Voters to decide mining's future

MISSOULA, Mont. - Two years ago, a broad coalition of environmentalists, ranchers and politicians put an initiative on Montana's ballot to force mining companies to clean up their wastewater before dumping it into rivers. The initiative failed after the mining industry spent $2 million convincing voters that tighter water standards would affect anyone who washed water into rivers or down the drain - including ranchers and even hairdressers (HCN, 12/22/97).

But there's no mistaking the target of the latest initiative. On election day, Montana voters will decide whether to ban construction or expansion of open-pit, heap-leach gold and silver mines. The initiative, I-137, takes direct aim at the McDonald gold mine planned near the banks of the Blackfoot River. Other mine proposals would also be outlawed, though existing mines would only be affected if they were to request a permit to expand.

If the initiative passes, Montana's state motto, "Oro y Plata," Spanish for "Gold and Silver," could soon become an anachronism - unless gold and silver miners are willing to go back to the days of pick and shovel.

Changing fortunes

Heap-leach mining, pioneered in the 1980s by the Spokane-based Pegasus Mining Co., involves excavating entire mountainsides. Piles of crushed ore are sprayed with a cyanide-based solution which washes gold particles out of the rubble. The technique allows miners to extract gold from extremely low-grade ore, but critics say it leaves toxic messes and pollutes waterways.

"Allowing cyanide-leach or vat-leach mines was a mistake in the first place, and now we should fix it," said Jim Jensen, with the Montana Environmental Information Center, the group that spearheaded the initiative drive. "I thought (a ballot initiative) would be the fairest way of deciding this issue."

This initiative may have a better chance of passing than the ill-fated 1996 Clean Water Initiative because of the changing fortunes of the mining industry. Over the last two years, low gold prices have sent the gold-mining industry into a tailspin. The fall has been headlined in a steady stream of negative news stories and editorials in Montana newspapers.

In January, Pegasus Mining Corp. declared bankruptcy, leaving some doubts about whether it can properly reclaim its Zortman and Landusky gold mines in the Little Rocky Mountains in central Montana. About the same time, the company awarded its managers millions of dollars in "golden parachutes' to remain with the firm, while informing its shareholders they wouldn't get a dime. The state is now demanding that the company pay $8.5 million in bonds to clean up the Zortman and Landusky mines, according to Montana Department of Environmental Quality Director Mark Simonich.

Even bigger news comes from the banks of the Blackfoot River, about 15 miles east of Lincoln, Mont., where Canyon Resources has proposed the McDonald gold mine. The company lost its major financial backer in January 1997, when copper giant Phelps Dodge backed out of the project. A search for new investors has found no takers, and the company has laid off all but three of its employees.

Now, Canyon Resources doesn't have enough money to continue paying for an environmental impact statement, a prerequisite for a state mining permit. The company missed three payments to the state this summer, totaling about $500,000. In response, officials from the Montana Department of Environmental Quality shut down the environmental study in July, and the department has threatened to sue Canyon Resources for the missed payments.

All the bad press "is bound to have an impact on how people vote on the referendum," said Haley Beaudry, a Montana state representative from Butte.

But the mining industry cannot legally campaign against I-137, thanks to a 1996 initiative that banned corporate involvement in the initiative process.

"I don't know what anyone could do to counter the negative publicity," said an industry spokesman who asked to remain anonymous because, ironically, he said his comments might violate the law against corporate involvement. "There are no extra resources to do anything with, anyway."

The tide turns

Around the Treasure State, the tide seems to be turning against mining, even in traditionally pro-industry towns. A recent poll conducted by a University of Montana sociologist confirmed widespread discontent over the McDonald mine proposal. The survey of residents in four towns near the proposed site, including Lincoln, found 51 percent of the people were against the mine.

Sentiment is even changing in Zortman, where Pegasus Corp. rallied its workers two years ago to defeat the Clean Water Initiative. At the time, the company was in the middle of applying for a permit to expand the Zortman mine.

"They told us that the initiative was bad for mining, and that if they got the permit they would be here for the long run," said Dorene Lile, wife of a former miner in the town of Zortman. "The day after the initiative was defeated, they began laying off workers and decided not to expand the mine."

After more layoffs the following year, Zortman's population dropped from about 250 to about 60 residents.

Backers of I-137 are hoping hard experiences like those will turn into more votes supporting the ban.

"These events have made Montanans more aware of the risks associated with this type of mining," says Dan Kemmis, former mayor of Missoula and current director of the Center for the Rocky Mountain West, a think tank based in Missoula. "And it has heightened their determination to retain control of their own destiny and landscape."

The writer works in Missoula, Montana.

You can contact ...

* Montana Environmental Information Center, 406/443-2520;

* Canyon Resources, 406/362-4555.

• Energy & Industry