Black Hills ban confounds mining community

The sudden and unexpected announcement that minefinders might soon become outcasts in the Black Hills of South Dakota has angered some explorationists. It doesn’t help that operating mining companies in the Black Hills first proposed the ban.

“It’s a very short-sighted approach that virtually abandons the industry for the sake of one or two operating properties,” said David Rovig, president of Crown Butte Resources (VSE).

Jack Marton, a private would-be minefinder with an underground prospect in the southern Black Hills, said “I’m not a big company. I’m real nervous about this.”

Crown Butte and Noranda Exploration, a unit of Noranda (TSE), operate a Black Hills gold project that was scrubbed because the proposal will seek a 2-year moratorium on new mine development and limit expansions of existing mines. South Dakota Governor George Mickelson will guide the bill through the legislature.

Timothy Edman, the governor’s senior adviser on natural resources, told The Northern Miner in a telephone interview that “we are trying to reach the common man and introduce some common sense.”

Homestake Mining (NYSE) and several other Black Hills operators proposed the ban to defuse a volatile situation between miners, on the one side, and anti-mining groups and environmentalists on the other.

“The other alternative (a limit on total minable acreage in the state) was w orse,” said Luke Russell of Wharf Resources (TSE), another Black Hills mining company. “Noranda could have been out totally. Now they’re probably only delayed.”

Walter Nash, director of U.S. exploration for Noranda, sees it in a different light. Taken completely off-guard, he was shocked by the proposal. “If this gets passed (by the state legislature), it (the prospects for mining) will get worse. I doubt it (the moratorium) will ever get repealed.”

The proposal would prohibit new mine development until January, 1992, and limit mine expansions on operating properties to no more than 200 additional acres. Expansion acreage must be replaced with equivalent acres of reclaimed ground.

As well as Homestake’s support, the initiative has the blessing of MinVen Gold (TSE), Wharf, United Coin Mines (TSE) and Bond Gold (TSE), all of which have heap leach mines in the Black Hills.

At first glance such an initiative seems perplexing, coming as it does from mining companies. However, in the bitter Black Hills tug-of-war between miners and environmentalists, the mining companies felt a ban might reduce hostilities and convince a less partial general public that miners are sensitive to environmental concerns. The miners are awaiting an environmental report on the cumulative impact of their current operations. They and the governor’s office hope that the report will elevate the debate to a more rational, technical level.

Robert Barnes, mine manager at Wharf’s Annie Creek mine, said that, while drastic, the measure also could forestall a referendum over the total minable acreage in the Black Hills, the state’s vacation playground.

A group calling itself the Surface Mining Initiative Fund (SMIF) plans to seek a public vote this year to limit large-scale Black Hills mines to an aggregate 3,100 acres without reclamation. So far, the miners’ proposal for a 2-year ban has not blunted the SMIF initiative.

Because of the proposed moratorium, an expansion planned at MinVen’s Gilt Edge property will be delayed for up to one year. But limits to expansion should not affect Bond Gold’s Richmond Hill project, Wharf’s Annie Creek and Foley Ridge operations or the Golden Reward mine, a joint venture between United Coin Mines and MinVen. Accommodating the acre-for-acre reclamation rule might require some tinkering with mine plans as pit perimeters expand.

Goldstake Exploration (TSE) has shelved its Stowell property near the Homestake mine, but the Whitewood Creek tailings project, which lies outside the Black Hills boundary, will not be affected.