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All That Glitters
Controversial gold mining project would benefit tiny Montana Tech


By Kathy Witkowsky

BUTTE, MONTANA
Dean Pete Knudsen of Montana Tech, in front of a statue of "Copper King" Marcus Daly that stands at the campus enterance.
ON A CLEAR, chilly late fall afternoon in Butte, eight Montana Tech students sit in a basement classroom of the school's Mining and Geology building, diligently typing commands into their computers. When they successfully enter the correct information, their screens display a 3-D image of a viable open-pit gold mine-a hollow, multi-tiered cake turned upside down and set into the ground. "If you can't grow it, you have to mine it," said graduate student Kevin McDonough, echoing a popular phrase on campus, and explaining why he chose his course of study.

For the students enrolled in this "Computer-Aided Mine Design" class, the assignment is just one more step toward completing their education as mining or geological engineers. When they graduate, they are almost assured of employment: Montana Tech, once known as the Montana School of Mines, has one of the nation's largest and best respected mining departments, last year boasting a 92 percent job placement rate for its students-100 percent for mining engineers.

The worldwide boom in the mining industry is considered good news for the school. "My job is to train mining engineers," said Pete Knudsen, who teaches the mine design class and also is dean of Montana Tech's School of Mines. "If they don't have any place to work, why should we train them?"

Not only do mines generate jobs for alumni, but mining companies are among the school's largest corporate contributors. That is because the companies count on Tech to provide high-quality employees, Knudsen said.

Now the school stands poised to receive its biggest single windfall ever-from an enormous open-pit gold mine proposed near Lincoln, Montana. The core of the Seven-Up Pete Joint Venture (named for a legendary local miner), also known as the McDonald Gold Project, is situated on state trust land earmarked to benefit Montana Tech. If approved, the project would generate an estimated $60 million in royalties for the school. The money would be kept in trust, eventually earning approximately $3.4 million each year in interest-about one-fifth the school's current total annual operating budget.

"We're looking forward to the productive use of that resource to benefit Montana Tech," said John Hintz, vice chancellor for administrative and student affairs. Hintz' enthusiasm for the project should come as no surprise: Tech faces a half-million dollar budget shortfall this year.

But not everyone agrees the proposed mine is such a great idea. Its location, in a scenic and environmentally strategic area, and its enormous scale have made it the focus of an intense battle waged by environmental groups. Wedged a quarter mile from the confluence of the Blackfoot River and the Landers Fork, about six miles west of the Continental Divide, the proposed pit alone would be a mile long, three quarters of a mile wide and as much as 1,500 feet deep. The entire operation would cover four square miles.

Environmentalists charge that the proposed mine threatens the water quality and fisheries of the Blackfoot River. Long beloved by Montanans, the waterway gained international fame as the setting of A River Runs Through It, author Norman Maclean's tale of flyfishing and family, popularized by a Hollywood film.

The mine's potential to pollute the river recently prompted American Rivers, a Washington, D.C.-based conservation group, to include the Blackfoot on its list of the nation's 20 most threatened rivers.

"There are some places that are mineable with acceptable risks to the environment and there are some places that aren't. And this is a place where the risks are unacceptable," said Jim Jensen, executive director of the Montana Environmental Information Center (MEIC), which is at the forefront of a coalition of environmental organizations trying to stop the mine.

A view of Butte, Montana, home of Montana Tech. In the middle distance is one of the many mining "gallows" that still stand, though no longer in use.
According to critics, those risks are numerous, given the cyanide heap-leach technology the mine would employ. Simply put, this is how the process works: The ore-laden rock is dynamited and stacked into piles 300 feet high. When a cyanide solution is trickled through the piles, the gold bonds with the cyanide, then leaches to the bottom of the pile, where it is recovered from plastic liner pads. The cyanide is channeled into holding ponds.

Critics of the mine say studies show the plastic liners-which are about the thickness of a nickel-often leak. Even a tiny amount of cyanide could be devastating to fisheries in nearby streams, and might even contaminate groundwater. Although cyanide breaks down quickly when exposed to sunlight and oxygen, it can persist indefinitely without those elements.

Mine opponents also charge that the mine pit may generate toxic acid-mine drainage, which occurs when sulfide rock is exposed to oxygen and water; the resulting acid breaks down surrounding heavy metals, which can then run off into surrounding waterways. That is what happened in Butte's Berkeley Pit. Once the largest truck-operated open-pit mine in the nation, it is currently filling with water that has alkaline content similar to battery acid.

