's
waterbodies.''
Additionally, communities are understandably becoming more
concerned about the effects of having a mine in their neighborhood. For
example, Arizonans who live near the Ray Copper Mine, in Pinal County
in southern Arizona, about 65 miles east of Phoenix are concerned about
the high rate of lung cancer in their community. This mine was owned by
ASARCO, who began mining copper at the Ray Mine in 1948. Grupo Mexico,
Mexico's largest mining company and the third largest copper producer
in the world, purchased ASARCO in November of 1999.
The mine complex includes the nearby Hayden smelter, which is the
largest single source of toxic pollution in Arizona. According to the
EPA, the occurrence of lung cancer among Hayden residents is roughly 50
percent higher than for residents of the Tucson and Phoenix areas.
So, to see representatives, such as our witnesses today, own up to
the problems their industry has created over the past centuries and
also recognize the need to work more cooperatively with local
communities as we go forward in this century is a positive step toward
meeting the needs of the present without compromising the ability of
future generations to meet their own needs.
______
Mr. Gibbons. Thank you very much.
What we will do now is introduce our first panel. It beings
with Mr. Jim Jeffress, retired wildlife biologist and private
consultant, from Lovelock, Nevada. Mr. James Arnold, Vice
President for Technical Services and Projects, Coeur d'Alene
Mines Corporation. Mr. Tom Harrington, Assistant Manager,
Jefferson Local Development Corporation. Mr. Courtland Lee, a
geologist, Glenn Dale, Maryland. And Ms. Ann Carpenter, Mineral
Development Consultant, Women's Mining Coalition, and past
president/advisor of that organization.
Ms. Carpenter and gentlemen, if you will all rise, raise
your right hand, we have an oath.
[Witnesses sworn.]
Mr. Gibbons. Let the record reflect that our witnesses all
answered in the affirmative.
We will begin now--your right--to the left, with Mr.
Jeffress. Welcome. The floor is yours. We look forward to your
testimony. We do have a little stop-and-go light here in front,
a 5-minute timer on that. We would ask that you try to keep
within the 5 minutes. We are not going to be very harsh on you
if you go over a little bit, but once you get beyond taking up
time for everybody else, then we will ask you to summarize.
But Mr. Jeffress, welcome. We look forward to your
testimony. The floor is yours.
STATEMENT OF JIM JEFFRESS, RETIRED WILDLIFE
BIOLOGIST/PRIVATE CONSULTANT
Mr. Jeffress. Good morning, Mr. Chairman, Congressman
Grijalva. My name is Jim Jeffress. I'm a resident of Pershing
County, have lived in northern Nevada my entire life, and have
worked as a certified wildlife biologist for over 30 years. I
retired from the Department of Wildlife in 2003 and am
currently working as a private consultant. I serve on the
Pershing County Checkerboard Lands Committee in the State of
Nevada Wildlife Commission.
For many northern Nevada communities which rely upon the
mining industry for jobs, employment is up and the future looks
bright. But this is not the case for the City of Lovelock in
Pershing County. Many wage earners in Lovelock work at the
Rochester mine or have jobs directly related to it. But that
mine will close within two or three years and there are no
mining or other project developments that will be able to
replace those jobs in the immediate future. The mine has been a
mainstay of the county close to 20 years.
The closure of Rochester mine is one of the greatest
challenges facing our community, and people are concerned about
how to deal with the dramatic loss of jobs, taxes, and other
economic benefits. Some people certainly will relocate to other
jobs in Nevada or throughout the West, but how Lovelock will
survive as a community--and its future economic development is
important to me and others who plan to remain there.
The most important fact to know about northern Nevada is
that it is overwhelmingly owned by the Federal Government.
Exactly 91.6 percent of Pershing County is federally owned.
Most of that is managed by the BLM. Pershing County is a large
county as counties go, 6,000 square miles, with large distances
between developed locations. Mr. Chairman, that is 1,000 square
miles larger than the State of Connecticut. The county is
sparsely populated. There are 6,400 residents, and
approximately half of those live in the City of Lovelock.
My point is that with this much land under the control of
the Federal Government, there is little chance that Pershing
County can attract economic development, sustainable or
otherwise, without the active cooperation of the Federal
Government.
A second extremely important fact, that we have very little
infrastructure to offer in the pursuit of economic development
opportunities. The Federal lands that dominate the county have
roads to the extent that they were built to service mines,
ranching, or other approved activities within the county. Most
of Pershing County is roadless, has no access to cell signals
or other telecommunications, water, or power.
A story of my experience as a consultant illustrates very
well how these two facts work together to control what can or
cannot be done in rural Nevada. A few years ago, a businessman
from Texas contacted me to explore the possibilities of
installing windmills in Pershing County to generate power. The
man asked me to help identify roads to particular sites he was
interested in for a wind farm. I explained there were no roads,
that road construction would be necessary, and that
construction is controlled by the BLM. Construction of roads
would be expensive, time consuming, and under the best of
circumstances it would more than likely take a year or more to
clear the NEPA process. Eventually, the lack of infrastructure,
the potential scoping process with various other user groups,
and the Federal control of the approval process discouraged
this investor.
Mr. Chairman, I do not offer this story as criticism of the
BLM. To my knowledge, the man never contacted that Agency,
never followed up. In his mind, the hurdles were too
formidable. To me, this story simply illustrates that in
Pershing County and places like it, we must have the
cooperation and support of the Federal Government in order to
build those local economies.
The other lesson of this story is that infrastructure,
where it exists, is extremely valuable. Where they can be used,
these resources can constitute sustainable development in a
very real sense. For Pershing County, the roads, powerlines,
buildings, and other facilities at the Rochester mine have
immense value if they can be used for something besides mining.
I need to be clear that I am not an expert on the Coeur
proposals to haul aggregate or rock from that site. I have some
familiarity with it, but it is not my place to say whether it
would be a successful venture or not. What I can say is that
the Government and Pershing County should look carefully at any
and all economic development proposals that can take advantage
of the roads, powerlines, and other facilities built to support
that mine operation. If there is any way to use these valuable
assets to create jobs and keep workers in Pershing County and
comply with Federal and State regulations regarding
environmental concerns, we should support it.
Mr. Chairman, thanks to the rich mineral resources in the
State of Nevada, the mining industry is the biggest source of
economic stability in rural Nevada, providing jobs, benefits,
infrastructure, and tax revenues to communities that otherwise
would not thrive. Unfortunately, all mining operations are
finite in their life span, and in Pershing County that truism
is fast becoming a reality. For the citizens of our county it
is particularly important for the Federal Government to figure
out just what sustainable development means within the mining
industry and what needs to be done to provide it.
Mr. Chairman, I appreciate the opportunity to testify
before you today, and that concludes my statement.
[The prepared statement of Mr. Jeffress follows:]
Statement of James Jeffress, Resident of Lovelock, Nevada,
Pershing County, Nevada
I appreciate the opportunity to present testimony for the
Committee's record on sustainable development opportunities in mining
communities. I am now a private resident of Pershing County, and have
lived in northern Nevada my whole life. I am a 1972 graduate of the
University of Nevada Reno with a BS in Wildlife Management. I have
worked as a certified wildlife biologist for over thirty years,
including as the Washoe County Wildlife Biologist and the Humboldt
County Wildlife Biologist, and have been involved in over fifty
collaborative planning processes dealing with public land or wildlife
related issues (i.e. Coordinated Resource Management Plans, the Modoc-
Washoe Stewardship Planning Process, numerous Technical Review Team
processes, allotment processes, statewide Sage-Grouse conservation
planning effort, etc.). Before retiring from the Nevada Department of
Wildlife in 2003, 1 I received the Department's 2002
Employee of the Year award.
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\1\ From 1993-2003, the Department was known as the Nevada Division
of Wildlife, a division of the Nevada Department of Conservation and
Natural Resources. The Nevada Legislature created the Department of
Wildlife in 2003, elevating it to a Cabinet-level agency (Assembly Bill
41).
---------------------------------------------------------------------------
I am currently self-employed as a private consultant, working for a
variety of private and public interests including the United States
Bureau of Land Management District Office in Winnemucca, where I am
assisting the Bureau in drafting the narrative portions of the Sage-
Grouse Conservation Plans for Humboldt County. I am a past member of
the Board of Directors for Nevada Bighorn Unlimited, and have worked
extensively on re-introducing California Bighorn Sheep back into
Nevada. I was one of the originating founders of the Nevada Chukar
Foundation, which has placed wildlife guzzlers (water developments)
throughout Northern Nevada and provided other programs to improve
habitat for Nevada's Chukar Partridge and a myriad of other wildlife
species. I currently serve on the Pershing County Checkerboard Lands
Committee 2 and as a Commissioner of the Nevada Wildlife
Commission. I live with my wife Paige, and our two children Kelli and
Matt, in Lovelock, NV about 90 miles northeast of Reno, NV.
---------------------------------------------------------------------------
\2\ The Committee was created by the Pershing County Board of
County Commissioners to coordinate discussions about federal land use
issues in the County and potential federal legislation addressing
future land use. In the 19th Century, the federal government granted to
railroad companies every other section of land along the right-of-way
for the transcontinental railroad to create incentives for construction
and settlement. The resulting ``checkerboard'' creates difficult
management issues for the BLM and impairs the ability of private
landowners to use and develop their lands. One of the major goals of
the Pershing County Checkerboard Lands Committee is to address and
resolve the problems created by the checkerboard in the County.
---------------------------------------------------------------------------
I have spent most of my career in Northern Nevada, where hard rock
mining on federal lands is a crucial part of the economy. Most of the
good-paying jobs in Lovelock and Winnemucca, my current and previous
cities of residence, are mining jobs or are directly related to the
mining industry. The 1980's and early 1990's were a great time for
rural Nevada, when strong gold and silver prices brought large mining
operations, good jobs, and prosperity to little Nevada towns that had
not enjoyed these advantages in a long time. The mid-1990's brought
some cutbacks in the industry as prices dropped. In Winnemucca and
towns like it, times were tough for many families as companies reduced
their employment or shuttered mines. People held on and hoped for a
better future, which has now arrived again with higher gold and silver
prices.
For many Nevada communities, employment is up and the future looks
bright, but this is not the case for the City of Lovelock and Pershing
County. Many wage earners in Lovelock work at the Rochester mine, or
have jobs directly related to it, but that mine will close within two
or three years, and there are no mining or other projects in
development that will be able to replace those jobs. The mine has been
a mainstay in the County for twenty years, even during the low metals
prices of the 1990's, but its resources are mined out. A lot of people
in Lovelock do not remember what things were like before the Rochester
mine opened; the economic dislocation caused by its closure will be
traumatic.
The closure of the Rochester mine is one of the greatest challenges
facing our community, and people are concerned about how to deal with
the dramatic loss of jobs, taxes, and other economic benefits. Some
people certainly will relocate to other mining jobs in other parts of
Nevada or the west (or elsewhere in the world) and will do just fine.
How Lovelock will survive as a community and its future economic
development is important to me and to others who plan to remain there.
In a larger sense, how Pershing County reacts to the closure of the
Rochester mine may help other mining communities learn how to survive
the closure of the mines that help sustain their economies. In our
earlier history, these kinds of events created the ghost towns of the
western United States, but times are different and our policies for
dealing with this kind of change have also changed for the better. One
of those policies is the concept of ``sustainable development,'' which
is what the Committee is looking into in this hearing.
I am not an expert on sustainable development, but I believe I have
several ideas of value to contribute to this Subcommittee. I live in a
mining community, and have done so for most of my adult life. My career
as a wildlife biologist (and currently as a consultant on wildlife
management issues) makes me very familiar with federal lands management
in rural Nevada. Finally, my involvement in the various civic affairs
of Pershing County and rural Nevada generally makes sustainable
economic development a topic of utmost importance for me.
The most important fact to know about Northern Nevada is that it is
overwhelmingly owned by the federal government. Exactly 91.6 percent of
the land in Pershing County is federally owned, and most of it is
managed by the Bureau of Land Management. Pershing County is large as
counties go--about 6,037 square miles or 3,803,680 acres--with long
distances between developed location. Mr. Chairman, that is 1000 square
miles larger than the State of Connecticut. There is only one city of
any size--Lovelock--which is surrounded by federal land. The county is
sparsely populated; there are about 6,400 residents, with approximately
half living in Lovelock. My point is that with this much land under the
control of the federal government, there is little chance that Pershing
County can attract economic development (sustainable or otherwise)
without the active cooperation of the federal government.
A second, extremely important fact is that we have very little
infrastructure to offer in the pursuit of economic development
opportunities. The federal lands that dominate the county have roads
only to the extent they were built to service mines, ranching, or other
permitted activities on those lands. Most of Pershing County is
roadless, has no access to cell signals or other telecommunications and
no water or power.
A story from my experience as a consultant illustrates very well
how these two facts work together to control what can and cannot be
done in rural Nevada. A few years ago, a businessman from Texas
contacted me to explore the possibility of installing windmills in
Pershing County to generate power. Nevada, including Pershing County,
has significant wind generation resources. The man asked me to help
identify access roads to particular sites he was interested in for the
windfarm. I explained that there were no roads, that road construction
would be necessary, and that construction would be controlled by the
Bureau of Land Management. Construction of roads would be expensive and
time-consuming, and under the best circumstances would take a year or
more to approve because of the necessity to comply with the National
Environmental Policy Act. Eventually, the lack of infrastructure, the
potential scoping process with various other groups, and the federal
control of the approval process discouraged this investor.
