Around the Nation
Mon January 28, 2013
New Gold Rush Has Little Luster For Some In The Golden State
Originally published on Mon January 28, 2013 5:23 pm
Gold mines are reopening in California, some dating all the way back to the Gold Rush. Soaring gold prices are drawing mining companies back into the Sierra Nevada foothills. But some communities fear the effect on local environments.
Dan Boitano, a fifth-generation miner, has been working as a tour guide in the Golden State's historic gold country. His family has been around since the Gold Rush.
Up until a few years ago, he was still guiding tours for visitors.
"We would start by lining everybody up on the side of the old shop building and getting them into hard hats," he says.
Boitano would then lead tourists into an empty underground gold mine — the Lincoln Project Mine in Sutter Creek, Calif. In the late 1840s, miners flooded to these foothills when gold was discovered nearby.
Today, Boitano still works in the same mine, but he's not leading tours anymore because that mine is back in the gold business.
Tough Regulatory Climate
Hundreds of feet below ground inside a jagged tunnel, two miners drill into a solid face of rock.
Matt Collins, CEO of Sutter Gold Mining — the company that's reopening the mine — pulls a small sample of gold out of his pocket, about the size of a button.
"This is the first of what we hope will be many, many, many, many, many ounces of gold," he says.
They're looking at almost $200 million in gold over the next five years. The company is just starting production in narrow tunnels that get darker and narrower the deeper you walk in them.
"Remember when they first started mining here, they would have been mining with candles," Collins says while inside the Mother Lode, the most legendary gold deposit in the state. Those mines produced millions of ounces of gold until World War II, when the industry was suspended during the war effort.
"After having let the mines flood, the timbers rot, the neglect and the lack of maintenance, it became very expensive to reopen the mines," Collins says.
But there's still plenty of gold there, he says. With gold prices around $1,700 per ounce, reopening old mines has become lucrative, but not necessarily easy.
"California is burdensome," Collins says. "I would say this is one of the toughest regulatory climates there is on the planet."
Environmental Affects Of Mining
Those regulations come from mining's legacy of environmental damage in the state. Early miners processed gold with mercury, dumping millions of pounds of it into the watershed. Some fish still aren't safe to eat.
Hard rock mines in California don't use mercury anymore, but that's not the case in other countries.
"Gold mining around the world is heartbreaking to think about," says Izzy Martin, CEO of the Sierra Fund.
She says toxic chemicals are common in places like South America.
"There's no doubt that if we could open a mine in California that met our environmental quality act standards, it would be the cleanest, greenest gold in the world," she says.
But that doesn't mean gold mining comes without environmental risk in California, she says. Some communities are still feeling the effects of recent mining.
California Communities Hit
Kurt Lorenz used to be on the Nevada City, Calif., school board in the 1990s, when the San Juan Ridge gold mine started up nearby. The miners accidentally hit groundwater and had to pump millions of gallons out of the mine as water flooded in.
He says neighborhood wells "started to go dry."
In all, 14 nearby area wells dried up. The business paid for deeper wells and a water treatment plant, but Lorenz says the problems continued.
"The school was told, 'You can't drink the water,' " Lorenz says. "The solution was that the mine started paying for bottled water to be delivered to the school."
The mine shut down after only a few years, but now it's looking to reopen.
"I don't expect the community to take any significant risks for the benefit of my operation," says Tim Callaway, CEO of San Juan Mining Corporation.
The risks are lower this time, he says, because the business will use better surveying and engineering.
Callaway knows it's a tough sell in this town, but he hopes the economic aspect will draw community members.
"What this project offers is really high-paying jobs," he says. "There are very, very few industries or jobs in rural communities."
Callaway says gold mining deserves a place in California. It's a legacy that his mine — and several other proposed mines — is hoping to continue.