Lastly, mine opponents charge that plans to pump out and re-route seven million gallons of water each day to keep the pit dry during the life of the mine could threaten the area's hydrology. Nearby streams serve as spawning grounds for endangered bull trout, as well as native cutthroats, rainbows, browns and brookies.

By protecting the river, environmental groups say, they are doing more than preserving the environment. They also are protecting the ranching, fishing and recreational economies of the Blackfoot River valley.

Mine spokesman Bill Snoddy said mine opponents are presenting a false dichotomy. Montana, he said, can have both the mine-with the estimated $117 million it will generate in total revenues for the state-and the river, which by itself generates an estimated $7.5 million annually in fishing dollars.

Company - financed tests indicate the mine site contains extremely low quantities of sulfide rock, plus large amounts of calcium carbonate, which acts as an acid buffer. Therefore, Snoddy said, it poses only an extremely low risk of acid-mine drainage. The company's reclamation plan, in fact, calls for the pit to fill up with water after the ore has been mined; Snoddy promised the result will be a clean lake, able to support aquatic life. Critics sneer at that suggestion, and say it is simply a way for the company to avoid the costs inherent in reclaiming the pit.

As for cyanide leaks, Snoddy said the mine's design protects more than adequately against them. "Our project is going to be economically a boon to the state," he argued. "Environmentally it's going to be a boon to the state, and we're happy to let people know that. By demonstrating here how good mining can be, it will help the state overcome some fears about the industry."

Thanks, but no thanks, say mine opponents, who have heard similar reassurances in the past from mining companies that have gone on to pollute. Spokane-based Pegasus Gold Inc., for instance, recently settled a $37 million lawsuit stemming from violations of the Clean Water Act at its Zortman and Landusky mines in eastern Montana-which also are cyanide heap-leach gold mines.

"I don't trust these mining companies or bureaucrats when they say, 'Oh, everything will be fine,'" said MEIC's Jensen. "The evidence is absolutely, irrefutably clear: Cyanide heap-leach gold mining causes damage to water, damage to the land. Wildlife is killed, birds are killed, and economies are disrupted."

But mine spokesman Snoddy vehemently disagreed. He compared the use of cyanide heap-leach technology to hiking in areas populated by grizzly bears. Both, he said, are manageable risks.

Administration of the state's nearly six million acres falls to the State Board of Land Commissioners, a group of five elected officials chaired by the Montana governor. According to Montana Tech officials, the size and complexity of the project should not keep the Land Board from approving it. "The intent of the land grant is to benefit the school," said Vice Chancellor John Hintz. "We know that the safe use of our resources is not only possible, we enable it through our training programs."

Furthermore, Tech faculty often contract as consultants to mining companies-a practice that is strongly encouraged. Graduate school director John Brower works on retainer for the McDonald Gold Project as an independent consultant. Mining School Dean Knudsen has consulted in the past for Canyon Resources, which owns the McDonald Gold Project. Montana Tech's outgoing chancellor, Lindsay Norman, serves on the board of directors for Pegasus Gold Inc., which operates the Zortman and Landusky mines. And the acting director of the McDonald Gold Project is a Montana Tech alumnus.

"That's one of the reasons our students are popular," said Graduate School Director Brower. "They're exposed to people who have a lot of contact with the industry." Brower rejects any notion that the money at stake might sway his or his colleagues' opinions about the mine. "It'd be a different matter if we all knew we were going to get $50,000 bonuses," he said. Instead, the money would be folded into Tech's general operating budget.

Mine opponents say the Land Board needs to look beyond Montana Tech's budget when they consider the McDonald Gold Project. They point out that, unlike copper or other metals, gold is simply a luxury: More than 80 percent of the gold mined each year is used for jewelry. "We want [Montanans] to contact their elected officials and tell them no!" said an adamant Jensen. "The Blackfoot's more important than gold."

"I don't trust these mining companies and bureaucrats," says Jim Jenson, executive director of the Montana Environmental Information Center.
In 1889, no one knew that Section Six of Township 14-North, Range Eight-West, contained copious amounts of gold: 6.3 million recoverable ounces, worth more than $1.5 billion at today's market rate. It was merely by chance that, under the Enabling Act, the federal government chose to grant that particular plot of land to the Montana School of Mines-now called Montana Tech.

