Wednesday, August 31, 2011

Is Idaho mining dead or alive?

Traditional industry sees resurgence


By KATHERINE WUTZ
Express Staff Writer

The Minnie Moore Mine is located along the Big Wood River near Bellevue. Photo by Mountain Express

Mention the word "mining," especially during Wagon Days, and the images that leap to mind involve grizzled old prospectors in creeks panning for gold, or ore wagons heaped with galena being pulled by jerkline mules. But is mining still alive in 2011?

The answer, according to Russ Bjorkland, minerals management specialist with the Salmon-Challis National Forest, is yes. Active mining claims still produce ore throughout Forest Service lands, though the materials are different than during the days of the Old West.

"Traditionally, what this forest provided was gold," Bjorkland said. "We've had a number of large gold mines. [Now,] there are no active large gold mines on the forest."

The largest mine, Thompson Creek Mine, between Challis and Clayton, excavates molybdenum, a metal used in the production of high-strength steel alloys for aircraft parts, industrial motors and other similar uses.

The 3,000-acre open-pit mine is the fourth-largest molybdenum mine in the country, and mine company data indicate that it still has more than 34 million tons of metal to extract from the area.

Tom Bergin, director of Blaine County Land Use and Building Services, said mining is still active in Blaine County, though materials have shifted a bit.

Veins of silver, carbonate and galena ore once ran throughout the Wood River Valley, but Bergin said prospectors seem to have shifted from subsurface mining of lead and silver to mining rock, gravel and topsoil.

Even the Minnie Moore Mine southwest of Bellevue has made the change, Bergin said.

But the mine is still active, as evidenced by the calls Bergin said he continues to receive complaints from the mine's adjacent landowners about the noise and dust produced there. The mine appears to have been hurt slightly by the decrease in the construction industry, he said, but is still going strong.

Bjorkland said the mines on the Salmon-Challis are not only still active, they're growing. Thompson Creek Mining Co. submitted a proposal to the Forest Service last summer to almost double its operations. The proposal is still going through the environmental impact statement process.

Construction has already begun on a new cobalt mine just outside of Salmon, which Bjorkland said would be the only cobalt mine in Idaho.

He added that he's seen a marked increase in mining inquiries since the prices of precious metals began to rise earlier this year, and small exploratory companies have become more active.

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"Demand has definitely increased," he said. "More and more, what you're finding is smaller companies going out on their own, trying to find gold, developing the claim to the point where they have a reserve identified, then trying to sell [the claim] to a larger company."

Gov. Butch Otter has long been a champion for traditional economic drivers such as livestock, logging and mining, said Jon Hanian, the governor's spokesman. Hanian said the governor's office has noticed the growing interest in mining as well.

"We're seeing a bit of a resurgence given what we are seeing with the precious metals and minerals prices increasing," Hanian said. "In the case of gold, we are seeing dramatic jumps in price."

But Bjorkland said only existing mines are likely to profit from the rise in prices.

"It's make hay in the sunshine, and if you have a mine and you're set to produce right now, it's a good time," he said. "But just because prices are high doesn't mean [new mines] can capture the market. The permitting process—the market would shift by the time you got through that."

Hanian said the mining growth and rise in prices could help the state recover from the recession, as they provide opportunities for job creation. The cobalt mine, for example, is set to employ 150 people, many of whom lost jobs when the nearby Bear Track Mine closed.

"We need to advance on all fronts when it comes to the economy, and no one segment is going to be the solution," Hanian said. "However, when you look historically, a lot of the wealth that has come from this state has come out of mines."

But is it enough? Gold prices have leapt to $1,757 an ounce at last count, which means that even a modest 300,000-ounce operation such as the Musgrove Creek Mine in Lemhi County is literally sitting on almost $5.3 billion.

But the numbers are misleading, Bjorkland said.

"That's not just pure profit," he said.

Mines have enormous amounts of overhead, and companies must build roads, find equipment and build facilities as well as process all of their materials.

Bjorkland said larger companies are looking for deposits of more than 1 million ounces in gold in order to make a profit—deposits that are few and far between.

Despite the obstacles, Hanian said, the governor believes mining is here to stay.

"Mining has historically been an important player in our economy, and that will continue and, in all likelihood, grow," he said. "We think that it has a bright future."

Katherine Wutz: kwutz@mtexpress.com

Historic Mines

Looking for more on the valley's mining past? Search our website, mtexpress.com, for the article titled "In 1800s, mining was king" for a look at historic mining towns.




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