Mr. Chairman, I do not offer this story as criticism of the BLM; to
my knowledge, this man never contacted the BLM or started any process
to obtain approvals necessary to build a wind farm. In his mind, the
hurdles were too formidable. To me, this story simply illustrates that
in Pershing County and places like it, we must have the cooperation and
support of the federal government in order to build our economies.
The other lesson of this story is that infrastructure, where it
exists, is extremely valuable. Where they can be used, these resources
constitute ``sustainable development'' in a very real sense. For
Pershing County, the roads, power lines, buildings and other facilities
at the Rochester mine have immense value if they can be used for
something besides mining. I need to be clear that I am not expert on
Coeur's proposal to haul aggregate and rock from the site. I have some
familiarity with it, but it is not my place to say whether or not it
would be successful. What I can say is that the federal government and
Pershing County should look carefully at any economic development
proposal that can take advantage of the roads, power lines, and other
facilities Coeur built to support its mining operation. If there is any
way to use these valuable assets to create jobs and keep workers in
Pershing County, and comply with federal and state regulations
regarding environmental concerns, we should support it. Opportunities
should be assessed as a viable resource and not discounted merely
because of current regulations. The site-specific nature of each
situation should be examined as compared to ``no remaining
opportunities'' for sustained economic development.
Mr. Chairman, thanks to the rich mineral resources in the State of
Nevada, the mining industry is the biggest source of economic stability
in rural Nevada, providing jobs, benefits, infrastructure, and tax
revenues to communities that otherwise would not thrive. Unfortunately,
all mining operations are finite in their life spans, and in Pershing
County, that truism is about to become a reality. For the citizens of
our County, it is particularly important for the federal government to
figure out just what ``sustainable development'' means in the mining
industry, and what needs to be done to promote it.
______
Mr. Gibbons. Thank you very much, Mr. Jeffress. I
appreciate your testimony and your being here today.
We turn now to Mr. Jim Arnold, professional engineer, Coeur
d'Alene Mines Corporation. Mr. Arnold, welcome. The floor is
yours. We look forward to your testimony.
STATEMENT OF JAMES R. ARNOLD, VICE PRESIDENT FOR TECHNICAL
SERVICES AND PROJECTS, COEUR D'ALENE MINES CORPORATION
Mr. Arnold. Good morning, Mr. Chairman. I appreciate the
opportunity to testify before you and the Subcommittee on the
importance of sustainable development to the mining industry
and to the rural communities that support our industry. My
written testimony has been submitted and I would like to
quickly summarize the key points here.
I've worked for the mining industry for over 30 years and
currently serve as a vice president of technical services for
Coeur d'Alene Mines Corporation. Coeur is the world's largest
primary silver producer, with American operations in Alaska,
Idaho, and Nevada. As a person with long experience in the
hardrock mining industry, I see both challenges and
opportunities in contributing to sustainable development of the
communities we leave behind when our mines close.
The most important challenge facing the mining industry and
the Federal Government is to identify productive post-mining
land uses which must be compatible with Federal and State
closure and reclamation requirements. These sites are often
remote and, in their natural state, are not always amenable to
recreation or other general public access. As challenging as
these obstacles seem, there are also significant opportunities
to reuse closed mine sites. Such sites are served by excellent
roads across Federal lands, usually constructed by the mining
companies at great expense. Similarly, mines typically have
invested significantly in running power lines to their
facilities and have extensive buildings and infrastructure that
could be employed in a post-mining land use.
Fortunately, we have great opportunity at Rochester mine in
Pershing County to demonstrate sustainable development through
an innovative post-mining land use proposal. The Rochester mine
is nearing the end of its life. Currently the mine employs
about 250 people with an average salary of $55,000 a year.
Another 375 jobs in the State of Nevada are directly dependent
on this mine. The mine is the largest private employer in
Pershing County, and in almost 20 years of operation has paid
$30 million in Federal, State, and local taxes.
Coeur has tested the rock extracted from the Rochester mine
and found that it is an ideal source of aggregate, small and
large rocks, and boulders. These materials are in high demand
in California, where they must be blasted or mined from
increasingly scarce, hard-to-locate, and hard-to-permit
quarries. By contrast, the material has already been blasted at
the Rochester mine and is useless waste material if left there.
Coeur's project is an excellent opportunity to place this waste
material to a sound and valuable beneficial use. Let me make
clear that this material is rock, not leached ore. Coeur has
conducted extensive testing to the rock and there is no concern
about creating environmental hazards or moving environmental
issues from Rochester to other sites.
Everything we know so far suggests that this could be a
very successful business with the potential to create long-term
employment opportunities for Pershing County. Unfortunately,
this operation will not replace all 250 mining jobs that will
be lost when the mining operation closes; however, it will
replace a good portion of them at the start, and the operation
has the potential to grow into something much larger. The
infrastructure and the site's proximity to I-80 create other
possibilities as well, including a potential wind farm, wild
plant seed harvesting, grazing, and many other opportunities.
Some people may ask why not just reclaim and close the mine
pursuant to Federal and State law and leave it alone? The most
important reason is that we are committed to our employees and
the future of this community. Second, Coeur is sincerely
interested in showing how sustainable development can work.
Finally, Coeur will be involved with the site well into the
future as it fulfills its legal and ethical responsibilities to
close and reclaim the site. Why not use a great opportunity to
keep the resources of the site working for the people of
Pershing County?
An important part of Coeur's proposal is to acquire
approximately 7,000 acres of land at the mine proximate to the
mining claims within the so-called Checkerboard. These Federal
lands are isolated, difficult and expensive for the BLM to
manage, and the BLM has already marked them for consolidation
and disposal. We have had discussions with the BLM
representatives in Nevada, who have expressed support for this
land consolidation.
Mr. Chairman, I know that the future economic health of
rural Nevada communities is important to you and to this
Subcommittee, and we are grateful for your efforts to help
Coeur-Rochester make a model of sustainable development.
Thank you.
[The prepared statement of Mr. Arnold follows:]
Statement of Jim Arnold, Vice President of Technical Services,
Coeur d'Alene Mines Corporation
I appreciate the opportunity to testify before the Subcommittee on
the importance of sustainable development to the mining industry and
the rural communities that support our industry. I would also like to
thank the Subcommittee members for all the work that you have done to
highlight this important issue, including the field hearing you held on
this subject last year in Reno, Nevada.
My entire career has been in the mining industry. I have worked in
the industry for over 30 years, and my background is primarily in
operations and engineering. I have served as General Manager for
several mines and development projects throughout the United States
while working for a variety of mining companies, including Gold Fields
Mining Corporation, Santa Fe Pacific Gold Corporation, and Kinross.
Before joining Coeur d'Alene Mines Corporation, I served as Principal,
President and CEO of Knight Piesold & Co. in Denver, CO. I am a former
Chairman and Board Member of the Nevada Mining Association (``NvMA''),
and served as Chairman of NvMA's Environmental and Wildlife
Subcommittees, during the time when the State of Nevada developed and
amended many of its environmental and wildlife protection regulations
specific to mining. I am a member of the Society for Mining,
Metallurgy, and Exploration (``SME''), and will serve as the Society's
president in 2007. In 2000, I was honored as SME's Mill Man of
Distinction and was the recipient of the Society's Ivan Rahn Award for
my contributions to education and professional development. I have
authored over twenty-five technical publications. I hold a BS in
Metallurgical Engineering from the University of Idaho and an MS in
Engineering Management from the University of Missouri-Rolla.
I currently serve as Vice President of Technical Services for Coeur
d'Alene Mines. Coeur is the world's largest primary silver producer. We
are an American mining company with properties in Alaska, Idaho, and
Nevada. Coeur also operates in Australia, and has a new generation of
low-cost silver operations expanding or coming into production in
Chile, Bolivia, and Argentina.
Policymakers have been using the term ``sustainable development''
at least since the United Nations'' Earth Summit in 1992. At that
meeting, and at numerous international gatherings since, the concept
has been endlessly discussed, and volumes have been written on the
subject. The United Nations defines sustainable development as
``development that meets the needs of the present without compromising
the ability of future generations to meet their own needs.'' At its
base, this is a doctrine of measured growth that should take into
account all of the downstream consequences on community and the
environment of a development.
Implementing the concept of ``sustainable development'' in the
mining industry presents unique challenges. It is an inescapable fact
that minerals are scarce and they are a nonrenewable resource. Even an
exceptionally large ore body will be exhausted at some point, and the
community that grows up around and depends on it for resources and jobs
will have to seek them elsewhere. Thus, sustainable development in
mining has to contend from the beginning with the finite nature of the
resource and has to look beyond the economic life of any particular
project. Along with a commitment to ensure an environmentally stable
and clean site once a mining operation is closed, sustainable
development in mining has to take into account local communities and
their long-term economic and social welfare.
As the Chairman knows, many rural communities in the Western United
States are islands surrounded by federal lands. Local governments have
little control over how these lands are used and developed. This
reality creates an additional challenge for communities hoping for
stable post-mining economic development. The preponderance of federal
lands means that local governments have little ability or opportunity
to attract new business or to arrange for roads, power and the other
infrastructure these businesses would need.
As a person with long experience in the hardrock mining industry, I
see both challenges and opportunities in contributing to the
sustainable development of the communities we leave behind when our
mines close. The most important challenge facing the mining industry
and the federal government is to identify productive post-mining land
uses for closed mines. Productive reuse can be difficult because the
land has been devoted to mining, which leaves permanent structures such
as mine pits, waste rock piles, heap leach pads, or tailings ponds that
must be worked around, even after reclamation. Federal and state laws
require extensive and expensive closure and reclamation of these
facilities for environmental and safety reasons, and any post-mining
land use has to be compatible with maintaining these requirements.
These sites are often remote. And, in their natural state, they are not
always safe for recreation or other general public access.
As challenging as these obstacles seem, there are also significant
opportunities to reuse closed mine sites. Because access is so
important, these sites are served by excellent roads across federal
lands, usually constructed by mining companies at great expense to
carry traffic to, from, and around the mine sites. Similarly, mines
typically have invested significantly in running power lines to their
facilities. The sites have extensive office, laboratory, mechanical,
and industrial buildings that could be employed in a post-mining use.
Without a post-mining use, these expensive and valuable facilities will
be demolished and reclaimed and will serve no further useful purpose.
With the right planning and forethought, they could be placed in the
service of post-mining land uses that will sustain jobs and economic
development for communities long after mine closure.
Mr. Chairman, I recognize that the reuse of closed mines is not
going to work in every case in the cause of sustainable development. In
some cases, the mine site, once closed and properly reclaimed, is best
secured and left alone. This is a decision that must be made on a case-
by-case basis, looking at development opportunities, environmental
impacts, and other conditions. Because mines always close, mining
companies must be prepared to think of sustainable development not only
as post-mining land use but as long-term community economic development
that has little or nothing to do with the mine site or mining. In my
opinion, these are the hardest questions to resolve about sustainable
development.
Fortunately, we have a great opportunity at our Rochester Mine in
Nevada to demonstrate sustainable development through an innovative
post-mining land use. We appreciate the Chairman's interest in this
project, and believe it could help illustrate valuable sustainable
development concepts as they can be applied practically in the mining
industry.
The Coeur Rochester Mine in Pershing County, Nevada is nearing the
end of its life. The mine has operated successfully for almost twenty
years, and has been the source of jobs and other economic benefits to
the County and the Cities of Lovelock, Fallon, and Winnemucca, Nevada,
for a long time. Currently, the mine employs about 250 people, with an
average wage of $55,000 annually, and another 375 jobs in the State are
directly dependent on the mine. The Mine is the largest private
employer in Pershing County. In its almost twenty years of operation,
federal, state, and local governments have received $30,000,000 in tax
revenues from the mine.
Through exploration and discovery of nearby silver and gold
reserves, Coeur has extended the predicted mine life several times, but
we believe at this point that the mine's reserves are mostly exhausted,
and Coeur is preparing for closure. The BLM is currently conducting an
environmental impact statement on the closure/reclamation.
Rochester's employees are among the most prominent members of the
communities of Lovelock, Fallon, and Winnemucca; they have a combined
total of over 320 years of service to their communities, including
volunteering as members of the local fire department and ambulance
crews, serving as elected public officials, and coaching little league
teams in the area. For the first time in almost a generation, the
people of Pershing County face devastating economic impacts that will
come with Coeur's exit from the business life of the community.
These facts illustrate acutely how much Pershing County stands to
benefit from innovative thinking about sustainable development, and
conversely, how the County will suffer if we do not find a way to keep
using the resources of Rochester to create jobs and economic
opportunity. Coeur is grateful to the County and its people for their
role in the mine's success, and is anxious to give back to them in a
way that will provide opportunities for Pershing County's future.
If successful, Coeur's sustainable development proposal will
replace a significant portion of the mining jobs that will be lost, and
has the potential to provide the County with a source of long term
economic development. Coeur has tested the rock extracted from the
Rochester mine during its operation and has found that it is an ideal
source of aggregate, small and large rocks, and boulders. Aggregate is
used as roadbed material, in concrete construction projects, as fill,
in rip-rapping, and for other purposes. Armor stone and boulders are
used in rip-rapping and other channel armoring projects. These
materials are in high demand in California, where they must be blasted
and/or mined from increasingly scarce, hard-to-locate, and hard-to-
permit quarries. By contrast, the material has already been blasted at
the Rochester mine as a part of the mining operation, and is useless
waste material if left there. Coeur's project is an excellent
opportunity to place this waste material to a sound and valuable
beneficial use.
