Golden Gamble in Grass Valley, Part 5: A Legacy of Risk

Aug 16, 2005 – At the Idaho-Maryland Mine, up to four tons of ore would have to be processed to produce one ounce of gold. But the steps taken to scrape together that ounce pose what scientists call two of the mining industry’s biggest environmental risks: cyanide contamination and acid mine drainage.

Emgold Mining Corp. faces both such risks with its plans to reopen the underground mine in Grass Valley, Calif. Outlooks vary widely on the degree of risk, which hinges largely on how Emgold would ultimately choose to handle its mine waste. Emgold has said it wants to reuse its tailings to make ceramic products, but a city-hired consultant has questioned the viability of that idea.

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Bill Witte, president of the Canadian junior mining company, said cyanide handlers in general have a strong safety record and that his company would use the latest technology and procedures to keep the poisonous chemical under control. Cyanide is used in mining to chemically extract the last remnants of gold, and Witte said it breaks down quickly naturally.

But scientists who consult on mining projects say there are no fool-proof protections against cyanide leaks or spills, even when modern mining techniques are used, and point to catastrophic mining accidents worldwide that have polluted waterways and destroyed habitat.

“It implies to the general public that nothing ever escapes, and I’ve never seen a site where that’s true,” said Robert Moran, a Golden, Colo.-based geochemist and hydrogeologist who consults governments, industrial clients and public-interest groups on mining projects worldwide.

In 2001, the mining industry made up 45 percent of all chemical releases in the United States – the largest of any industry that year – with 2.8 billion pounds of toxic pollutants released, according to the U.S. Environmental Protection Agency’s Toxics Release Inventory. In 2000, the EPA identified 40% of the headwaters of western watersheds as having sections polluted by mining.

One teaspoon of a 2 percent cyanide solution can kill a person, but only a microscopic amount of cyanide in water is lethal to fish, birds, and other wildlife. And, although chemically it can break down, it can also take on altered forms capable of wreaking havoc on plant and animal life, said Moran, author of “De-Coding Cyanide: An Assessment of Gaps in Cyanide Regulation at Mines.”

Acid mine drainage poses even bigger threats, Moran and others say. Acid can form in a mine when air and water come in contact with sulfide-bearing rock – either underground, from where water must be continually pumped to allow miners access, or above ground, where mining operations often stockpile tailings (pulverized rock largely depleted of gold) and waste rock (which is removed from underground to gain access to the gold-bearing ore). Acid can dissolve toxic metals, which can then seep into the groundwater and waterways.

“One of the main problems is ecological,” said Ann Maest, a geochemist in Boulder, Colo., who consults federal and state agencies and environmental groups on water-quality issues related to hardrock mining. “If the mine is located near a surface water or groundwater, and this acid gets into streams, especially smaller streams, it can overwhelm the neutralization capacity of the stream water and make the stream water go acid.”

Such a scenario troubles the likes of Ralph Silberstein, a member of the Wolf Creek Community Alliance. The Idaho-Maryland Mine straddles South Fork Wolf Creek, which flows into Wolf Creek, which runs through nearby downtown Grass Valley. Wolf Creek connects with Bear River, which leads into the Sacramento River, which empties into San Francisco Bay. Emgold plans to dewater the mine to depths greater than 3,000 feet to gain access to the mine, and that water will be pumped into South Fork Wolf Creek.

“Right here in our own town, the Empire Mine has an area of the mine that is cordoned off because of residues from cyanide processing,” Silberstein said. “If you look at the history of mines, they have a reputation for making promises. They have all these Superfund sites, and polluted sites are their legacy. Right up the road we have a mine, the Lava Cap Mine, that’s a Superfund site.”

In response to environmental concerns, Witte said any ore that Emgold mines and processes would be rendered environmentally benign, largely stripped of the sulfides that could otherwise form into harmful acid. He also said the ore has naturally low sulfide levels.

“We don’t have enough of the sulfides, so it’s not a concern,” Witte said from his office in Vancouver, B.C. “It’s such a small concentration.”

