EDITORIAL & OPINION — Back-door victory — Congress saves Crown Jewel

The U.S. Congress recently used its considerable weight to overturn a bizarre technicality that had sidelined the plan of operations for the Crown Jewel gold project in the Okanagon Highlands of Washington state. The unexpected development was good news for joint-venture partners Battle Mountain Gold and Crown Resources, and for the entire mining industry. After seven long years of permitting and obstacle-jumping, Crown Jewel is back on the road to production.

However, before popping any champagne corks, it’s important to realize that the Crown Jewel about-face is a small victory, relative to the war of survival the mining industry has been waging these past few decades. And even this small victory was won by political muscle, rather than on its legal merits.

The American mining industry has no friend in Secretary Bruce Babbitt and his Department of the Interior. For years now, Babbitt has resorted to underhanded means to keep mining out of America. Pulling the rug out from under the Crown Jewel project was but the latest salvo in an anti-mining barrage.

In March, the departments of Interior and Agriculture vacated a plan of operation and voided a record of decision for Crown Jewel on a technicality over the number of mill site claims relative to lode claims.

Had Babbitt’s action been allowed to stand, it would have held mining companies to a strict interpretation of a clause that allows only one 5-acre mill site claim for every lode claim. And that would have had negative implications for all large-scale mining projects.

The ruling was both unexpected and unprecedented. During Crown Jewel’s long years of permitting, only once had this discrepancy been revealed (and then only in a minor document). Government officials never said the discrepancy was a critical one, and allowed permitting to continue as though nothing was wrong.

A reasonable person might suspect that Babbitt’s intent was to sabotage Crown’s 7-year struggle to secure permits for the operation. Recent court cases in Washington state and at the federal level had failed to stop development of the mine, which was only a step or two away from becoming a reality. The mill site discrepancy was Babbitt’s ace-in-the-hole, a technicality that effectively put the project on hold.

The reaction from the mining community was immediate and vocal. The industry lobbied lawmakers to do something to correct the injustice.

Slade Gorton, Republican senator for Washington state, stepped up to the plate, attaching approval of the gold mine on to a supplemental appropriations bill to approve US$15 billion in military spending for the war in Kosovo, as well as relief for victims of Hurricane Mitch in Central America, and victims of tornadoes in Oklahoma.

Gorton used an emergency bill, which received bipartisan support, in order to bypass an administration that has shown little or no interest in supporting the American mining industry.

One might argue that approving Crown Jewel as a “rider” on a more important bill was not the ideal way to resolve the situation. After all, the dispute was not settled by rule of law, science or reason, but as manoeuvre around a government bureaucrat with a blatant bias against mining. And although gold mining clearly has little to do with the war in the Balkans, one could make the case that the dismal gold price has laid waste to the industry, in much the same way as tornadoes have ravaged Oklahoma.

There was a risk, too, that environmentalists would point their collective finger at Gorton, as chairman of the senate appropriations committee, and at lobbyists for the National Mining Association, to show how big business stomps over individuals and the environment.

Gorton, who represents the citizens of Washington state and is known for his love of riders that benefit local constituents, has already received flak for his efforts on behalf of Crown Jewel, thereby thrusting closed-door politics into the national spotlight.

In an ideal world, the issue would have been settled on its own merits. Instead, Crown Jewel became a political football, largely because Babbitt’s hardline, anti-mining stance poisoned any chance of negotiating a fair settlement.

Until Babbitt made his move at Crown Jewel, regulators had not held up other operations by citing the mill site claims technicality. Now that this specific dispute has been taken off the table, will other projects be affected? And if Babbitt attempts to use the technicality again to stall another project, will the owners have to seek a political saviour, as was the case with Crown Jewel?

Also unresolved is the underlying issue of differing interpretations about the adequacy of the 1872 Mining Law on the eve of the 21st century. And the industry still has to work at convincing the public that mining is a necessary and responsible part of the American economy.

We may have won the battle over Crown Jewel, thanks to the efforts of the industry and Senator Gorton. But much work remains to be done to win the war.