Gold Mine Rejected Outside Yellowstone Blow To Mining Firm Reportedly Softened By Rare Swap Of Assets
A Clinton administration deal that would block a gold mine just outside Yellowstone National Park marks a setback to mining companies using a disputed 1872 law to stake claims in environmentally sensitive areas.
But the tentative agreement, forged this week and expected to be announced Monday, has its rewards for industry, offering to swap potential gold for other assets.
People close to the talks stressed Friday that details remained to be worked out. Still, the deal was seen as a potential boon to the owner of a mine that some gave little chance of surviving against the irate defenders of America’s oldest national park.
The pact would compensate the owner of the New World Mine with land or other federal assets in exchange for abandoning plans to dig for gold within a couple of miles of Yellowstone’s northeast corner.
It would be the first such U.S. mining swap in recent memory. Environmentalists, who have been fighting the mine for years, hailed it as an important victory.
Opponents feared that a 70-acre reservoir behind an earthen dam - designed to permanently hold an estimated 5.5 million tons of toxic wastes and tailings from the mining process - could pollute the water supply of the park, kill fish and injure other wildlife. The site is known for frequent earthquakes and severe weather.
So far, Crown Butte, which owns the mine, has invested about $37 million in exploration, permitting and engineering work at the site near Cooke City, Mont. Its project has been held up for six years as the owners awaited an OK from state and federal government agencies assessing the environmental impact.
Compensation for scrapping the mine, though, could exceed that investment. Industry observers speculated that Battle Mountain Gold Co., which bought control of the gold mine’s owner in March, may have seen the deal as an easy way to shed a property that could have hurt its image.
A spokesman at the Houston-based company declined to comment. Joe Bayliss, president of Crown Butte, did not return a call seeking comment.
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