Emgold’s mining plans coincide with the alliance’s hopes of restoring Wolf Creek and making it a natural waterway.

Rick Sanger, the alliance’s president, pondered whether the creek and the mine project could co-exist. “I guess I think it’s safe to say that the alliance is completely concerned about that exact question, and our initial feelings are of skepticism,” he said.

At the Idaho-Maryland Mine, Emgold has considered a few options for dealing with the tailings and waste rock. Its first choice has always been to turn tailings into ceramic products such as floor and roof tiles using a patented technology that hasn’t been tried on a commercial scale. “We think that’s the environmentally responsible thing to do,” Witte said.

However, a July 2005 business viability study by a city-hired consultant raised concerns about Emgold’s ceramics plans, and Witte later said that Emgold is devising a backup plan for handling the tailings if the patented technology doesn’t work.

Emgold, which has never taken a mine into production, hopes to open the Idaho-Maryland in 2007 and mine it for at least 20 years. The mine has 138 acres of surface rights and underground has 2,800 acres of mineral rights. Access to the mine’s 70 miles of tunnels would be gained by pumping out millions of gallons of water that will be drained into South Fork Wolf Creek. The project, which would be the only medium- to large-scale mining project in California and the state’s only operating mine within a city’s border, still requires local, state and federal approval.

The Idaho-Maryland Mine closed in 1956 but to this day remains California’s No. 2 underground gold producer. Before closing, it produced about .43 ounces of gold per ton of ore. Witte said the ore that remains holds .25 to .33 ounces per ton. In the 1990s, Emgold, then called Emperor Gold Corp., sought to reopen the mine but abandoned those plans after the price of gold dropped below $300 an ounce — compared to the current price of about $420.

Gold remains a volatile market commodity, but Emgold says that setting up a ceramics plant alongside the mine would overcome gold market fluctuations. The ceramics plant is supposed to supply half of the mine’s projected 400 jobs and employ a technology that Emgold claims will use less energy than conventional tile-making processes.

But the ceramics business hinges largely on an untested technology, called Ceramext and patented by mine project director Ross Guenther, which has not been used commercially. The recent business viability report, written by Bay Area Economics (BAE) in Berkeley, Calif., raised questions about the ceramics end of the project, saying more information is needed to know if Emgold can market the tiles and whether the company can consistently produce tiles on a large scale. The report specifically said a lot is unknown about the marketability of the tiles and the suitability of mine waste for making ceramic products. In fact, no mine in the U.S. or Canada turns its tailings into ceramic tiles or bricks.

“Given the scale of the ceramic tile operation that is proposed, the Ceramext process should be considered an unproven technology until it is successfully put into commercial scale production. As such, BAE recommends that the City of Grass Valley request that Emgold produce a contingency plan for the disposal of mine tailings in the event that the Ceramext process does not prove viable as a means of disposing of mine waste,” the report says.

Guenther, in an earlier interview, insisted the mine would have no leftover waste – “We’re using the whole buffalo, so to speak,” he said – and remain profitable even when gold prices slump. Without a ceramics plant alongside the mine, Guenther said, “It would certainly be a much more marginal project. … It would not be as profitable.” Efforts to reach him for this story have been unsuccessful.

As a stand-alone project, the gold mine each day would process several hundred tons of tailings, which would undergo cyanidation. Many mines – whether an underground operation or an open pit operation – impound tailings in ponds. The ponds have liners, but liners almost always fail, causing leaks, scientists interviewed for this story say.

Emgold has said Ceramext will prevent the need for impounding tailings in ponds. But if Ceramext doesn’t succeed, Witte said, the mine might have to consider stockpiling materials on the surface for one to two years. During that time, Witte said, the mine could sell some of the waste as aggregate for road projects. “Our intent is to have no long-term storage of any waste materials on the surface,” he said.