Let me make clear that the material we propose to ship to
California (and possibly other markets) is rock. It has not been
leached or treated with chemicals, and does not have acid-generating
potential, so there is no concern about creating environmental hazards
or moving environmental issues from Rochester to other sites. Coeur has
conducted extensive testing of the materials, both as part of its
mining operations and in development of the current proposal.
Everything we know so far suggests that this could be a very
successful business, with the potential to create long-term employment
opportunities for Pershing County. There is enough waste rock
stockpiled at the site to supplement current and projected future
demand from California for some rock sizes as much as 100 years (or
more). Unfortunately, this operation will not replace all 250 mining
jobs that will be lost when the mining operation closes. However, it
will replace a good portion of them at the start, and the operation has
the potential to grow into something much larger, with more jobs and
benefits for Pershing County residents.
One potential for future development would be to accept non-
hazardous solid waste--either municipal, industrial, or construction
debris--from Reno, Sparks, northern California or other places. The
waste could be hauled in rail cars returning from carrying loads of
aggregate or boulders. This arrangement--where it is feasible--would
cut the cost of transportation in half. Some aspects of the Rochester
site make it promising for solid waste management. Solid waste from
mining already will be managed there. Coeur has studied the site
extensively to prepare and conduct mining operations and therefore
already knows a good deal about ground water, surface drainage,
indigenous wildlife, historic sites, and other issues that would be
important in citing a landfill operation. However, it is important to
emphasize here that solid waste management is a potential future
development, not one that Coeur is proposing currently. Before Coeur
could accept solid waste at the site, it would have to obtain
appropriate federal, state, and local permits.
The electric, water, transportation, and other infrastructure at
the site create other possibilities. Conditions may be favorable for a
wind farm or other renewable energy technology. The site's proximity to
Interstate 80 may provide other opportunities. Coeur continues to
investigate ways to maximize use of the reclaimed mine site.
Some people may ask why Coeur would be interested in undertaking a
project like this. Why not just reclaim and close the mine pursuant to
federal and state law, and leave it alone? The most important reason
for our interest is that we are committed to our employees and to this
community. There is an opportunity here to contribute to the future of
Pershing County. Second, Coeur is sincerely interested in showing how
sustainable development can work, but like other mining companies,
struggles for ways to realize its potential. As I have already said, it
is not easy to identify and pursue post-mining land uses, but this site
presents a great opportunity to do just that.
Finally, from a practical perspective, Coeur will be closing and
reclaiming the Rochester site for years to come. To comply with
numerous federal and state legal requirements, Coeur will demolish
buildings, reclaim roads, regrade, revegetate and reclaim waste rock
sites, rinse and revegetate leach pads, and so on. These activities
will cost Coeur millions of dollars, and long term monitoring and care
will last for decades. With the completion of reclamation, the chance
to use roads and other infrastructure at the site will be diminished.
Coeur's proposal to transport aggregate, rocks and boulders from
the Rochester site would take advantage of this expensive
infrastructure and would use some of the materials and structures that
otherwise would have to be reclaimed. Accordingly, certain of the
reclamation and closure activities and costs could become unnecessary,
although Coeur does not anticipate substantial savings on closure and
reclamation. Most importantly, Coeur will be involved with the site
well into the future as it fulfills its legal and ethical
responsibilities to close and reclaim the site. Why not use a great
opportunity to keep the resources of the site working for the people of
Pershing County?
Finally, an important part of Coeur's proposal is to acquire
approximately 7,000 acres of land at the mine proximate to mining
claims. Coeur Rochester is responsible for the mining activities that
have taken place there and for closure and reclamation, so the
acquisition makes sense from that perspective.
Further, the land lies within the so-called ``Checkerboard,'' the
swath of federal land extending across Northern Nevada which is
interspersed with private lands creating a ``checkerboard'' pattern.
The land position was created when the federal government granted lands
along the pathway of the transcontinental railroad in the 19th Century.
The remaining federal lands are isolated, and difficult and expensive
to manage, and so the BLM has marked them in its applicable land use
plans for consolidation or disposal. We have already had discussions
with BLM representatives in Nevada, who have expressed preliminary
support for the land consolidation.
Finally, the disposal of the lands would generate badly needed
revenues. Because of the size of the land disposal, federal legislation
is necessary to accomplish it, and the disposition of sale proceeds
would be up to Congress. We propose that at least some portion of the
proceeds be provided to Pershing County to assist in its economic
development efforts.
Mr. Chairman, I appreciate very much the opportunity to present my
ideas about sustainable development to the Subcommittee and to speak on
behalf of Coeur. I know that the future economic health of rural Nevada
communities is important to you and to this Subcommittee, and we are
grateful for your efforts to help Coeur make Rochester a model of
sustainable development.
______
Mr. Gibbons. Thank you very much, Mr. Arnold. We
appreciate, as always, your presence here today and your
testimony.
We will turn now to Mr. Tom Harrington, Assistant Manager
for the Jefferson Local Development Corporation. Mr.
Harrington, welcome to the Committee. If this is your first
time, we are happy to have you. The floor is yours. We look
forward to your testimony.
STATEMENT OF TOM HARRINGTON, ASSISTANT MANAGER,
JEFFERSON LOCAL DEVELOPMENT CORPORATION
Mr. Harrington. Thank you, sir.
Good morning, Chairman Gibbons and members of the
Subcommittee. My name is Tom Harrington. It is a pleasure to be
here today and provide you with information on a sustainable
development journey between the Golden Sunlight Mine and the
community at Whitehall, Montana. The community of Whitehall is
located in southwest Montana, adjacent to the Golden Sunlight
Mine. The Golden Sunlight Mine is an open-pit gold mine that
has been in operation since 1982.
The need to fully understand and assess the environmental,
social, and economic impacts on a local community and to
mitigate these impacts has become an essential aspect of
successful mining today. Many quantifiable environmental
standards exist in the regulatory guidelines and operating
permits of the mine. Golden Sunlight has had great success with
steep slope reclamation and other reclamation projects. The
slide show is an example of steep slope.
It is also in a very visible location along a major
interstate highway that impacts millions of passers-by annually
and visually demonstrates how good reclamation practices take
care of the environment. The next three slides show shots from
the interstate, local highway, and the frontage road.
However, when you look at the social and economic
standards, there are not clear checklists that rate the
effectiveness of the Community Sustainability Program.
Therefore, it's imperative that corporate leadership believes
and is committed to the principles of sustainable development.
There are five key areas that we identify as successes.
One is teamwork, getting the local leadership and area
stakeholders involved early in the process. A coalition of
stakeholders was organized, called the Community Transition
Advisory Committee. These stakeholders assess community issues
and concerns and have been directly involved in the discussions
relating to the mine. The membership is comprised of a cross
section of the local area. The president of a local bank is a
member, county commissioner, the mayor, local development
corporation representative, a member of the Montana Fish,
Wildlife, and Parks Commission, and a member of the local
Chamber. This open and direct communication link between the
community and the mine facilitated dialogue and future economic
development opportunities.
Second was information flow. The flow of information up,
down, and across all lines of communication needed to be
functional and effective. The key to our success was an open
and honest flow of information on many aspects of the mine and
allowed the CTAC members to become a direct conduit into the
community.
Third was public relations. Keeping everyone informed as
new information becomes available is always an ongoing
challenge. We implemented public meetings, routine news
articles, made sure that the members were easily accessible to
the community.
Number four was tenacity. We found that nothing comes easy,
and commitment and dedication will increase the probability of
success.
And the last, remain positive. The world is a place of
constant change with many dynamic situations. It's important to
look for the good in all situations and the silver linings.
Now, when you get a community program that's working in
concert with the mine, it directly benefits the community and
the mine in both tangible and intangible ways. For example, in
the 2003 legislative session, we saw several changes in Montana
law. Let me just highlight one. In the past, mining operations
were required to return their sites back to pre-mining
conditions upon closure. This meant millions of infrastructure
were removed at great expense to the mine. A new law allows
mining operations to enter into an agreement with economic
development organizations to use this infrastructure to
mitigate the economic impact of a mine closure.
Other areas of the mine that directly impacted the
community was in providing equipment for search and rescue,
medical equipment, helping with fires and floods, donating
computers, contributing thousands of dollars to college
scholarships, education field days, developing a community fish
pond, and also helping with the Community Endowment Program.
There is also a local grant program and business loan program
that is comprised of about $800,000 that's used to help support
the community, and this is solely from tax dollars generated by
the Golden Sunlight Mine.
We have also donated property for a business park, shown on
the slide here, that will help with generating jobs and tax
base. They are currently pursuing wind energy development at
their site, which is a great story to tell about how an
extractive industry that is dealing with a declining resource
is able to utilize existing infrastructure to develop renewable
energy that will benefit the community in the long run.
The culture and attitude of the mine carries over into many
different facets of the community. Things like company safety
procedures become implanted into community programs and
operations. Cultural integration also has an added benefit of
educating others from outside the mining community. This
contact with people not familiar with mining can have a
positive future impact on mining legislation and laws as we
create a better-informed voter.
In conclusion, sustainable development is here to stay in
the mining industry. It's more than just talking the talk; it's
about understanding the benefits and actually going out and
walking the walk. As in the words of a former Golden Sunlight
Mine general manager, one of the most successful things we have
done in preparing for closure is involving the community.
Anytime you do that, you generate a lot more trust. Through
this committee, the community of Whitehall gives the mine its
license to operate.
Thank you.
[The prepared statement of Mr. Harrington follows:]
Statement of Tom Harrington, Assistant Manager,
Jefferson Local Development Corporation
Good morning Chairman Gibbons and Members of the Subcommittee:
My name is Tom Harrington, and it is a pleasure to be here today
and provide you with information about the on-going Sustainable
Development journey between the Golden Sunlight Mine and the community
of Whitehall, Montana.
Orient you to the area: (Show the MT Map slide and the GSM open pit
slide)
As a local economic developer my focus is on creating jobs and tax
base in Jefferson County, Montana focusing on the community of
Whitehall where the Golden Sunlight Mine has been in existence since
1982. We all know the ``boom and bust'' tradition of mining from a
historical perspective. Montana, known as the ``Treasure'' State, has a
rich mining heritage as evidenced by our state seal that has the words
inscribed ``Oro y Plata'' (Gold and Silver).
In our state, many community economies thrived as mining operations
started, grew and developed. As the economic life of the mining
operation eventually played out, the mine inevitably slowed-down and
eventually closed resulting in devastating local economic impacts in
many cases. Many of these once thriving communities, (to name a few:
Marysville, Silver Star, Elkhorn, Virginia City, Bannock, Anaconda,
Garnet, and Highland City,) either closed or dwindled into obscurity
with the only tangible legacy of mining being landscape scars and
abandoned buildings. These communities and countless others are
examples of the impact of the mining culture of the past.
Today the mining industry is undergoing a cultural shift and
philosophical change related to mining in the modern day world. The
need to fully understand and assess the environmental, social, and
economic impacts on the local community and to mitigate these impacts
has become an essential aspect of successful mining. This is known as
``Sustainable Development''. Jefferson County has a heavy reliance on
mining with 3 of 4 of the top taxpayers being mining firms. The need to
implement an effective Sustainable Development program is essential to
maintaining the current quality of life of the area residents. The
assessment of community needs will vary from location to location
depending on the existing environment. Mining organizations today need
to be able to assess a community profile and adequately address area
stakeholder and NGO concerns through the life of a mining operation.
The information age and computer technology has created intelligent and
astute area stakeholders and sophisticated NGO's.
The challenge for Sustainable Development is how to measure the
program effectiveness. Many quantifiable environmental standards exist
in regulatory guidelines and operating permit requirements to help
guide us in how to do it right. Golden Sunlight has had great success
with steep slope reclamation (show slide of steep slope reclamation)
and has been recognized for their outstanding reclamation program. To
date they reclaimed over 1060 acres at a cost in excess of $20 million
dollars and still have a $54 million dollar bond in place. (show slide
of view of GSM Whitehall) Golden Sunlight's visible location along a
major interstate highway impacts millions of by-passers annually and
visually demonstrates how good reclamation practice takes care of the
environment.
However, when you look at the social and economic standards there
are no industry road maps or checklists that rate the effectiveness of
a community sustainability program. What this means is the criteria and
measurement of these key components of sustainable development must
come from the corporate leadership. This is more than just establishing
a formal corporate policy or philosophy that is published in the
corporate literature. It is imperative the corporate leadership
believes and is committed to the principles of Sustainable Development
and understands the relationship it has to shareholder value. We are
fortunate that Golden Sunlight's parent company, Placer Dome USA, has a
strong commitment to Sustainable Development and community partnerships
that have been implemented by the Golden Sunlight Mine. Without this
active leadership, commitment and focus, the process of Sustainable
Development would likely have been doomed to fail at the mine operator
level. Ultimately, the local area stakeholders and community will
validate and be the true measure of success of a Sustainability
Program.
So, how do we implement a successful community Sustainable
Development program? Several years ago the Golden Sunlight Mine was
anticipating mine closure. Then Mine General Manager Doug Bailey had a
vision to get the community involved in the process of how to mitigate
the looming economic impact. Our lessons learned during this journey
identified five key areas that helped set the stage for success. I
would like to briefly highlight the importance of these areas.
