EDITORIAL & OPINION — Expropriation without compensation — Montana’s I-137

Imagine spending US$70 million acquiring, exploring and developing a gold-silver deposit and then having it placed in perpetual limbo by two government initiatives: one, banning your project; the other, prohibiting you from campaigning against the ban.

Irked already? Imagine how poor Canyon Resources feels. Over the course of a decade, the company and its partners spent a tidy sum proving up 5.4 million oz. gold and 11.1 million oz. silver within the McDonald and Seven-Up Pete gold-silver deposits in Montana. Then the anti-mining forces put their pinheads together and went to work.

The plan they came up with was ingenious and devious. They proposed an anti-cyanide mining initiative, I-137, and got it placed on the ballot for the November 1998 general election. That put mining companies, including Canyon, in the unenviable position of having to campaign in favour of a compound with some pretty nasty baggage.

The obvious solution was education, making sure residents understood that cyanide’s benefits to society are significant, and far outweigh the risks when properly managed; that it is not carcinogenic, mutagenic, or bioaccumulative; and that it is a simple compound of carbon and nitrogen — common elements from which the chemical building blocks of life itself evolved.

But the anti-mining forces had them stymied here too. For most of the campaign period, mining companies and employees were prevented from campaigning against the initiative, owing to a previously passed initiative, I-125, which prohibited campaign expenditures by “for profit” entities.

Fortunately, a federal judge declared the prohibition “unconstitutional.” Unfortunately, the ruling came only ten days before the election. It was too late; the anti-mining forces were long out of the gate.

Initiative I-137 passed, by a vote of 52% to 48%, resulting in a state-wide ban on the use of cyanide in processing gold and silver ores mined by open-pit methods. Canyon, among other mining companies, was prevented from permitting and developing its mining projects in the state.

As might be expected, the mining industry and Canyon did not take all of this lying down. Lawsuits have been filed against I-137, one based on the denial of the opportunity to campaign (because of I-125) until the last few days of the campaign. The other is based on due process considerations, in that I-137 resulted in the “taking” of property without any compelling public policy interest, or any compensation.

The industry has launched an effort to place a new initiative on the ballot for the next general election, which, if passed, would negate I-137. And Canyon is planning a “takings” lawsuit against the state of Montana for the value of its deposits. Estimates for the lost net value are as high as US$600 million.

Initiative I-137, when combined with I-125, is an underhanded attempt to deny mining companies their rights under U.S. law. It is an attempt to circumvent property rights that should not be allowed to stand.

Worse than that, it is fear-mongering based on bad science. Cyanide, if properly used, poses few risks — indeed, one is many thousands of times more likely to die in a motor vehicle accident or simply from falling down. And the few accidental (and intentional) deaths that have resulting from cyanide exposure occurred in and around the home, not the workplace.

The U.S. government’s own data show that nearly 90% of the cyanide released into the atmosphere in the U.S. originates from automobile exhaust, whereas about two-thirds of cyanide entering surface waters is discharged from municipal sewage plants. Do we ban them too?

As an ingredient in road salt, as much or more cyanide can be released into the environment during a single winter in a major northeastern American city as is released annually from all U.S. mining operations combined. Do we ban road salt too?

If Montana wants to ban cyanide, so be it. But to be fair, it should also prohibit cars, sewage plants and road salt, and the many vegetables, animals, insects, fungi and bacteria that produce cyanide.

More importantly, the state of Montana should pay for what it has effectively expropriated, and at fair market prices.