Emgold has been pondering a backup plan for Ceramext, Witte said, which comes as a surprise to at least one city official. Plan B would involve the company using “conventional” processes to make ceramics products, Witte said. Before, Emgold had touted Ceramext as 30 to 40 percent more energy-efficient than conventional processes. Ceramext was already estimated to require 2.1 billion cubic feet of natural gas a year – enough to supply 25,000 to 50,000 households for a year.

“We can produce ceramic materials with slightly higher costs but still make money,” Witte said.

Witte also said Emgold has a backup plan to avoid the stockpiling of mine waste. One option involves trucking the Idaho-Maryland’s gold-bearing ore to a toll mill – the nearest mills are in Nevada – and paying the mill to extract the gold and handle the tailings. Witte said this could be done initially to build capital, which he said would allow the mine to buy its own mill equipment.

Grass Valley Mayor Gerard Tassone, already concerned about the project’s proposed energy consumption, said he hadn’t heard Emgold was considering conventional ceramics production methods as an alternative to Ceramext. “I don’t think we have an unlimited supply of resources,” he said. “Does it really make a business viable if they’re using so much energy to make a product? Can they really sell a product at a profit?”

The July report by BAE – which underscored that it performed the review with limited information, scope and resources – did not focus on environmental aspects of the project such as energy consumption and potential impacts on water supplies. These are expected to be addressed in an upcoming Master Environmental Assessment. The city has put out a request for proposals for a consultant to handle the assessment process.

“Now we’re going to look at environmental studies and that will bring up any discrepancies that might stand out,” the mayor said.

Emgold says it would use 2,400 tons of tailings a day as feedstock for its Ceramext process. Witte said most of the ore would be crushed underground before it’s trucked to the surface for further processing. On the surface, a machine that uses centrifugal force to separate gold from ore would recover most of the gold, Witte said.

But about 15 percent of the ore, according to the company’s application to the city, would undergo an “intensive cyanidation process” to extract gold. Witte said Emgold could have relied solely on a non-toxic gravity process to recover gold, “but we decided it would be more cost-effective to try and recover as much gold as possible.”

According to a 2004 report published by EARTHWORKS, a non-profit organization that watchdogs the worldwide mining industry, more than 90% of the 2500 tons of gold produced annually around the world is extracted through the use of cyanide leaching techniques, making cyanide the chemical of choice in the gold mining industry.

Sodium cyanide dissolves gold into a chemical solution from which the gold is later recovered. Cyanide can be reused, although the cyanidation process requires continually adding more cyanide. Witte said the mine would use 300 to 500 pounds of cyanide a day.

In the foreword to Moran’s 1998 paper, “Cyanide Uncertainties: Observations on the Chemistry, Toxicity and Analysis of Cyanide in Mining-Related Waters,” Stephen D’Esposito of EARTHWORKS wrote that the mining industry’s use of cyanide makes it possible to “mine low-grade ore bodies for microscopic flecks of gold … and still turn a profit.”

But, he goes on, “The mining industry and regulators claim that cyanide rapidly breaks down into harmless compounds, but this is only part of the cyanide story. The rest of the story is that cyanide also breaks down into compounds that are potentially toxic to fish and other aquatic organisms. Many of these compounds are generally less toxic than the original cyanide, but may persist for long periods of time. And there is evidence that some of these compounds are stored, or bioaccumulate, in plant and fish tissue.”

Moran’s paper points to a series of recent cyanide accidents in the West, including at the Summitville gold mine in Colorado, which was abandoned and became a federal Superfund site after a cyanide spill contaminated 17 miles of the Alamosa River; the Zortman-Landusky gold mine in Montana, which closed after “repeated leaks and discharges of cyanide solution” killed wildlife and contaminated streams and groundwater; the Gold Quarry mine in Nevada, which leaked 245,000 gallons of cyanide-laden waste into two creeks; and the McCoy/Cove gold mine in Nevada, where nearly 900 pounds of cyanide were released.

Frequently the signs of cyanide contamination are obvious, Moran said. “Often they’ll just have a lot of dead fish. The most obvious thing is dead fish floating around belly-up.” At some mines, Moran said, workers will spray cyanide on the ground, in an attempt to spare the water and fish, and end up killing plants.