1. Teamwork: You must get the local mine leadership and key local
area stakeholders involved as early in the process as possible. In our
case, a coalition of area stakeholders was organized, called the
Community Advisory Transition Committee (CTAC). These key stakeholders
have met monthly to address community issues and concerns and have been
directly involved in key discussions relating to the mine. CTAC members
represent a broad cross-section of the area including the president of
the local bank, a County Commissioner, the Mayor, a local development
corporation representative who also has his own environmental
consulting firm, a member of the Montana Fish, Wildlife, and Parks
Commission who is also a local business owner, and the president of the
local Chamber of Commerce. The primary focus of this group has always
been to sustain existing mining operations while planning for the long-
term. This open and direct communications link between the community
and the mine facilitated dialogue on future mine asset re-utilization,
economic development opportunities and mine strategies.
2. Information Flow: It became evident the flow of information up,
down, and across all lines of communication needed to be functional and
effective. The issue of what and how much information a mine is willing
to disclose to area stakeholders on current operations will always be
an item of debate. A large key to our success was an open and honest
flow of information on many aspects of the mine operation that allowed
the CTAC members to be a conduit to the community. It is also important
to remember that bad news doesn't get better with age and these key
community leaders can be a valuable resource to existing operations.
The aspect of information flow is an essential part of developing a
relationship that is built on trust and candor.
3. Public Relations: Keeping everyone informed, especially the
public, as new information becomes available is an on-going challenge.
The implementation of public meetings, routine newspaper articles, and
the easy accessibility to the team members was essential. Periodic
sampling of the local community on how information flow is working and
how current perceptions integrate with the team direction and actions
is essential to avoid tunnel vision. Using an outside agency to survey
and poll the community about on-going operations, decisions, and ideas
can help keep the focus. We did a community survey that validated the
committee direction was on track and in concert with the community.
4. Tenacity: Good projects and ideas will always have strong
competition. We found that nothing comes easy and commitment and
dedication will increase the probability of success. As challenges
developed, the committee was able to analyze and assess impacts and
implement alternative plans by selecting the next best course of
action.
5. Remain Positive: The world is a place of constant change with
many dynamic situations and it is imperative to always look for the
good aspects and silver linings. Positive attitudes create a synergy
that gets people wanting to be actively involved in a project and
sustains momentum. It is important for the key members of the team to
be optimistic and forward looking.
When you get a community program that is working in concert with
the existing mine operation, it creates a harmony and spirit of
cooperation that directly benefits the community and the mine operation
in both tangible and intangible ways. There are several positive
effects of the GSM CTAC process that directly benefited GSM and the
overall mining industry in Montana. Just a few examples:
1. The 2003 legislative session saw some significant changes to
existing state law that have had a positive impact on mining. A couple
of highlights are:
(a) In the past, mining operations were required to return
their sites back to as close to pre-mining operations as
possible and were included as a part of the on-going bonding
process. This meant millions of dollars of useful
infrastructure was removed at the end of mining at a tremendous
cost to a mining company. A bill was introduced and passed that
changed existing law to allow mine operations to enter into an
agreement with economic development organizations that could
use this infrastructure to mitigate the economic impact from
mine closure. This bill also allows existing mine operations to
decrease their existing bond requirement.
(b) Change of venue for court review--An action to challenge
the issuance of a certificate must now be brought in the county
in which the activity occurred. In the past, litigation issues
were filed in district courts that may have exhibited more
favorable outcomes toward certain causes. Now, litigation must
be filed in the county where the operation is located.
2. The integration of the Golden Sunlight Mine into the community
over the past twenty years has had far reaching impacts. They are an
active partner and have been directly involved with the community in
many different arenas. A few areas that they have directly impacted are
medical equipment purchases, search and rescue equipment donations,
assisted the library expansion program, helped with equipment and
manpower during local flooding, assisted with nearby wild land fire
fighting, donated computers and musical instruments to area schools,
provided resources to rebuild the school roof, donate thousands of
dollars each year for college scholarships, have education field days
at the mine site, work with academia on testing and research, allow
recreational use of their non-mining property at no charge, provided
property for an outdoor Lewis and Clark theater play, assisted with a
wild turkey stocking program that now allows a turkey hunting season,
support local sportsman organizations, contribute annually to the local
baseball programs, donated land and assisted with the development of a
family fish pond, and provided the initial resources for a community
endowment program. There is also a local grant program and business
loan fund that has in excess of $800,000 that is comprised of tax
dollars from the Golden Sunlight Mine. These tax dollars converted to
grants have allowed the local community to improve the rodeo grounds,
baseball fields, build soccer fields, expand the local library, help an
outdoor theater group, assist a local brain injury treatment facility,
and assisted a business park develop infrastructure. Two major projects
being worked are the Sunlight Business Park development and wind energy
development. Golden Sunlight Mine donated 200-acres of their property
along the interstate for the development on a business park that would
allow the creation of jobs and tax base. They are also pursuing wind
energy development on site that is a great story about extractive
industry that has a declining resource utilizing existing mine
infrastructure to develop a renewable energy source that benefits the
local community.
As you look at the Golden Sunlight Mine over the past twenty years
and talk with area residents, you see a definite trend that the mine is
truly integrated into all aspects of the community. When you further
analyze the relationship you realize the community is also comprised of
many mine employees and their immediate and extended families. The
culture and attitude of the mine carries over into many different
facets of the community culture. You see miners and family members as
part of the PTA, school board, local government, youth programs, and
charitable fundraisers. They are the coaches of local sports programs,
leaders in scouting programs, involved with the local 4-H, and
participate in many non-profit and civic groups. This direct community
involvement by mine employees and family actually has a significant
impact on the local culture and ideals. You see the positive impact of
the mine culture being permeated throughout the community culture.
Things like the company safety procedures becoming implanted in many
local community operations and functions. Miners have a strong work
ethic that is instilled into our schools and many community programs.
These positive factors helped establish a strong base for future
economic development opportunities. This cultural integration also has
an added benefit of educating others from the non-mining public as they
come in contact with these mining individuals while participating in
these many activities. This routine contact with people not familiar
with mining can have a tremendous positive future impact on mining
legislation and laws. These better-informed voters will be able to make
good decisions as mining issues come up for voting.
In conclusion, Sustainable Development is here to stay in the
mining industry. It is more than just talking the talk--it is about
understanding the benefits and actually walking the walk. As in the
words of a former Golden Sunlight Mine General Manger, ``One of the
most successful things we have done in preparing for closure is
involving the community. Any time you do that, you generate a lot more
trust. Through this committee, the community of Whitehall gives this
mine its license to operate.''
Mining companies that fully understand, embrace, and implement
Sustainable Development in future operations will be the industry
leaders. Their past performance will pave the way for future success as
new mining ventures are explored and developed. The commitment to
Sustainable Development should reward these high performance
organizations with reduced costs that will directly correlate to
increased shareholder value.
______
Mr. Gibbons. Thank you very much, Mr. Harrington. We
appreciate your presence here and your testimony.
We will turn now to Mr. Courtland Lee. Mr. Lee, welcome to
the Committee. We look forward to your testimony. The floor is
yours.
STATEMENT OF L. COURTLAND LEE, GEOLOGIST
Mr. Lee. Good morning. I am going to take you up on your
offer to ramble a little bit here and submit my testimony to
the record.
I'm Courtland Lee. I've had a long involvement with these
issues. I even worked on this committee back in 1980. With my
graduate degree, School of Mines in Arizona, I'm familiar
particularly with the large copper pits in Arizona. In fact,
this kind of reminds me of the plight of trying to bring
attention to this particular issue. Mo Udall used to tell a
story about a rich man trying to board his horse--only this
time ``the horse'' is these issues of mine reclamation. And he
goes down the road and he sees this farmer, and he says can I
board my horse in your place. He says, sure, it's $50 a month
and we keep the manure. And the guy says that's a little more
than I wanted to pay.
So he sees this other farmer a little down the road and he
goes and talks to him. And he says, How much are you going to
charge me to board my horse here? And he says, well, it's $40 a
month and of course we'll keep the manure. And so he says,
well, I'm making progress. That is a ramshackle old house up
that dirt road there. I wonder what he'll charge.
So he goes up to this guy and the guy says, well, I'll tell
you what, I'll board your horse for $5 a month. And the guy
says, well, sign me up. As he's signing the paper, he says,
just kind of curious. The other people all said they'd keep the
manure. How come you don't make that stipulation? And he says,
well, mister, at $5 a month there ain't gonna be much manure.
I think that's sort of the public attention to this issue.
I just walked by the hall, all these fallen soldiers in Iraq
for our strategic interests. And if you allocate the Defense
Department budget over some of the costs to import certain
commodities--you know, in Nevada you're left all to yourself
and you allocate the costs only on the natural resources, not
the big picture. And I think that's some of the problem.
I've been Chairman of the Sand and Gravel Board in Prince
George's County. There's a 2-square-mile mine within 6 miles of
where we sit. Built a lot of these buildings, all the
sidewalks, the gravel that built the Beltway. And it's very
interesting, because there's so much demand for land they by
and large reclaim them into commercial use, housing
developments. There's an Izaak Walton League not more than 5
miles from here that has a water park in a reclaimed sand and
gravel mine.
I got into the azalea business. I'm kind of a farmer at my
age. I've enjoyed getting out of all the intensity of these
issues. But there's a great horticultural site, I think it's in
the Northwest--it may be in Canada, even--but it's a limestone
quarry that's just simply left unreclaimed. In the bottom, it
has one of the most unique gardens in North America. People
come from thousands of miles to go through this garden, which
is basically a quarry that's unreclaimed.
There's a lot of interesting and innovative things you can
do to sustain development after you mine it, because you're
kind of left with a very unusual piece of geography.
My issues that I worked on many years were broader issues
of--and I guess I'm witness to the decline of mineral
exploration and new mining in the United States. I worked with
a guy named Gary Bennethum when I was in Interior, and we came
up with this article, ``Is Our Account Overdrawn?'' At the time
we wrote this article in 1974, 1975, the official Government
statistic for the amount of lands that were off-limits to
mineral development was 6 percent. And we came up with, I
forget, about 53 percent for hardrock and 60 percent for
leasables. And when you have the official Government number at
6 percent and we--our numbers have held up, by the way, over
the years--we came up with over half the lands were withdrawn.
And it's worse now than it was then. That makes you wonder
about the attention given to the management of the Nation's
mineral resources.
And to sort of parallel that--and I've attached these in
attachments--I got interested in the leasable minerals. And of
course from Nevada, you're mostly hardrock, although I'm sure
you have some potash--these large bedded deposits. And they
came about going back to Teddy Roosevelt and even Taft, they
withdrew all the lands in the United States. Right through
World War I we had no way to allow anybody to drill for oil and
gas or phosphate. And at the time of World War I, we imported
all our potash from Germany and----
I knew I'd go over the time. We imported our potash from
Germany. Well, we went to war with Germany, and the potash shot
right up to $400 a ton, a great hardship on farmers. And here
we had some inklings of potash in New Mexico, but the
Government had no process to transfer that to people to mine.
One last story. When this article broke, we had a senior
legislator came in from somewhere out West, and he talked about
the July of 1941. The military went to the Interior Department
to try to put a radar base on the Hawaiian National Park, which
would give them 200 or 300 miles observation, because of the
height, out over the ocean. And there were hearings and fights
over that right up through December. Now, what if they had put
that radar station, what if they had allowed that? What was the
cost? What was the opportunity cost of that withdrawal versus a
small radar base? And of course history, in that case, it was
extremely high.
That's the end of my statement. I'm over time.
[The prepared statement of Mr. Lee follows:]
Statement of L. Courtland Lee, Consulting Geologist,
Appalachian Gemstones, Boxlee Azalea Farm
It is a pleasure to testify before this committee. I have worked
here on staff and later in a number of capacities, mostly relating to
mining and land use, exploration, and a number of legislative efforts.
I carefully read the title of this hearing which was given to me as,
``Sustainable Development Opportunities in Mining Communities, Part
II.''
There are always development opportunities as we are limited only
by our imagination, influenced perhaps by a number of other factors. I
will address the sustainable mineral opportunities issue first. Many
mines have had amazing longevity, large mines and small mines. Often
the demand for a commodity will wax and wane depending on the needs for
the economy of the time. Throughout U.S. history, miners roamed the
west from one mine employment site to another as new mines were opened
and old ones closed, or new uses of old commodities injected life into
mineral properties. In recent years there has been a trend away from
sustained mineral use toward recreation, home sites, ski villages, etc.
Much of this activity has been on mineral land since it is the only way
to get title to remote federal land since the demise of an assortment
of homestead laws. Ownership is achieved through a patented or even on
occasion an unpatented mining claim. This may be good for homebuilding
but it is not good for long term mineral use and employment based on
that use.
New concepts in ore deposition can lead to discovery of a whole new
mine, or even a use of an accessory mineral may overtake the original
mineral, for example porphyry copper on old gold mines.
During the last decade, there have appeared to me alarming new
trends. There has been a breakdown in the working of the mining law,
and land access is restricted or denied over much of the national
resource lands. This has occurred under a strong dollar, cheap foreign
imports, and an explosion in popular environmentalism which in this
case I would define as organized anti-exploration and mining. As costs
to operate have gone up, opportunities in mineral employment have left
the country, and I might add, many of the mineral employment centers
have left as well. This is also a significant factor in our balance of
trade deficits.