Explorations did not reveal the gold, which is microscopic, until nearly a hundred years later. Even if the gold had been detected previously, it is unlikely that anyone would have cared. Such low-grade ore can earn a profit only with today's modern cyanide heap-leach technology.

But today that land-which sits just eight miles northeast of the town of Lincoln, once briefly famous as home to Unabomber suspect Ted Kaczynski-has become extraordinarily valuable.

That the proposed mine will benefit Butte-based Montana Tech is either a fantastic coincidence or a terrible irony, depending on your perspective.

Once called the "richest hill on earth," Butte was for a century home to an enormous copper mining industry. Birthplace of Local Miners Union # 1 of the Western Federation of Miners, its mining legacy still permeates the city-in both attitudes and architecture.

A statue of Marcus Daly, one of the two so-called "Copper Kings" who brought fame and fortune to the city, presides over the entrance to the Montana Tech campus. And the World Museum of Mining, a facsimile of a 19th-century mining town, sits just next door. From the Montana Tech campus, you can still see the mining frames that dot the city's neighborhoods.

Two miles east, the Berkeley Pit, a square-mile hole in the ground, is filling up with water so toxic that in 1995 it fatally poisoned more than 300 migrating snow geese that mistook the water for a healthy rest stop.

Visitors can stand on an overlook there, listening to a pre-recorded explanation of the history of "The Pit." The recording doesn't mention that "The Pit" anchors the nation's largest Superfund toxic cleanup site, which stretches 120 miles along the Clark Fork River.

The citizens of Butte appear to be indifferent toward this legacy. "Half the people in Butte don't know the [McDonald Gold] project exists," said School of Mines Dean Knudsen. Added Vice Chancellor Hintz: "We don't consider it much of a controversy." Why not? "It's just another mine," one student said with a shrug. "There are mines being permitted and constructed all over the world daily."

Spokesman Bill Snoddy, who disputes charges that the mine will pollute the environment, says it would create jobs for Montanans. Behind Snoddy is a graphic for the proposed project.
During a visit to a "mine waste dumps" class, six of eight students said mining-assuming plans conform to state and federal environmental regulations-is appropriate virtually everywhere, including within national parks. That is because they have learned that it can be done safely, the students said. "I'd mine it all!" declared one young man, apparently in complete sincerity.

The school's geographical and intellectual isolation along the Continental Divide has Tech "hermetically sealed," said John Ray, a professor of speech and political science. Ray is one of two faculty members vocally opposed to the mine (the other is his wife). "I have no doubt if a vote were taken on campus [about the McDonald Gold Project] among the students the overwhelming winner would be, 'What are you talking about?'"

Ray, who serves on the board of the Montana Environmental Information Center, is hoping to puncture the "hermetic seal" in early 1998 with a conference he is arranging on the McDonald Gold Project.

The potential income from the mine doesn't create the school's pro-mining bias, but it certainly reinforces it, Ray said.

"It's a gold mine in more ways than one," acknowledged John Brower, a professor of mineral economics and director of Montana Tech's graduate school.

The money is sorely needed, and so are the in-state jobs, said mine proponents. "We are a great source of employment-for jobs in Nevada," said a frustrated Brower. "Nevada is expanding their mining industry and ours is contracting. Montanans want to live in Montana. They want to see this thing go simply because it will provide employment where they want to live."

Mining provides just 5,400 jobs in Montana, about 1.3 percent of the total employment. But mining jobs pay considerably better than most Montana occupations: A company-financed study predicted that workers at the McDonald Gold Project would earn an average $34,000 a year, well above the state's average annual wage of $21,000.

It is likely more will be hired if the mine is approved, said project spokesman Snoddy. The mine is expected to provide about 385 jobs over its 12-year lifespan, he said. About 40 of those hires are expected to come from Lincoln, the rest from surrounding communities.

Still, opponents argue that the mine may cost more than it pays. "The old issue of, 'You have to have either jobs or the environment' has been turned on its head·Now in order to have jobs you have to have a clean environment," said former Democratic Congressman Pat Williams, who is currently a senior fellow at the Center for the Rocky Mountain West, a University of Montana think tank. "Because the cash register of the Northern Rockies is becoming predominated by tourism and recreation...that's where the jobs are."

