Mining A New Image Industry Recognizes Need To Be Good Corporate Citizen

A shareholder cornered Homestake Mining CEO Jack Thompson after a recent annual meeting.

The slide show on Homestake’s $1 million effort to clean up abandoned placer mining sites in South Dakota puzzled him.

“Why spend money on things we don’t have to do?” the shareholder asked Thompson.

“It’s good business,” the chairman of the United State’s fourth largest gold company replied.

The mining industry has changed dramatically over the past 100 years, Thompson said.

Mining was once a dirty, dangerous job that left a legacy of polluted rivers and ravaged landscape. The industry operates on a much larger scale today - with significantly less impact, Thompson said.

But that’s not enough, he told delegates at the Northwest Mining Association’s annual meeting.

The public expects ever-increasing environmental protection in return for granting new mining permits, he said.

“I do worry about mining’s future, because it will be a bleak one unless this industry and this generation continue to improve, Thompson said.

Environmental issues dominated discussion at NWMA’s 104th annual meeting, which wrapped up Friday at the Spokane Convention Center.

Montana voters’ decision to ban cyanide in new open-pit gold mines is an indication of how ill-informed the general public is about the industry, officials said.

“Modern mining makes our standard of living possible,” said Laura Skaer, NWMA’s executive director, noting that an average home contains more than 400 pounds of copper in wiring, pipes and appliances.

But most Americans are far removed from resource production.

“The public has almost forgotten the role that mining plays in civilization,” said Otto Schumacher, president of Western Mine Engineering, a Spokane consulting firm. “They write us off as polluters and destroyers.”

The industry can and must step up to the mark, Thompson said.

In 1879, naturalist John Muir visited the Eureka Mining District in Nevada. He praised the professionalism of the mining and smelting operations.

“The prospector is no longer the raving, wandering ghoul of 10 years ago, rushing in random lawlessness among the hills …,” Muir wrote.

The operation he toured was owned by George Hurst, the founder of the Homestake Mining company, Thompson said.

This year, Homestake opened a new $60 million heap-leach gold mine in Eureka. The company worked extensively with the community and won praise from the Bureau of Land Management for innovative design and environmental protection, Thompson said.

“We’ll have made progress if we can get this generation’s John Muir to say that we are not ‘raving ghouls, rushing about in lawlessness,”’ Thompson said.

In other highlights:

Some 2,900 people attended the annual meeting, about 200 less than last year. Low metals prices were probably a factor, organizers said.

Analysts said they see no quick recovery in gold prices, which fell to 19-year lows this year. Silver prices could turn around as early as next year, analysts said.

Fallout from the Bre-X Minerals scandal continues to haunt junior mining companies searching for financing, officials said.

“It’s made people very leery of this whole sector,” said Borden Putnam III, a geologist who works for a San Francisco investment management firm.

Prices for Calgary-based Bre-X Minerals’ shares topped $200 before its Indonesian gold strike was revealed as a scam.

Mutual funds and pension funds, which traditionally kept a small portion of their portfolios in precious metals, pulled out. They turned instead to Internet and high-tech stocks to provide a high-risk, high-yield investments, Putman said.

The scam hurt companies like Vengold of Vancouver, British Columbia, which is looking for financing to increase its interest in a New Guinea mine.

“For a half dozen guys to do that much damage to an industry is probably unprecedented,” said Brian Kirwin, a vice president at Vengold.