Nevada focus: Views of new law vary as much as gold differs from sand

Scott Sonner

Saturday, Jan. 22, 2000 | 9:43 a.m.

RENO, Nev. - Nevada is one of the biggest gold producers in the world. And it's nickname is the Silver State.

So what better place to go to get the definitive answer about the impact of new environmental restrictions on the mining industry? Well, not exactly.

Rep. Jim Gibbons, R-Nev., and Sen. Harry Reid, D-Nev., are offering such widely divergent views of the anticipated fallout from the mining regulations that one might question whether they're from the same planet, let alone the same state.

Gibbons says the mill site restrictions passed by Congress and signed into law by President Clinton have the potential to devastate Nevada's economy.

He said he's received assurances from the Republican leadership that one of the first matters taken up in Congress this year will be a proposal to reverse the measure regulating mine waste sites.

"It is going to have a dramatic effect on the economy of Nevada. It is going to have an effect on whether or not mining is a viable industry in this state in the future," Gibbons said.

Reid, the Senate minority whip, says the final compromise he helped broker last year isn't nearly as bad as Gibbons makes it out to be.

"I think we're going to be fine," Reid said.

The new restrictions, inserted in an appropriation bill, stem from a rules interpretation in an opinion written by John Leshy, the Interior Department's solicitor general.

In a case denying a permit to a mine in Washington state, Leshy quoted parts of the Mining Law of 1872 that limit mining operations to one 20-acre millsite on public land per each mining patent.

Under the measure passed by Congress, all mines in operation before November 1997 are exempted from the limit, which never previously has been enforced.

Included in the exemption are all mines currently operating in Nevada, the third largest producer of gold in the world behind South Africa and Australia.

"I think he should be looking at the glass as half full instead of half empty," Reid said about Gibbon's assessment.

"I just don't think we need to give all the gloom and doom to this stuff. I have been assured by (Interior) Secretary Babbitt it will not affect ongoing operations," he said.

So who's right?

"I think they are both right," said Russell Fields, president of the Nevada Mining Association.

The legislative compromise was "a very important choice of words," he said. The exemption includes even those mines that weren't yet operating but had submitted patent applications prior to Nov. 7, 1997.

The problem, Fields said, is what comes next. Nevada currently has about 13,000 direct mining jobs, down from a peak of about 15,000 in mid-1997.

"From a point of looking toward the future, new exploration and new mines we don't even know about yet, the solicitor's opinion is a problem," Fields said.

"We and our friends - the Western congressmen and Western senators from mining states - are going to have to work very hard," he said.

Leshy said his opinion has been "pretty well misunderstood" and the impacts exaggerated.

"It doesn't say if you have millsite problems you can't mine. You just have to get permission to do it other ways," Leshy said.

One way is to secure a permit from the Bureau of Land Management to use the land. Another is to engage in a land exchange with the feds.

"If you add those all together, it could have zero impact," Leshy said.

Critics say his interpretation is a wide departure from the way the law has been enforced for more than a century.

"It is contrary to about 130 years worth of history of mining activity and mining practices," Gibbons said.

Backers say it merely reflects the way it should have been enforced all along.

Tom Myers, director of the Great Basin Mine Watch in Reno, said Congress was wrong to exempt existing mines from the mill-site restrictions.

"Most Nevada mines operating on public land violate the law as written and should have been prohibited," Myers said.

He said there should be a major overhaul of the law, written at a time most miners used picks and shovels.

"The authors of the law in 1872 never thought that microscopic gold, requiring the removal of hundreds of tons of rock and the creation of massive open pits and waste covering thousands of acres, as exists throughout Nevada, would ever be mined," Myers said.

Leshy said the industry's problem isn't so much with his interpretation as it is with the way in which the controversy could end up - forcing more mining companies to the table to discuss an overhaul of the overall law.

"Politics has a lot to do with it," Leshy said in a recent interview before a speech at the University of Nevada, Reno, home of one of the largest mining schools in the West.

"To be frank, I think there is a sort of 'gotcha' mentality out there. The industry for a long time has been saying the Mining Act is such a beautiful thing. This really shows there are problems with this law in terms for the industry, other users and taxpayers," he said.

"It calls into question the continuing viability of the mining law. So that is sort of a problem for the mining industry. But the mining law has withstood calls for reform for a very long time," he said.

Gibbons said he doesn't trust the Clinton administration.

"If I were convinced this administration was not anti-mining, then I might be more ready to see the glass as half full," Gibbons said.

"I see this as a move by this administration that is going forward full force in an effort to put mining off of public lands," he said.