In 1998, voters in Montana banned the use of cyanide in open-pit mines (the Idaho-Maryland is an underground mine). Jim Jensen, a former Montana lawmaker who authored Initiative 137, which passed with 52 percent of the vote and has withstood court appeals, said the ballot measure was a result of extensive environmental damage from mining. Open pit mines have simply caused more problems in the Big Sky state than underground mines, he said.

“It is possible to do underground mining in a more responsible manner. I don’t think it is often done, but it is possible,” said Jensen, executive director of the Montana Environmental Information Center. “The mining industry always considers itself to represent the highest and best use wherever and whenever it wants to mine, and that kind of thinking is what results in conflicts. … As a practical matter, gold is not a mineral upon which the human species is dependent upon for its survival. It is a luxury.”

Jim Kuipers, a Butte, Mont.-based consultant for governments and public-interest groups who used to work as an engineer in the mining industry, said cyanide use wasn’t the primary target of I-137, but rather acid mine drainage and other problems. “It was a way of getting at all the issues with large-scale gold mines,” he said.

Mining experts and scientists generally refer to two kinds of gold-leaching processes that use cyanide. Heap leaching involves spraying cyanide on piles (heaps) of ore out in the open air and seeking to capture any runoff with a liner. Vat leaching involves mixing cyanide with the ore in a large container. I-137 bans heap and vat leaching at open-pit mines.

The Idaho-Maryland will not use vat or heap leaching, Witte said, but “closed-circuit” cyanidation using a tank about 6 to 8 feet high and 3 to 4 feet in diameter. Vats, he said, are typically much larger. “We’re not using vat leaching. It depends on what you mean by vat leaching,” he said, later adding, “We’re not using either one of those techniques.”

In an earlier interview, Guenther, the Idaho-Maryland’s project director, used the term vat leaching to describe Emgold’s proposed cyanidation process. “We’ll take out some in vat leaching,” Guenther said, describing how some sulfides will be removed during the cyanidation process.

Kuipers said closed-circuit cyanidation is “not a special or new technology” for removing gold from ore. “People can call it whatever they want,” he said. “Whether they call it closed-circuit or anything else, it’s still just a cyanide leach system.”

“In their reality, nothing ever leaks,” Moran said of the mining industry. The term closed-circuit “implies to the general reader that nothing ever escapes and I’ve never seen a site where that’s true.”

At the Idaho-Maryland, the cyanide itself would be shipped to the mine as a powder in sacks, each weighing 1 to 2 tons, according to Emgold’s mining application. Workers who handle the cyanide would be equipped with respirators, goggles and gloves, the company says.

Witte said the mine will gather most of the gold, 80 to 85 percent, using a centrifugal separator. Of the hundreds of tons of ore pulled from underground each day, about 1,000 pounds of “concentrate” would undergo intensive cyanidation, he said.

Gold and other metals in the concentrate would be dissolved by the cyanide, creating a solution that would be put through an electrowinning circuit from which the gold would be recovered and placed onto stainless steel sheets. The gold would be scraped off the sheets, put into an electric furnace and melted into 50- to 60-pound gold doré bricks that Witte said will contain 92 to 93 percent gold. The bricks would later be trucked to a refinery.

Meanwhile, the cyanide would be pumped back into the cyanidation reactor. “It is a closed loop, and it is completely enclosed and encased,” Witte said. The company would use sulfuric acid to destroy most of the cyanide before the tailings are hauled to the ceramics plant. “There may be some trace amounts of cyanide in the tailings …,” Emgold’s application says.

Other hazardous materials Emgold says it would use include sodium hydroxide and dilute hydrochloric acid for pH control and lead nitrate to enhance gold leaching.

When it comes to acid mine drainage, Witte said the Idaho-Maryland has low acid-producing potential because the ore is .5 to 2 percent sulfide. Also, he said, the ore has a significant amount of calcium carbonate, which naturally neutralizes acid.