Mining, with its relatively high-paying jobs, may bring short-term gains to local economies, but in the end the industry's boom and bust nature leaves the communities worse off than they were to start with, said Williams, a Butte native.

Lincoln, Montana, 8 miles from the proposed mine site, was briefly famous as the home of Unibomber suspect Ted Kaczynski.
The Land Board must make the final decision on the mine permit. The state constitution tells Land Board members that the "guiding principle is that these lands and funds are held in trust for the support of education and for the attainment of other worthy objects helpful to the well-being of the people of this state."

Although they routinely make decisions regarding leases for mining, drilling, logging and agriculture, the Land Board never has dealt with a project of this magnitude, said Randy Mosley, an assistant to the director at the Department of Natural Resources and Conservation, which manages the state trust lands. Montana Governor Marc Racicot has characterized the McDonald Gold Project as one of the most complex mining proposals ever considered by the state.

The Department of Environmental Quality (DEQ) is the state agency responsible for evaluating and permitting mine applications; since 1971, when the state began reviewing hard-rock mine applications, the agency and its precursor have denied only two permits out of more than 150 applications.

The DEQ is expected to make a decision on the McDonald Gold Project in early 1999. Then the Land Board must decide whether building a mine near Montana's Blackfoot River is the best way to fulfill its mission.

But the story is unlikely to end there. Almost everyone involved in the project believes that no matter what the DEQ and Land Board decide, the fate of the mine will ultimately be determined by a different institution: the courts.

Mine opponents are pursuing legal avenues to prevent the mine. At the same time they are waging a very visible political campaign in an attempt to persuade the Land Board to deny the mine permit. In Missoula, a progressive city located downstream from the proposed mine, and in Helena, the state capital, a popular bumpersticker reads, "The Blackfoot River: More Precious Than Gold." Rhythm and Blues singer Bonnie Raitt recently performed two concerts that earned $75,000 for groups fighting the mine.

Project supporters accuse mine opponents of using emotional arguments rather than facts to promote their cause. "There's a lot of emotion involved but I don't think there's any real risk," said School of Mines Dean Knudsen.

"Pseudo-science is a big part of some people's agenda," charged Hintz.

That's too convenient a response, said John Ray. "There's nothing wrong with being emotionally committed to protecting a natural resource," he said. "Any environmental group in this state has evidence and information to back up their points."

Besides, supporters of the project often employ similar tactics: After all, what could be more emotional than the issue of jobs-especially jobs for Montanans?

Land Board members have not indicated whether they will permit the mine. But "politics plays a part," acknowledged State Auditor Mark O'Keefe, whom many people suspect has his eye on the governorship. "Not only is the economic return important but the cultural character, the societal character of Montana is important. And the uses of these lands should be consistent with the wants, desires and needs of Montanans and their communities." In a recent poll commissioned by Lee Newspapers of Montana, 48 percent opposed the mine, 39 percent supported it, and 13 percent were undecided.

Meantime, the mine has been plagued by administrative changes and highly publicized charges of ineptitude and bias in the ongoing environmental review process. In September, the original majority partner, the copper giant Phelps-Dodge, pulled out of the project, selling its 72 percent interest to Canyon Resources, a relatively small Colorado gold-mining company with a troubled financial past.

The sale-for a paltry $5 million up front-was considered a victory by environmental groups, who said it showed that Phelps-Dodge realized the project wasn't feasible. And it prompted a skeptical editorial in the usually conservative Missoulian newspaper warning that "It will take enormous sums of money, an incredible commitment and much luck to mine the gold without harming the river and environs."

In October, a key player in the development of the mine's environmental impact statement resigned, criticizing members of the team as "inexperienced special- ists." Several weeks later, the spokesperson for the state Department of Environmental Quality quit, accusing the agency's top brass of controlling media access to information about that incident in order to further their own agenda.

And with gold prices at a 12-year low, even mine proponents at Montana Tech now question whether the proposed McDonald Gold Project will remain economically viable. Prompted by a report about the sagging financial fortunes of Pegasus Gold Inc., a second Missoulian editorial about the project also questioned the wisdom of banking on a gold company to finance the mine reclamation.

Bill Snoddy said that despite the negative publicity, Canyon Resources will continue to pursue the project.


Kathy Witkowsky is a freelance writer who lives in Missoula, Montana.

Photos by Michael Gallacher for CrossTalk

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