Western mineral development is largely public land development and
eastern mineral development is private mineral development. Of course
in public land states where patented mining claims have been issued
these islands have to some extent become private land.
The breakdown of the mining law and an atmosphere of hostility
toward mining directly effects opportunity for sustained development in
all these communities. I believe it also affects the competitiveness of
the entire American economy as America gives up once domestic sources
for raw materials and relies on other nations, some friendly some not,
and some that will change. This is not to say I favor protectionism,
just a level playing field. Many mineral resources have to develop
markets for their product. Once that market is taken over by a foreign
competitor it may not come back.
Government likes definite numbers: acreage of wilderness,
employment, production numbers, tax revenue, etc. This is
understandable. However, it rarely if ever accounts for the ingenuity
of an idea, or the potential of discovery. Over the years attempts have
been made at quantifying undiscovered minerals using probable,
possible, or inferred categories to describe various known states of
guessed at mineral reserves. However, if they can't be tested, they
don't count, and if mineral land is placed off limits through dejure or
defacto restrictions, the potential will remain unknown and will fail
to sway a land use board against a known value, even one angry voice
raised in favor of no change.
If the topic of this hearing is sustainability of mineral
development and employment in an area, under today's legal land use
pattern, I would say it is unlikely development can be sustained long
past the current operation.
In order to achieve sustainability, which is possible, you would
have to reform and update the American mining law, and reform and
update all the raft of withdrawals including Wilderness with a big W as
it basically enshrines a 1964 zoning pattern on public resource lands
forever. What town in the United States today could live with a 1964
road pattern as its sole zoning base. Yet American mineral producers
are asked to do just that. And no, the planning process did NOT take
into account mineral resources in the boundaries. They didn't have a
clue, anymore than Tucson Arizona foresaw the expansion of housing
outward in 1964 for today's housing market. They had a more flexible
process and have been able to handle growth.
This is our dilemma. The political will to make these changes may
not be there. If this is the case, we will continue on until some
crisis forces us to visit these solutions.
I am attaching some papers I have written in conjunction with
others on these issues. For nearly ten years I was with the Public
Resource Foundation in an effort to come up with and pass a model
Mining Law Bill. That model bill is not attached and I would refer you
to Putnam Livermore in San Francisco if you are interested. Other
articles demonstrate a progression since the Wilderness Act in 1964 to
eliminating exploration and discovery for mining law minerals in our
national resource lands.
Mineral resources on Public resource lands are separated into
locatable mineral resources; the hard to find minerals, and secondly
leaseable minerals; the bedded mineral deposits or more easily found
ones. Withdrawals affect both. With leaseable minerals there is enough
information to get a sense of how much of the resource broadly exists
and how much is currently under development. An attached article, I did
years ago, indicates that potash in the U.S., a key fertilizer mineral
is most in need of some attention in order to sustain mineral
development. History would show that potash imports cut off from
Germany in WWI led to great hardship by American Farmers.
Finally attached is the new discovery Patuxent River Agate, a
petrified bone material from of all places, Maryland. This was my
discovery which last year became the Maryland State Gemstone by a
strong vote. Six years ago this fine quality state gemstone did not
exist. If it can be found in an eastern urban/suburban environment,
what else is out there on those National Resource lands? Lands that
were set aside for wise use, I might add, not for no use. If you don't
look, you won't find.
We are entering a new era. China, India, and other nations are for
the first time competing for natural resources, resources we have
historically had nearly all to ourselves. Where will the next
generation get their minerals to sustain not only mining communities,
but industrial communities all over this nation? I think this
committee's attention to this issue is important.
______
Mr. Gibbons. Well, thank you very much, Mr. Lee. Indeed,
it's fascinating to hear those stories and the contributions
that your testimony makes is indeed helpful. Thank you for
being here today as well.
We turn now to Ms. Ann Carpenter, a friend of long standing
and someone I have a great deal of respect for, who has been
before the Committee before. Ann, welcome. The floor is yours.
We look forward to your testimony.
STATEMENT OF ANN S. CARPENTER, MINERAL DEVELOPMENT CONSULTANT,
WOMEN'S MINING COALITION
Ms. Carpenter. Thank you very much, Congressman Gibbons. I
appreciate the opportunity to speak before this Subcommittee
and on this important issue. I ask you to refer to my testimony
for further detail on my background, but I've had over 25 years
of experience in mineral development both domestically and
internationally. As well, I've been working and focusing on
sustainable development for various clients since 2000.
Some of my work lately has been helping community groups
develop in Nevada at various levels, some with just a focus at
single mine sites and others with community group development
in communities that host many different mine sites. The
community groups are being initiated in Nevada and many other
States where mineral development is occurring so we can look at
mining as it plays a role in sustainable development at these
communities. Oftentimes these are initiated by the communities
and sometimes by the mining companies, but it's always in
partnership as we try to evaluate how this particular industry
plays a role in the overall development of a community. But the
important point here is that the communities are the drivers.
The drivers are not the mining companies so much as their
participation inside of a community group.
The groups are comprised of a multi-diverse stakeholder
group, including business owners, mining companies, Government
agencies, indigenous groups, and other interested parties. The
focus here, inside of our testimonies here have been on
hardrock, but I've seen this evolve out into the coal sector as
well, and there are a number of individuals that are forwarding
these sorts of initiatives in the coal sector.
The objectives generally of these groups is to become more
involved with the industries that they host, mining and
otherwise; to strengthen communities through economic
diversification; to look at mine sites with the idea of
attracting other businesses; and to work in partnership with a
broad group of people to address communities' growing needs.
The integrated approaches give us, lead to sustainable
development opportunities. There are many businesses that are
coming to look at mine sites for different business
opportunities. That includes renewable energy generation, as
we've heard, waste management, eco-industrial park concepts,
recreation, business parks, educational-institution
partnerships, high-tech business opportunities, and law
enforcement and military training.
The impediments are tied to our current land use policies,
as we've heard from some of the other testimonies today. These
land use policies help to promote the boom-bust cycle that we
constantly find ourselves in.
The closure--we are required by law and regulation to close
the mines. We complete extensive earthwork and revegetation
reclamation. We also remove all buildings, roads, power
facilities, water wells, et cetera, as part of this closure
requirement. The closure policies limit the ability to reuse
these sites and the communities are actually asking for more.
The impediments include, in Western States where Federal
land ownership is highest--Nevada being in excess of 87
percent--communities can be surrounded and oftentimes are
surrounded by Federal lands, limiting the growth opportunity.
And if the map is still up, I ask you to refer to that map
again.
The restrictions currently placed on post-mining uses, as
dictated by existing Federal land use policy and regulations,
makes sustaining a strong economy in rural communities
extremely difficult. We need mechanisms to privatize the land
to help to promote other businesses. We currently have
patenting land sales and land exchange, all very cumbersome,
slow processes. And these current mechanisms, we often find
ourselves in delays that actually impede economic growth and
causing negative impacts to the ability to evolve these sites
into other business opportunities.
As I've discussed, the current businesses under
consideration--and this by no means is a complete list--include
renewable energy; and you have Kennecott, Queenstake, Placer
Dome, Kinross, Coeur Rochester, Newmont, Placer at both Cortez
and Golden Sunlight. A lot of companies are coming to these
sites asking the various companies to see if they can
characterize the site to see if wind energy generation, solar,
geothermal are going to be possible. We have landfill business
opportunities. Rawhide, Mesquite, and other mines across the
West are looking at the possibilities. Recreation, trail
systems, wildlife viewing in Nevada, California, Wisconsin.
Some of the sites have business parks affiliated with them--
Flambeau, Wisconsin; some in Nevada, some in Montana. These are
evolving discussions. And then educational-institution
partnerships, like the McLaughlin mine in California, Flambeau
mine closure in Wisconsin, and many other places.
An interesting new development is military and law
enforcement training facilities. At a recent community meeting,
a Hawthorn individual, elected official, summarized a business
opportunity that has come to them in the Hawthorn area. And I
just had some interesting conversations on a plane flight
recently with some military and law enforcement folks that were
saying that we don't have enough training facilities to meet
our growing demands for homeland security training issues. And
they became very interested in, well, what's potentially the
possibility of using these mine sites that have gone into
closure for those potential personnel and unit training and
equipment testing. There's a place out at Lakeview, Oregon,
Thunder Ranch, that is one of these particular facilities where
training occurs.
A central question: How do communities gain access to these
sites in order to develop other business opportunities for the
long term? And the answer lies in the partnerships built
between the communities, the governing agencies, mining
companies, and other individuals and entities. The answers also
lie in land use plans, policies, and regulations--ending the
boom-bust cycle, communities' desires for additional
utilization of mine sites, the Federal agencies, and the need
to change Federal land policies. We need help to modernize the
processes.
Not only does the mine generate capital for investment, but
the sites offer opportunities and assets--facilities,
infrastructure, et cetera--for other business opportunities
providing for sustainable development opportunities. The
current mine planning and reclamation and closure requirements
by State and Federal agencies leave little room for other
businesses to utilize these sites. As companies and communities
begin to shift their gears and address the need for changes so
that the other businesses might have access to these sites, the
Federal agencies also need to implement changes to their
existing policies to help communities develop economic
diversification. These are all necessary changes that benefit
the sustainability of rural communities.
And I thank you for the extra time in my testimony.
[The prepared statement of Ms. Carpenter follows:]
Statement of Ann S. Carpenter, Consultant,
Domestic and International Mineral Development
Congressman Gibbons and distinguished participants:
Thank you for the opportunity to testify before this Subcommittee
today. My name is Ann Carpenter. I work as a professional in the
domestic and international mineral development arena, and am an advisor
to and past president of the Women's Mining Coalition (WMC). WMC has
members and participants nation-wide addressing mineral development
issues important to the companies we work for and the communities in
which we live. Today I will discuss ``How Companies and Communities are
Addressing Sustainable Development Opportunities''.
I have a bachelor's degree in Geology from Montana State University
in Bozeman, Montana (1980), with additional advanced degree studies
completed at Mackay School of Mines, UNR (1981-1983). I have over 25
years of experience as an exploration and mining industry professional,
exploring for and developing mineral resources worldwide. This
experience has provided me opportunities to work in many diverse
geologic and cultural settings--in the United States, Chile, Argentina,
Peru, Mexico, and East Africa. I have worked for junior, mid-tier, and
major mining companies, as well as for local governments and
institutions evaluating mineral resources--integrating sustainable
development principles and practices from the grassroots exploration
phase through property reclamation and mine closure.
Sustainable Development Background
The Bruntland Report, or Our Common Future, is the report made by
the World Commission on Environment and Development in 1987. It
addressed growing concerns about the environment and how development
creates impacts. In that report, sustainable development was described
in this way: ``Humanity has the ability to make development
sustainable--to ensure that it meets the needs of the present without
compromising the ability of future generations to meet their own
needs''.
The mining industry addressed this further through a global effort
called the Mining, Minerals and Sustainable Development (MMSD Global),
and results of this effort are reported in ``Breaking New Ground--
Mining, Minerals and Sustainable Development'' (2002, London: Earthscan
Publications), available online at http://www.iied.org/mmsd.
Sustainable development has become a key concern for mining companies,
the communities that host mines, NGOs, indigenous people, community
leaders, business owners, educational institutions, and other
interested parties.
I worked on three of the four tasks related to the Mining, Minerals
and Sustainable Development North America effort, helping to generate
that final report in 2002. As well, I was part of a 40-person team
headed by Anthony Hodge that generated the Seven Questions to
Sustainability, How to Assess the Contribution of Mining and Minerals
Activities (2002 publication). I have assisted mining companies and
various communities in addressing, developing, and understanding
principles and practices of sustainable development. Most recently I
have been a consultant to Caterpillar, part of a team that designed and
implemented a Sustainable Development Forum that Caterpillar hosted in
conjunction with MINExpo 2004. In addition, I work as part of a
Caterpillar team developing an educational film on sustainable
development to be used in high schools and college level courses. I
currently work with three Nevada-based community groups addressing
mining and sustainable development issues, often in partnership with
UNR's Mining Life Cycle Center and Great Basin College.
Sustainable development is often described as pillars, and includes
these elements: economic, environment and social/community. Governance
is another pillar that is often included in discussions. Other terms
that have been used to provide an image of sustainable development is
the three-legged stool or triple bottom line. The latter refers to an
accounting sheet providing bottom lines not only on economic activity
but also on environmental and social/community issues.
Sustainable development and sustainability are topics that many
industries, companies, and individuals are discussing.
PriceWaterhouseCoopers recently conducted a survey of over 25,000
people worldwide. This survey revealed a near global consensus that
companies should go beyond financial philanthropy and apply their
expertise and technology to resolve social and environmental problems.
Many industry sectors and their related companies are recognizing the
need to demonstrate their commitment to generating profits, while at
the same time reducing the impact of their businesses and operations on
people and the environment.
Community Groups and Sustainable Development
In areas where mines are being developed, community groups are
springing up throughout Nevada, and the United States in general. These
emerging groups are becoming more involved with the industries that
they are host to, with the hopes of strengthening communities through
diverse partnerships addressing diverse concerns and opportunities,
including sustainable development concerns and issues. In rural Nevada
communities, where mining is a key industry, these emerging community-
based groups are comprised of a broad range of interested stakeholders,
providing forums for identifying, discussing, and resolving important
community issues.