Moran said the ore’s sulfide content matters, but more importantly is how the total ore content reacts chemically over a long period of time; given enough time, even low-sulfide ore can produce acid. He pointed to the Zortman-Landusky in Montana, which he said had sulfide content as low as .2 to .3 percent sulfide and is now a federal Superfund cleanup site.

“Gradually it became acid and developed several acid-related problems. Finally they were forced to have a bond, and the final bond was not adequate to pay for the cleanup, and the taxpayers wound up paying for the cleanup,” Moran said.

Over time, Maest said, a mine’s acid potential can outlast its carbonates and other neutralizing minerals. “When you excavate the rock, in most cases, you’re breaking it into small pieces and exposing it to oxygen and water. There’s kind of a clock that starts ticking. The severity of acid mine drainage depends on how much sulfides are there and what types of sulfides are there, and how broken up the rock is and how exposed the rock is in there,” she said.

“Generally,” Maest said, “carbonate dissolves at a faster rate, so you have to take time into account. If you have a lot of carbonate around, it could neutralize the acid for a certain amount of time. Acid-based accounting tests often don’t take this into account. They don’t tell you how quickly each of these minerals will weather over time.”

Acid can suffocate fish and macroinvertebrates, and the metals that drain into waterways hinder the breathing of fish by causing the formation of mucous around their gills, Maest said. “Acid mine drainage can coat the bottom of sides of stream beds. It’s red or ocher-colored with iron precipitates. This takes away habitat for aquatic bugs. It’s also an aesthetic problem. People don’t like to look at it.”

Removing ore and waste rock from an underground mine can destabilize the ground, creating the risk of subsidence and sinkholes for property owners who live or do business above mines. Witte said Emgold plans to avoid that possibility by backfilling the mine with waste rock and cement to stabilize the ground.

But whether this form of underground patchwork helps to cover exposed, potentially sulfide-bearing rock and keep it from turning acid hasn’t been fully studied, Maest said. “(Backfilling) has been done, but there haven’t been enough studies to determine if it’s an effective mitigation technique,” she said.

It’s among the many questions expected to be raised as the Idaho-Maryland project undergoes further scrutiny. Repeatedly, on just about every environmental aspect covering the Idaho-Maryland project, Emgold officials say they have the know-how, latest technology and even innovation to keep the mine lucrative while safe for people and nature. But residents with concerns about modern mining note that pollution problems from long-shuttered operations still haven’t been solved.

Just six miles to the east, tucked higher into the Sierra Nevada foothills, is the Lava Cap Mine. In 1997, many years after the mine had already closed, the federal government classified it a federal Superfund site because arsenic and other heavy metals contaminated the water and ground after a log dam collapsed during a storm. Cleanup costs are expected to exceed the value of all the gold and silver ever mined there.

Even closer to the Idaho-Maryland, practically next door, sits the Empire Mine, which closed in 1956 but remains the state’s top underground gold producer. Now a state historic park, thousands of people — tourists, hikers and mountain bikers — visit each year for its museum and trails.

In the middle of it all are 17 acres marked with signs that warn the public to keep out. The area once contained the mine’s cyanide plant and a tailings pile. Now the park is in the process of conducting a “characterization study” to learn what risks the area poses. In the early 1990s, the state had removed 46,000 tons of mine tailings, but the area will soon receive a closer look.

“We’re still in the process of characterizing the site in terms of protecting human health,” said Ron Munson, a California State Parks sector superintendent. Two areas of concern involve the residual metals that get moved by rain or storm water, and the potential inhalation of mining-related particles.

Once complete, the study will help the state decide a course of action — be it capping the soil, planting new vegetation, installing a water-treatment system; nothing has been decided — that would require additional grant money.

“Let’s face it,” Munson said, “we have 106 years of mining that’s left its mark on the face of the earth, and much of that’s open to public use.”

He said park officials hope to implement a solution by next year, the 50th anniversary of the Empire Mine’s closure, or 2007, when Emgold hopes to reopen the Idaho-Maryland.