Small mines stay under the radar

Environmental laws, designed to regulate the big boys, overlook some big messes


VIRGINIA CITY, Mont. - This little town was once the capital of Montana and thanks to a rich vein of gold, the bustling economic center of the state. Today, it is preserved as a historic mining district. The town's Old West flavor has been officially canonized by the state Legislature, its Victorian era architecture restored.

The land, too, remains a historical monument: The gravel bars of old placer mines are humped along the streambanks, the leavings of 268 years of gold mining.

Large-scale mining is in full retreat in Montana in the face of tough state environmental laws and a 1998 ballot initiative that banned cyanide heap-leach mining (HCN, 11/8/99: Court enforces a healthy environment); but around Virginia City and across Montana small-scale mining operations continue.

As in every other state, regulations on small miners here are minimal. Those who disturb five acres or less at a time are exempt from the Montana Environmental Policy Act. They have to post little in the way of a reclamation bond - it was raised from $5,000 to $10,000 in the mid-1990s - and there are no reclamation requirements at all for most small-timers. This means private landowners and the state are left with cleanup costs that can run into the millions.

According to Pete Strazdas, who oversees small mines for the Montana Department of Environmental Quality, out of 580 active small mining claims in the state, 462 are operating virtually unrestricted.

Miners cut and run

Small-scale miners are wreaking as much havoc as ever, according to rancher Bill McGinnis, who owns the 18,000-acre Cal Creek Ranch just east of Virginia City. McGinnis has worked with The Nature Conservancy to preserve ranchland in Arizona, and he and his staff take pride in the operation on the Cal Creek Ranch.

"It's a lot of tough, rocky, dry country. It's not a cow-calf operation; we run yearlings. It's a good place to do that," says ranch manager Chris Koonce, a former Coloradan with a background in wildlife biology. "The ranch, some parts of it, are really spectacular and beautiful. Then you drive by this mess."

"This mess" is a football field-size pit, deep as a two-story house, surrounded by knapweed and abandoned equipment, with puddles in the bottom where the creek in Brown's Gulch used to run.

The worst of the damage was caused by the Brown's Gulch Mining Company, the proprietors of which fled Montana in the middle of the night in 1989 after being confronted belatedly by understaffed state regulators. Strazdas says the company reportedly smuggled out "Seven-Up bottles full of gold," but left behind only a $30,000 reclamation bond, which paid for a drain to safeguard the ranch's irrigation system.

"What we've ended up with is this big hole," Koonce says. "The estimate for reclamation is into the multiple millions of dollars and there's no money available to do it. It's very frustrating. There are these situations all over the state."

Alan Septoff, of the Washington, D.C.-based Mineral Policy Center, says no one knows what kind of cumulative effects small mines are having. "There's not a whole lot of information out there, because the BLM doesn't really keep track," he says.

But Strazdas says he knows his home turf pretty well, and the answer in Montana is not pretty. "How much of an unreclaimed mess do they leave?" he asks. "Quite a bit."

Wanted: a few good rules

This summer, a new mining company arrived on the Brown's Gulch claim. McGinnis and Koonce worry that another small operation is going to take a bite out of the land and leave them to clean up an even bigger mess.

Their concerns are not unfounded, according to 30-year mining veteran Bob Decker, who is managing the mining operation for a company called Great Rocky Mountain Gold, owned by Utah businessman Ken Hamilton. "Most small miners have good intentions," he says. "But when the economic viability of a project does not pan out, that's where they get in trouble, because they don't have deep-enough pockets if something goes haywire."

As an example, he points to a broken dragline in Brown's Gulch. "We had a gear strip in the gear box in that thing, and it's devastating to us, it's going to cost probably $30,000 to $40,000, in that neighborhood, just to repair that dragline," he says. "I mean, the big companies waste that much every month; they throw it away."

But Decker says he intends to minimize problems in Brown's Gulch by doing his homework on the ore body, putting up an $80,000 reclamation bond, and cleaning up as he goes along. In two or three years, if all goes well, his company will walk away with between $6 million and $12 million in gold, while the land will be in better shape than it is now.

"I hate to say it because it's going to kill probably half the small miners, but bonding is going to have to be taken into consideration," he says. "In other words, you're going to have to collect enough bond so that if the guy walks, then you can hire a contractor or somebody to come in and do the reclamation and not let the people in Montana or New York, their taxes pay for it."

Miners should be required to clean things up as they work, he adds. "If the property is not profitable enough for them to reclaim the ground as they're mining, then they shouldn't be mining it. It's that simple."

Any changes to state mining rules, however, would have to come from the Legislature. Pete Strazdas says the Department of Environmental Quality has no plans to request changes during the next legislative session.

The author writes from Montana's Paradise Valley.


  • Alan Septoff with the Mineral Policy Center, 1612 K St. NW, Suite 808, Washington, DC 20006 (202/887-1872);
  • Pete Strazdas with the Montana Department of Environmental Quality, P.O. Box 200901, Helena, MT 59620 (406/444-2544).

Copyright © 2000 HCN and Andrea Barnett

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