A central desire is to bring business and economic diversification
to rural Nevada, and to communities that are dependent on mining,
addressing sustainable development needs. I am currently working with
three community groups in Nevada; these are briefly summarized in
Appendix A. Some of the objectives, as stated by various stakeholders
in these community groups, include:
To develop partnerships with a broad range of interested
parties and individuals--assisting in the transition to sustainability
in Nevada's rural communities.
To collaborate with many, focusing on attracting new
businesses to the area, often looking a mine sites and mining companies
for economic diversification opportunities.
To initiate longer term planning, strengthening
communities through business and industry diversification.
To foster a forum, promoting discussions between Northern
Nevada communities.
To develop a means, a process for interacting with the
many entities and individuals that are in the communities, including:
federal and state agencies, Native American tribes, business owners,
educational institutions, various industries (retail, mining, ranching,
gaming, energy generation, etc.), and interested citizens.
It is important to note that the groups that are emerging are the
result of community-based initiatives, forwarded by individuals in the
communities hosting mines. As well, the mining companies are also
initiating and expanding outreach efforts into the communities and
areas where they operate, forming important partnerships with these
hosting communities toward addressing economic and industry
diversification. In addition, each of these community groups is
comprised of individuals from businesses, mining companies, government,
indigenous groups, and many others interested in participating.
Although mining companies are some of the participants in these
community groups, it is the communities themselves that drive the
process, the discussions. Not only are the community groups addressing
important issues locally, they are also partnering with other
communities in the region with the hopes of attracting businesses to
the region. Mining companies and the mine sites play an important role
in these discussions.
Economic Diversification, Mine Sites and Land Use Policies
Communities throughout Nevada are beginning to look at mine sites
differently. These sites have a history of revenue generation for the
host communities, and there is a growing desire by the hosting
communities to attract other businesses to these sites to develop
business opportunities. There is existing infrastructure in place at
the mine sites--power, roads, buildings, water, etc.--and communities
are asking that the facilities and infrastructure remain in place so
that other businesses might be able to utilize them. This would allow
for the site to evolve, to continue generating revenue for the host
communities, and that would help the region to have more opportunities
to develop additional sustainable business opportunities. Some of the
businesses that have recently showed interest in utilizing these sites
include:
Renewable energy generation
Waste management
Eco-Industrial Park concepts (in concert with waste
management and renewable energy generation)
Recreation (trails, parks, fishing, etc.) and wildlife
habitat--successful reclamation has resulted in vegetation and wildlife
habitat enhancement--both having recreational value.
Business Parks
Educational institutions--partnerships for long-term
learning; long-term monitoring and closure procedures provide unique
partnership opportunities between educational institutions, the mining
companies, state and federal agencies, and other interested parties.
High tech business opportunities--data storage
This should be considered a partial list, and in no way should
reflect all of the possibilities that communities are currently
reviewing to strengthen their economies. Some of these have potential
specific ties to the mine sites, some need partnership relationships
with mining companies and others, and some are stand-alone with the
mining companies invited as potential investors.
A testimony I submitted in October 2004, for a Field Hearing on
``Sustainable Development Opportunities in Mining Communities Part I''
held in Reno, Nevada details some of these other business
opportunities. The testimonies of others today also begin to account
for some of the sustainable development opportunities that communities
hosting mines are reviewing.
Business Diversification Hurdles
Although there is a growing desire by communities to have other
industries develop business opportunities at mine sites (either those
that are still active, or those sites moving into closure), there are
hurdles to being able to accomplish this business diversification. In
order for new businesses to utilize mine sites, federal land use plans
and regulations would need to be changed to better allow for this to
occur. Nevada and its rural communities are constrained to small areas
for development, with federal land ownership surrounding most
communities, and constricting their business and community growth
opportunities. Land use plans and existing regulations need to be
evolved to help address rural communities and their changing needs with
regard to business development. The mine sites provide a unique
opportunity for this to occur, helping to attract other businesses to
an area if access to the sites can be achieved easily and affordably.
The Boom-Bust cycle continues to be a part of mineral resource
development, causing great concern for many. It is not just the result
of the short-term, finite business cycle of mining (when the resource
runs out, then the mine must close), but it is also supported by
federal land use plans and policies that require ``closure'' to occur
at the mine sites. Under current federal policy, mining companies that
are operating on federal land are not only required to complete
extensive earthwork and revegetation reclamation, but they are also
required to remove all infrastructures during mine closure. This
includes roads, buildings, power lines and power transfer stations.
This translates to lost economic and business opportunities for
communities--communities view these as assets that could and would
attract other businesses to the area.
Mine buildings and other facilities at the mine sites can be used
for other types of industrial activity and are considered an asset by
many communities. Many mining properties are suitable for renewable
energy projects such as wind, solar and geothermal. However, once the
power lines and the transfer stations have been removed these types of
projects may not be economically feasible. The Boom-Bust cycle
continues, driven in a large part by land use policies that currently
limit the ability of other businesses to utilize these mine sites after
mining has been completed.
The government plays a key role in the current Boom-Bust cycles
regarding mining, driven by its existing land use plans, policies and
regulations. These need to be evolved to help meet the growing needs of
communities--to help develop stronger economic and sustainable
development opportunities.
Federal agencies play a vital role in rural communities' abilities
to survive and evolve. It is time to evolve land use plans, policies
and regulations to meet the changing needs of communities. Privatizing
lands at mine sites would help to meet these growing needs of rural
communities not only in Nevada, but across the west.
The restrictions currently placed on post-mining uses, as dictated
by federal land use policies and regulations makes sustaining a strong
economy in rural communities extremely difficult. Privatization of some
of the lands at mine sites (pits, facilities areas, etc.) is a way to
help promote economic development following mining because the
infrastructure developed at mine sites could be used to support
redevelopment of the land, attracting other businesses.
Patenting of lands in mining areas was a key ``privatizing''
mechanism in the past; a mechanism used to secure necessary title to
lands on which mines were being developed. As a result, there are many
historic mining districts across the west where there are large blocks
of patented lands. Some of these have evolved over time into other
business ventures, principally ``recreation-based''. Ski areas at
Telluride, CO; Park City, UT; Sun Valley, ID are just a few examples of
the mining areas where these types of businesses have evolved, and
patented (private) lands played a vital role in this. The businesses
have certainly helped the host communities to survive and evolve as
well.
Because patenting is not a viable option today, privatization
opportunities are limited. Some mining companies have been in
protracted (3-10 year) federal land sale processes, and the delays and
excessive time taken to complete these has resulted in lost economic
and business opportunities--not only for the mining companies but for
the host communities as well. It is my understanding that a land sale/
exchange Phelps Dodge was forwarding took about 10 years to complete.
There are other companies in Nevada attempting to move through the
federal land sale process, and by all accounts these are progressing
very slowly. More than anything, this is a frustration to the host
communities as they view these delays and the slow process as a
significant hurdle toward their ability to attract other businesses to
the region and address their economic diversification needs. The longer
the process, the more likely that interested business groups and
opportunities will leave, looking for other more timely options.
It is imperative that Congress review the current options regarding
``privatizing'' lands at mine sites, with the objective of
sustainability of rural communities. Patenting is a difficult to
impossible process today--there continues a patenting moratorium on any
new patent applications. So other methods need to be reviewed and
updated to help to evolve land use policies and regulations to help
meet the growing needs of communities. Increasing the private land base
in rural counties in Nevada and elsewhere in the west is necessary, and
the privatization of mining claims could help to meet the needs of
rural communities. Please see Debra Struhsacker's testimony from the
October 2004 ``Sustainable Development Opportunities in Communities''
Field Oversight Hearing in Reno, Nevada for more information on
patenting and privatization.
Communities and Mines--An Evolving Partnership
Communities are beginning to evolve their thinking relative to
mining. More commonly, the mine sites and their facilities and
infrastructure are seen as assets, and communities want access to these
sites to hopefully develop other business opportunities. Some of
business opportunities can be advanced concurrently with the mining
activity; others are better suited to when the mine is in closure. This
is a result of the research that communities are conducting, with the
objective of economic diversification. A central question is, ``How do
communities gain access to these sites in order to develop other
business opportunities for the long-term?'' The answer lies in the
partnerships built between the communities, the governing agencies, the
mining companies, and other interested individuals and entities.
There is also a significant shift occurring as communities look at
mining and the revenue generated by the production of mined products. A
lot of Nevada communities have been through multiple Boom-Bust cycles,
and they now recognize the need to invest the revenue generated from
mining in a different way: mining revenue is being looked at as seed
capital to invest into other business opportunities that create
economic diversification, stronger communities, and longer-term
futures.
Kennecott's Flambeau, Wisconsin project is a good example to
review. A community group was formed--comprised of mine workers,
community leaders, businesses, Native Americans, NGOs, and others--to
address mining-related impacts and how the revenue generated by the
mine could be used toward economic diversification. What emerged was a
business plan that turned the initial investment of about $7 million in
revenue and 70 mining-related jobs into approximately $50 million
annual revenue and 500 non-mining dependent jobs. The mine revenue was
viewed as seed capital for a longer-term investment in the community's
future, and the community group and all of its participants helped to
developed and guide this plan.
Community groups in Nevada are looking at this example, and many
others both in the domestic and international mineral development
arenas, to help guide an evolving sustainable development process here
in Nevada, especially as it relates to mining.
Summary Statements
Not only does the mine generate capital for investment, but the
sites offer opportunities and assets (facilities and infrastructure)
for other businesses to potentially have access to, evolving the sites
and providing for sustainable development opportunities. The current
mine planning, and reclamation and closure requirements by state and
federal agencies leave little room for other businesses to utilize
these sites and their related infrastructure, helping to perpetuate the
Boom-Bust cycle. As companies and communities begin to address the need
for change so that other businesses might have access to these sites,
the federal agencies also need to address what changes they can
implement to help communities develop economic diversification
opportunities at mine sites. This needs to change for the benefit and
sustainability of rural communities across the west.
There are many benefits associated with privatizing mining claims,
and all would enhance sustainable development following mining on
federal land. The current regulatory and legislative processes to
privatization create impediments. Policy and legislative changes are
needed to facilitate privatization as a way to encourage sustainable
development following mining. Some of the necessary changes include:
Lifting the current patent moratorium;
Amending the Mining Law to include a fair market value
patent without a reverter;
Streamlining the administrative and legislative land
exchange and direct sale processes.
It is through community partnerships that people see opportunities
flourish. The community groups that are evolving in Nevada are good
examples of how partnerships between the communities, the mines, the
state and federal agencies and other interested entities can help to
develop sustainable development opportunities. The broad and diverse
base of participants in these community groups allow for many issues to
be addressed, problems solved, and greater successes realized. These
groups are trying to address sustainable development issues and
concerns, and changing land-use plans and policies is paramount to
helping these communities meet their needs for a stronger future.
Thank you for the opportunity to testify on this important topic.
APPENDIX A
COMMUNITY GROUPS--BRIEF DESCRIPTIONS
The community groups that I am working with in rural Nevada
include: Rawhide Community Advisory Group; Northern Nevada
Partnerships-Elko; and a newly implemented Lander County-based
community group. What follows is a brief description of how these
groups came together.
Rawhide Community Advisory Group (RCAG)
I started working with this group in 2003. The group was initiated
in 2002, under the direction of a consultant (Steve Jarvis) to
Kennecott's Denton-Rawhide Mine. The companies in joint venture were
beginning to address mine closure issues at the Rawhide Mine, and
wanted to get a group of stakeholders together to address the many
issues surrounding closure. The group is comprised of individuals from
rural Nevada communities surrounding the mine--Gabbs, Hawthorne,
Schurz, and Fallon. I was hired to proceed with the group in 2003,
continuing as the Facilitator of the group. There are approximately 15
members in the group, representing the mine, elected officials,
interested citizens, economic development leaders, Schurz / Walker
River Paiute Tribal members, DZHC Base representatives, and various
businesses in the region.
Northern Nevada Partnerships-Elko (NNP-E)
In November of 2003, the Northeast Nevada Stewardship Group hosted
a Mining and Communities forum in Elko, Nevada, and I was invited to
participate as a Co-Facilitator. The outgrowth of that approximate 2-
day forum is the Northern Nevada Partnerships-Elko (NNP-E) group. The
group is comprised of elected officials, mining professionals,
representatives from both Great Basin College and the Mining Life Cycle
Center, interested citizens, business owners, federal agency
representatives (BLM and USFS), and economic development authority
leaders. A key objective of this group is to address business and
economic diversification and how the mines, federal agencies,
interested individuals, businesses, and communities in the region can
work together to address sustainable development issues. Another
objective is to conduct outreach into other communities in Northern
Nevada, to help these communities, if they so desire, to form community
groups of their own.
Lander County Community Group
This group came together in 2004, with a desire to address the
proposed Yucca Mountain rail corridor (Lander County sections), as well
as mining-related issues. This group is comprised of interested
individuals from Austin, Battle Mountain, and ranching communities
county-wide, including representatives from the BLM, the hospital, the
Yomba Tribe, business owners, ranchers, mining companies, Great Basin
College, elected officials, economic development authority, and local
schools. This group is exploring ways for the mines, federal agencies,
businesses, and interested individuals to work together to address
sustainable development issues, forming partnerships that lead to
stronger communities.
______
Mr. Gibbons. Ann, it is always a pleasure to have you
before the Committee. And everybody did very well in monitoring
their time for opening statements. The process now is that we
turn to the Committee members here to ask questions. We limit
ourselves to 5 minutes just in order to give everybody else
opportunity to question.
I will take my first shot at it because I think each of you
has raised some very good points. One of the things that
impresses me is the fact that there are opportunities. Each one
of you has envisioned opportunities in post-mine, post-closure
to have the community benefit from something that was
developed, built, constructed, created through the process of
mining when the mining company came there and extracted the
minerals, and the opportunity that that provides to a county.
For example, Mr. Jeffress from Pershing County in Nevada, a
county that is 6,000 square miles, 1,000 miles larger than the
State of Connecticut, how large is the Coeur d'Alene mine in
that county? I mean, just in terms of relationship. We are a
6,000-square-mile county, how big is the mine footprint?
Mr. Jeffress. To put it in perspective, most of the
infrastructure that you find in Pershing County follows the
Interstate 80 corridor. And that to Pershing County is
approximately 75 miles long. Along that course there is maybe a
half a dozen, five other developments besides Lovelock and two
other satellite populations that extend in valleys. So we have
about eight developed areas within Pershing County. Coeur
Rochester is the ninth. It's significant when we look at it in
that context. It's about 13 miles off of Interstate 80. It's on
a paved road. It's relatively accessible. And it has a host of
opportunities that were outlined earlier.
So I guess to answer your question, Mr. Chairman, it is
significant because it represents almost a tenth of the
developed areas within Pershing County.
Mr. Gibbons. In terms of relative size?
Mr. Jeffress. Size, it is, I believe, around 1,800 acres,
2,000 acres of developed site with roads, infrastructure, et
cetera. So we're looking at three and a half square miles,
something of that order. But as far as potential with
ingressing powerlines, roads, et cetera, and associated
opportunities within that, it's much larger.
Mr. Gibbons. Ann, let me ask you a question. At the end of
the mine closure and the process of looking at sustainable
development within those areas for utilization by these
communities, we are not talking about doing away with
reclamation per se, I mean stopping that. All we are doing is
talking about a common-sense approach, are we not? We would
still be doing reclamation on some of the tailings files, still
be doing reclamation where you can, where there is no need for
keeping the infrastructure. Is that what we are talking about?
Ms. Carpenter. Yes, oftentimes what you're looking at is
the footprint of the infrastructures itself, like the road
systems, potentially the major road systems, buildings, water
wells, power plants, and the power lines. So you're looking at
a small percentage of an overall impact area and the rest of
the area that would not be host to new businesses would fall
and would follow all the reclamation and closure requirements
under the current reclamation and closure plans. So you're
looking at a smaller footprint that would provide additional
business opportunities, whereas the external zones would still
fall under closure and reclamation requirements.
Mr. Gibbons. So you still have obligations under the
reclamation process, you are just taking a harder look at
infrastructure that would remain that would be valuable for the
community to take advantage of.
Ms. Carpenter. Yes. The community or other businesses would
come in and purchase those footprints or those facilities and
then they would be required to reclaim them at the closure of
their business opportunity. But the idea is to give these sites
a second, third, or fourth chance to continue to generate
revenue while still respecting the reclamation and closure
requirements at the time that they would actually pull up
stakes.
Mr. Gibbons. Mr. Arnold, let me ask you a question. You are
involved with Coeur Rochester. Is this Coeur Rochester's
belief, that through sustainable development it can be released
from reclamation? Is this a concept that you guys are pushing?
Or are you still committed to reclamation even if you do
sustainable development?
Mr. Arnold. Well, we're committed to reclamation from an
ethical standpoint, if not by law, but we are committed by law.
We still complete NEPA. We will go through, and we're doing
NEPA right now through an environmental impact statement for
our closure. It's closure-focused. But even more and above
that, you have the State of Nevada. And the State of Nevada
doesn't care whether you're on Federal lands or on State lands,
as long as you're within that boundary in Nevada you must do
the reclamation that the State of Nevada requires.
I don't anticipate any of these things, whether we do wind
farming or aggregate sales or any of that, really changing what
the ultimate reclamation would end up being very much at all.
Mr. Gibbons. How would you merge the reclamation with the
phase-in of, say, a business within the reclamation? How do you
do that? What process do you follow?
Mr. Arnold. That's not easy. That's difficult. In fact
that's part of the reason why we were looking at trying to get
this done as quickly as possible. We're within two years of
being closed. What we're trying to do is pick up tenure of our
investment and title to that land so that we can go through,
and that will give us less than two years to do the design of
this aggregate facility and wind farm or whatever else we do,
construction, permitting of it, and we can start phasing people
from the jobs that we currently have now, which is a nice
silver mine, into these other facilities. If we handle that
deftly and carefully, then we can do it and make it transition
very smoothly. But what we're trying to do is think ahead right
now so that we can keep from any hiccup happening in that
transition.
Mr. Gibbons. Mr. Harrington, how long has the Community
Transition Advisory Committee been existence?
Mr. Harrington. We started about in 2000.
Mr. Gibbons. So it has been in for about five years?
Mr. Harrington. That's correct.
Mr. Gibbons. Did you work with the State legislature in
Montana to change the State law in order for the Community
Transition to create this process or to assist in this, to
bring some measurable change to sustainability in that area?
Mr. Harrington. Yes, sir, we did. In fact, my counterpart's
actually a legislator from our district there, which
encompasses our county. Our county actually has three mining
operations. Three of our four largest taxpayers are mining
entities. And to kind of respond to this Committee's discussion
there about the infrastructure and post-closure mining
activities that we could use, my counterpart, Scott Mendenhall,
carried that bill. We were successful in getting that passed.
Mr. Gibbons. For the audience, I think a lot of people
don't understand what we are talking about, ``infrastructure,''
out there. We are talking, you know, paved highways that go up
to these mine sites that are in existence today. We are talking
about transmission lines for power that go up to these sites
today, so if you did end up taking advantage of, say,
alternative energy sources up there, whether it is geothermal,
whether it is wind, whether it is solar, you have an
infrastructure, or transmission line, that connects back to the
grid in existence today that would normally have to be removed
under the reclamation process. Those are important assets,
expensive assets to install, expensive assets to remove;
buildings that could be used for businesses, I am sure, that
were created and put in place by the mining companies as well.
I guess the end result is that we are rethinking the
terminal end use of a mine throughout all of this. We are
rethinking the fact that mining and historical perspective was
the end terminal use of land. And today we are seeing now that,
while we may extract the minerals, we now have a viable vision,
option, whatever you want to think, about how we take not only
care of addressing the disturbance we have there, but taking
advantage of the infrastructure that was created so that we
have a valuable resource that continues on beyond the mine
life.
Most mines have 10, 20, maybe 40 years and then they are
required to close because the minerals have been exhausted and
people go look for other places. In some small counties, unlike
the East Coast, Mr. Lee, I am sure in Pershing County that the
Coeur Rochester mine is an enormous contributor to the tax base
in a county that is 6,000 miles. It is number one. And so when
that closes, the county, that has responsible for education of
its students and----
What is the population of Pershing County today?
Mr. Jeffress. Pershing County is approximately 6,400. And a
little over half of those people reside in Lovelock.
Mr. Gibbons. So it has responsibility for police and fire
protection, water and sewer systems, for health care, for
school systems, or all of those. And the number one taxpayer in
a 6,000-square-mile county, which is not predominantly owned by
private property, it is 92 percent owned by the Federal
Government. Who then becomes the number one replacement
taxpayer for that county to provide these services has got to
be the question. It is an issue that I think is predominant.
I mean, Mr. Lee, what would you think? How should Federal
land policy be changed, in your view, so that we can access the
infrastructure, access this, and have communities be able to
offer an opportunity. Because right now, under Federal law,
they cannot offer an opportunity to a business that may want to
move there because the law doesn't permit that. The law
actually requires, reclamation requires removal. How would you
change? What would be your view on changing that law?
Mr. Lee. Well, it's very interesting. It is indeed a
problem, particularly in these rural communities, which by the
way send all our tax money in here so we don't need to have
mines back here. We live off of your largess in these small
counties and you have to eat all the costs of development, send
all the profits, a lot of them, to Government. In my analyzing
the mining law--and I got some help from an economic geologist
from the University of Texas. He was a State--looked over all
the oil royalties. And the issue of the mining law, the
royalties continue to come up. And in fact, if you add up
State, local, and Federal taxes and benefits from mining, the
Government gets approximately 40 percent of the activity, which
is why many countries ask for exploration, because even if they
don't find anything, they're 40 percent better off for all the
money spent than they had before. It's not simply the royalty
on the commodity mined. Now, very little of that goes back to
these communities, you know, once the property is mined.
Getting back to your question--I'm digressing--you need a
flexibility in the process. And that's what's come about in all
the zoning for urban development. You're not going to resolve
all these issues. There are a lot of people on all sides. But
unless you have a flexible process--and you don't get that on
Federal lands with Federal law. The law's passed here, it goes
to OMB to get money, and it goes through Congress. And just by
the sheer weight of the Federal law, you deny a flexibility to
the land managers. And oddly enough, we pay billions to have
lands managed in both the Federal Government, and I'm sure in
Nevada they have zoning ordinances and land use planners at the
local level. You've got to give them more authority to innovate
and come up with ways to sustain development in these areas.
It's just--and that's true out here in the suburban East, only
they're more able to do it because they don't have some
overriding mandate that they have to comply with.
Mr. Gibbons. So would you support, for example, removing
the patent moratorium so companies that go in, make huge
substantial investment in this land during the process of the
mine can then have some predictability, some forecastability
about how they can address the future surface issues after the
mine has closed?
Mr. Lee. Well, I worked for 10 years with John Livermore in
Public Resource Associates, who you might know. He's in Reno.
Mr. Gibbons. I do.
Mr. Lee. And I picked up some of his ideas. He's quite an
authority on this. But the patenting process in the 1872 mining
laws broke. And a lot of the problem comes back to the Ulysses
S. Grant dollars-per-acre fee. And I worked at Interior in
minerals when we'd get a notice down that says the constant
danger of mineral exploration always exists. Because to many of
the other uses on Federal land, if a guy can put a piece of
private land in the middle of your wildlife refuge or whatever
you're planning to do, it sort of upsets your idea of the way
you want to go. But it's kind of an elusive argument because
there really isn't that much hardrock mined. And I separate
leasables and hardrock. Hardrock are the hard-to-find minerals.
One in 500 is successful.
But getting back to the patent issue, you know, you really
need to reform the mining law to have fair market value for the
surface, I think. But you have to have the owner of the mine
proceed with some kind of logical sustainable use. And the
highest and best use of that property should be the goal of
Government, not simply a mandated reclaim-it-at-any-cost. And
the highest and best use can mean a lot of things. It depends
on the topography, it depends on the geography of the town, it
depends on--I mean, you know, I've heard people say, well, you
ought to be able to build a Wal-Mart. But if you only have a
town of 2,000 people, you're not going to get a Wal-Mart there.
And that would be different than, for instance, the mine
right out here five miles from where we sit in Washington,
where you have a burgeoning demand. But even then, you have
high vacancy rates and it may sit there for a long time. But
they have a flexibility here in the East to accommodate
subsequent land uses and they work with the private owner,
because he owns from the sky above to the earth beneath in the
fee simple title lands. Fortunately, a lot of the public lands,
it didn't work that way even through the various patents as the
Federal Government transferred that land to private ownership.
Mr. Gibbons. But you foresee the ability to do something
with the ownership of the land even though it is surrounded by
additional, say, Forest Service land, to be able to protect the
Forest Service land that is not impacted by the mine from any
long-term sustainable utilization of that property?
Mr. Lee. Well, I guess I'm old enough and free enough to
say that I would want to give the Forest Service, and BLM in
the case, any multiple-use agency a mandate to work with the
mineral user regardless of whether he has an unpatented or
patented claim, fee title, a whole patented claim, placer
claim--they're all over there. You would want to look at it as
a larger land use project and mandate that Federal manager to
come up with the highest and best use of that particular piece
of property. And it may require some exchanges. That to me
seems to be what we like to refer to as wise use of public land
and private land.
Mr. Gibbons. Mr. Arnold, what is the infrastructure at
Coeur Rochester? What kind of infrastructure do you have there?
Mr. Arnold. It's extensive. A major mining operation is a
major operation. We've got 13 miles, as Mr. Jeffress said, of
paved road that heads up to the site. We have a 64 Kb powerline
that runs there. We have synchronization control equipment to
tie into that so that if we wanted to put in a wind farm, we
can tie in. That takes pretty sophisticated equipment, because
it's a very large mine and we run 85- and 150-ton trucks, we've
got the buildings with the cranes for very heavy equipment
that's there and available. Water. We've got wells. Septic and
sewage facilities. It's a major city capable of supporting a
lot of stuff.
Mr. Gibbons. And all of that would have to be removed under
the current reclamation program?
Mr. Arnold. Yes. Yes, it would.
Mr. Gibbons. The Coeur Rochester mine, and I did talk to
Mr. Jeffress a little bit about that, about 3 square miles? Is
that what you have?
Mr. Arnold. Something like that.
Mr. Gibbons. So in a county of 600,000, 3 square miles is
5/100ths of 1 percent of the county.
Mr. Arnold. I don't need to tell you how big Nevada is.
Three miles sounds like a big area until you sit up there at
Rochester and you look around and can see California 100 miles
away. It's a pretty small speck in Pershing County.
Mr. Gibbons. Well, it is significant, I would believe, to
the people of Pershing County not only as a source of jobs
today, but as a future opportunity for jobs after the mine is
closed and some revenue source for a county that has an
obligation and nowhere to have a property tax base that would
help them adjust for the loss of that revenue, that tax revenue
to that county. It's important.
Let's see what kind of questions we can come up with from
the staff that will maybe stump you. That is what their job is
today, I guess.
Let me go back to the same question I asked Mr. Lee, and I
am going to ask Mr. Harrington: If the Federal Government or
State Governments were to rethink their policies for mine
closure, what recommendations would you have, from your
experience?
Mr. Harrington. Mr. Chairman, I think probably one of the
things would be to look at the existing infrastructure and
probably the continued use of that for economic development.
You know, in our case, we actually had an outside engineering
firm come in and take a look at the infrastructure that was
there. When you say ``infrastructure,'' that's a pretty broad
term, you know. It's kind of a catchall. What this firm did for
us is went in and actually looked at each part of the
infrastructure and then took a look at potential reuses. What
that does, it allows you to focus on follow-on businesses that
might potentially use that, so you aren't just kind of shotgun
blasting of, Yeah, we're going to reutilize this for economic
development. It gets it out of that catchall phase. I think if
you're talking Federal lands or State lands or private land, I
think you need to go in and assess that and say is this really
a viable project for follow-on reuse?
You know, you talk about wind farm renewable energy and you
hear a lot about that, part of that process is to go in there
and do an assessment of the site and ensure you've got a valid
site. Now, as you look at wind energy maps and stuff, every
site's going to be a good wind energy production location. In
our case, we actually put an anonometer up there and did a
little over a year's worth of study and data that validated
that that was a potential wind energy site there, which allows
you to proceed to the next level, where you're looking for
potential investors and developers out there.
So I think you've got to be careful about just saying,
yeah, we're going to use the infrastructure and go and do this
economic development, without doing a full-blown assessment of
if it's viable or not.
Mr. Gibbons. So part of the NEPA process or, you're saying,
the original process ought to be what should be the end state,
what should be the end utilization of those resources that you
are going to have to put in when you look at the NEPA process
for mine closure?
Mr. Harrington. Yes, sir. I think part of it also is when
you're first looking at permitting a mine. If those kind of
rules were in place, you might actually see mining
organizations developing that infrastructure that would lead to
follow-on closure. Right now, you're looking at a mine location
going in there, they're looking at the ore, they put their
facilities in there, not really thinking about what's going on
at post-mine closure, because right now they're looking at
we've got to take the infrastructure out.
You turn that around and say part of the process is take a
look at, initially going in, how you're going to develop this
infrastructure and what it can be utilized for follow-on
activities, I think you'll see a little different process in
that.
Mr. Gibbons. Mr. Arnold, how do you make available or gear
up for a sustainable business when you are going through the
process of closure right now with the current and existing
regulations the way they are?
Mr. Arnold. Actually, we're gearing up right now. In fact,
we've got a little business going on right now on reclaimed
lands. We've gone through and we have planted some native
species and we're harvesting the seeds, some of it extremely
valuable seed. There's a penstemon seed that is highly regarded
for reclamation, and we sell it to the other mines. The area
was covered with PJ, pinion juniper. We've been able to go
through and grow some very extensive grasses, so the area's
better for grazing right now than it was before. If we can get
through and gain tenure to the land, we'll start looking at
wind farming then, at that point in time. It just takes careful
planning to be able to do that.
If you plan and do it--there's nothing complex in the
businesses themselves. Selling aggregate isn't a big deal.
Putting in the wind farms isn't big. You just have to be able
to plan it ahead of time.
Mr. Gibbons. I would like to ask from each of our witnesses
what has been their experience in dealing with BLM, Forest
Service, or other agencies--Fish and Wildlife--with regard to a
proposal for a sustainable development or a sustainable
utilization of the resources after mine closure. What has been
your experience?
I will start with Ann. Have you ever had any relationship
or dealings with the Government on this issue?
Ms. Carpenter. Yes, I have a couple of clients that are
stuck in a process that doesn't appear to be moving forward in
a very fluid fashion. The delays are--and the communities are
basically the ones saying come on, get this pushed through, we
want to see additional business development. And the process is
slow and it's confounded, it's inconsistent, and the delays are
actually potentially costing other potential businesses to come
in, because they're going to go to where they can address their
business potential in a more timely fashion. So----
Mr. Gibbons. Has the Government told you why they are
delayed, why they are dragging their feet on this?
Ms. Carpenter. Well, no. No one ever wants to admit why
they are sort of hiccupping. From my viewpoint, looking at how
the process works, is that this is not a typical, this is not
something they're used to doing. So when you step out of a sort
of format that they're used to, then you get into more of a
slowed-down process--``I'm not really sure how to value this,''
you know, ``I'd better go about this very slowly.'' And the
processes need to be modernized to meet today's growing
communities' needs.
So I don't--for me, it's not anything that's sort of
prescribed coming out of the Government, it's just they're
outside of their comfort zone. So it's not an area that they're
used to operating in.
Mr. Gibbons. Mr. Lee, do you have any experiences?
Mr. Lee. Well, I think she said it very well. I go back to
the passage of the Wilderness Act, which I came here
afterwards, and the irony is you have a 1964 road pattern which
set up the basis for zoning on public land. And I turn that
around to having worked in these Eastern urban areas. Could the
City of Tucson exist on a 1964 road pattern? Could they have
foreseen the tremendous growth? My son lives in Tucson. And of
course they couldn't. There has to be a flexibility in the
system to allow for growth and change. And the idea I heard
here sound great. I mean, wind is, if they've got enough
elevation, it's an ideal project.
I one time almost got fired at Interior for suggesting that
we put a historic mine frame on a property that was going to be
withdrawn. And they just went ballistic because nobody ever
does that. It's either all open or all closed. And of course
the land was withdrawn anyway, and there's no mine there. I
think we need to take a look at--you know, try to bring the
Federal Government, which is so archaically drawn into ``what
we've always done,'' and work with the communities and, whether
it's public, private land, come up with the best alternative.
But that's not the directive. If you're public land, you're
public land, and it's sort of park land. And if you're private
land, then you're a Wal-Mart. And, you know, the future demands
more.
Mr. Gibbons. Mr. Harrington?
Mr. Harrington. Well, Mr. Chairman, I've had a little bit
of experience with the Forest Service and the BLM and that. You
know, what I see is you've got a lot of really good people out
there working hard to do their job. My experience has been
you've got a lot of bureaucratic layers in there, and the age
we're in right now is an age of liability. So as you deal with
regulations and rules, interpretation of that down at the lower
levels, sometimes it gets a little fuzzy on there.
And I look at example we've got in our county of a small
exploration company that's coming in and doing some drilling in
there. And we haven't had much exploration going on in Montana
in the last several years, for a variety of reasons. They want
to do some winter drilling on there, and because of a concern
that maybe there might be lynx--and this country has never had
any lynx identified--they required this company just to stop
drilling through the winter there. Again, this was
interpretation at the lower levels of what that meant to
potential lynx habitat. Obviously very frustrating for this
small exploration company to go in there. They just put
everything on hold for several months until the wintertime was
over with.
I think a lot of that is probably the interpretation of
making sure we have clear-cut rules and regulations. The one
I've come in contact with with BLM here recently, they're
redoing the resource management plan in our area. And you start
seeing these terms, like ``wildland-urban interface,'' and you
ask what exactly is that? And you try to define that and you
get a variety of different interpretations, depending on who
you talk to. I think some of it needs to be more clear-cut
guidance that comes from the top level down on what we're
actually trying to accomplish.
Mr. Gibbons. Some days it is frustrating for us to pass
legislation, then to see the rules that implement the
legislation created by the bureaucracy, which has a completely
defeating purpose or change to the intent of the legislation.
Only you are on the other end of that. You are on the receiving
end of the frustration because you have to work through that
process. And if it is not clear, you are absolutely correct. It
causes for different approaches, different end results through
people's variable interpretations of how the regulations are
enabling, or not enabling, the legislative intent. I understand
that.
Mr. Arnold, have you had any experience dealing with the
Government on this sustainable development? What has been that
experience?
Mr. Arnold. In a prior life I lived in Winnemucca for 18
years, Winnemucca, Nevada, and I ran mines there. One of the
mines I ran was the second-largest hardrock mine in the
country. We were building a very large pit there, very large.
It's going to backfill with water. It's going to be a nice
lake, a really nice lake. It'll be the second-biggest manmade
lake in Nevada. We know through modern geochemical techniques
that the water quality in that lake is going to be exceptional.
It's going to be a nice fishery, a nice facility.
In closure, because the BLM has been mandated to protect
the public health and safety, we must block off all access to
that, reclaim the roads that are access to that nice lake, put
a fence around it so that the public cannot possibly get to it.
The head of environmental compliance for Winnemucca was my
next-door neighbor. The past head of environmental compliance
for Winnemucca lived on the other side of me. And if you got
together with those guys over an adult beverage and said, you
know, does this make any sense, they would always kind of smile
and say, no, it doesn't. We really need to be taking advantage
of this. We've got some nice facilities that you guys are
putting together.
A mine attracts wildlife, contrary to what people think. At
one point in time I had a bighorn sheep that actually came out
and lived in our pit. And we had to call the local wildlife
official, Jim Jeffress, and he came out and trapped the sheep
and pulled it out of there for us. But these areas end up being
very, very good areas for post-mining land use for hunters and
fishermen, but we're being blocked off. The local guys didn't
see any sense in it, but there's mandates that come from
Washington that they're forced to enforce.
Mr. Gibbons. Perhaps that comes from a view of trying to
look at Winnemucca, Nevada, from Washington, D.C.
Mr. Arnold. Exactly.
Mr. Gibbons. There is a lot you can't see from this far
away, a lot you don't understand. And that is always the
problem. We are finding a lot of misinterpretation. And I think
that is, quite honestly in my opinion, what creates the
friction between those people who are attempting to do
something worthwhile, attempting to do the right thing, and the
bureaucracy which says that it has to be done this way because
we have no flexibility. Therefore the frictional rub between
trying to do something which is creative, innovative, and in
the best interest confronts directly with the opposition of
having no flexibility, regulatory restrictions, and a lack of
understanding on behalf of those people making decisions from
the other side of the coin as to what we are trying to
accomplish here.
I think if we are going to have a viable mining industry in
the future in this country, we need to have a working
relationship both with the regulatory environment and the
bureaucracy that regulates that, because there are some cases
where there is abuse. But in some cases we need to have a
working relationship that understands and works a little more
flexibly with it. Because mining used to be the terminal end
use of the land. And today we are finding out that mining is
not the terminating end use of the property, but there are
alternatives.
And this lake, for example, that you are talking about at
Winnemucca, Mr. Arnold, is the very same concept of the lake
that Mr. Lee talks about, or the part in Maryland where it has
a garden effect because of the removal of the material out of a
pit for a quarry. Or even in Sparks, Nevada, where we had a
sand and gravel pit which is now a marina, and a very nice
marina at that. The city has done a wonderful job at creating a
true attraction for people that I find is remarkably creative
by a community that had what was otherwise a huge gravel pit
right in the middle of their city. And now they have turned
that around and made it an attractive park-like setting with a
lake that people have really come to enjoy.
I think we need to start looking at what can be the end use
of these lands once mining has finished, and the investment
that these companies have made should not be just summarily
disregarded and requested to be removed, because there are
valuable investments in this property, some of which can be
creatively used for the future.
Anyway, actually, I am the only one here, as you can tell.
And we have kept you here an hour and a half for this hearing.
I think we have set a very clear record for why sustainable use
of land after the closure of a mine is an entity which we need
to focus on. We need to review the regulatory environment. And
each one of you, with your presence here today and your
testimony, has added immeasurably to our understanding of why
we need to modernize some of the laws and regulations that we
have with the mining industry today.
And as I said a minute ago, if we are to have a viable
mining industry in the future, we have to deal with the post-
effects of mining, like any other issue. If you cannot solve
the post-effects of mining, mining will not ultimately be an
acceptable use of our public lands. So by having an acceptable
post-mining use of public land, we will have less resistance to
mining in the future, we will have greater opportunities for
the public to once again enjoy land. In fact, we can improve, I
think, both the future of mining and the future of the post-
reclamation utilization of the mining land. And to me, that is
in the best interest of the public. It is in the best interest
of the country to have a viable mining industry and a smart,
sustainable end use of the infrastructure and the land after
mining is completed.
So I want to thank each and every one of you for your
contribution to this Committee's understanding to supporting
our record of where we need to go with mining and to really
giving out, I think, a great deal of hope to an industry which
is facing some rather difficult times for the future, of why
they are moving out of this country because of the
obstructionism of not only Government, but people who don't
understand that we can have a viable end use for this mining
land. And each one of you has added immeasurably to our
understanding and to the knowledge base that this Committee is
going to carry forward as it looks at how we do modernization
of the mining law--how do we look at the NEPA process and end
results. Because if we can improve what our mining industry has
started, then I think we have improved the future of this
country. We need a viable industry and we need to be able to
supply the resources this country needs. And to me, this
sustainable community post-mine closure is a win-win situation
for everyone involved.
And certainly, I think there ought to be a great deal of
excitement both from the business, both from the resources,
both--I should say not just ``both'' because I am going to add
a third--from the environmental standpoint to the process.
So with that long statement, I am going to again thank each
and every one of you for your presence here today and for
helping us, as I said, better understand this issue. And with
that, this hearing is adjourned. Thank you very much.
[Whereupon, at 11:27 a.m., the Subcommittee was adjourned.]