All present as mining’s future is recast

By Lisa Mascaro

Saturday, Sept. 1, 2007 | 10 p.m.

Elko

The gold rush that raced west more than a century ago continues in this Northern Nevada town. More gold is mined per square mile in Nevada than anywhere else in the world, much of it not far from here.

So when congressional Democrats asked where they should go to discuss revising the federal mining law -- a statute that has gone largely unchanged since 1872 -- Sen. Harry Reid of Nevada sent them here.

It was a dicey move. The last time congressional mining reform hearings came to Northern Nevada was the early 1990s. One crowd shouted and jeered for hours. The reforms mostly failed, and Reid secured his standing as the industry's main supporter.

The new reform attempt calls for many of the same changes, including royalties and restrictions on using public lands, where much of the mining occurs.

Supporters say those are long overdue for an industry that generates more toxic waste than any other in the nation. Opponents warn of hurting the industry that sustains much of rural Nevada.

To assess it all, the Sun came here to talk with people on all sides of the debate, including a stranger who quietly slipped into town just to listen -- the chief executive of Tiffany & Co.

Our report, in four scenes:

• • •

Mike Mosley has an Old English script tattoo of his daughter's name running up one arm and his son's up the other. His wife, Michelle, has shoulder tattoos of the babies' footprints. Family is everything to them. So is mining.

Mosley is a miner by default. He had been painting highway stripes for the state Transportation Department, but the pay wasn't covering the family's bills, including hospital debt dating to daughter Josalynne's birth five years ago. Mosley had no insurance.

The family had gone through stretches where they lived on nothing but eggs and cheese, waiting for the next paycheck. They stayed for a time in a trailer on her parents' property outside of town. Mike couldn't stand it -- he needed to live in the city.

Michelle put in his application online to get the mining job. Nothing unusual about that. They have been together since he saw the sassy 16-year-old behind the wheel of her 1965 Mustang in downtown Elko almost nine years ago.

The application led to the job. Mosley knew the work would be rough, especially the nights and holiday shifts away from home. The mines never close.

But the Mosleys think Newmont Mining gave the family a future they wouldn't have had living in a part of the state where people are scarce and jobs are scarcer.

He is making $55,000 a year now, more than half again as much as the state paid. When he brought home his first paycheck, they thought there must have been a mistake. Some kind of mixup. They had never seen that kind of money before.

Coming up on his first anniversary at Newmont, Mike says he plans to stay at the mines at least 20 more years. He'll be pushing 50 then.

The son of a railroad man, he's never had such security. Soon enough he hopes to have enough saved in his 401(k) to put a down payment on their first house.

“It's the greatest feeling,” he said. “My kids' life -- I could give them stuff I never had growing up. I don't have to worry about the next meal or where am I going to live or anything like that. I feel like I've accomplished something in my life. I go to work for them. It's for them. I don't want anything. All I want is just a smile on their faces.”

The couple listen as they learn that the legislation pending in Washington would require companies to start paying royalties on the minerals they extract from public lands, much the way oil and gas companies do. The bill also would limit where companies can mine, eliminating millions of acres in Nevada, and it would end the policy giving mining priority over recreation and conservation on public lands.

Michelle asks who would pay her bills if her husband's job went away.

She thought about attending the hearing in Elko where Reid spoke. She grew up in politics, her dad is an Elko County commissioner, and she had a thing or two to say about the mines.

“If East Coast people came to Nevada they would see they're not ruining anything, they're not polluting anything,” she said. “They're keeping little towns like this alive.”

Michelle was born here, rode horses on her grandfather's ranch as a kid and never left. Now 25, she says this is where she will die.

She sees the good the mines do not only for her bank account, but for the community: donations to the fireworks show, schools, parks.

Mining companies pay more than $40 million annually in state taxes, up to 5 percent on the net proceeds of the gold, silver and other metals they pull from public lands. Half of it is shared with the counties to pave roads or for other uses and the rest goes to the state's general fund.

Michelle has never once worried about mercury, even though the airborne toxin generated from mining makes Nevada the mercury capital of the West. If there was widespread pollution, she says, the companies would fix it.

Mining is “helping a lot of people pay their children's tuition, pay their bills,” she said. “It's a lifesaver.”

Washington's priorities are misplaced, she said. If the people who want to rewrite the mining law want to do something to help Elko, she says, “go after these people selling meth to little babies or homelessness or child abuse.”

“It's not Yellowstone out here,” she said. “It's not Niagara Falls. It's desert. Sagebrush. There's nothing endangered about the sagebrush.”

• • •

Dan Randolph looks out the windshield of his 1997 Toyota Corolla and sees beauty where others see nothing but endless desert. He's driving with one hand, talking with the other, as the Corolla is crossing over the center line on a back road off Interstate 80 in gold country.

The landscape goes on for eternity and looks like one of those backdrop paintings where you can dress up like a cowboy and have your picture taken. But many people see it as more endless and stark than national park beautiful. Saving this land is a tough sell. “It's not like the Grand Tetons,” he says.

Randolph moved to Reno a little over a year ago to run Nevada's mining watchdog organization, Great Basin Mine Watch. He is not sure he'll stay. The “biggest little city in the world” is too busy for him.

We drive by a pile of rocks about as big as a baseball stadium and watch sprinklers spray the dirt. Mining operations spray cyanide solutions to leach gold from rock. When that method was first used in the 1960s on Nevada's Carlin Trend, one of the world's largest gold deposits, where Mike Mosley and others from town work, it revolutionized the industry.

Other advances helped Nevada's gold production skyrocket sixfold during the 1980s, making Nevada the world's No. 3 producer. (Last year, it was surpassed by booms in China and Peru.) With gold at record high prices, the boom has been phenomenal.

The Corolla can make it no farther on what's left of the dirt trail and Randolph stops the car in the brush. We hike a hill and stare out at a pit operation that spreads across the landscape like a new Las Vegas housing development, graded and ready for construction.

These are massive enterprises run mostly by global corporations. Maps show a single mine could cover a good portion of San Francisco. The companies have vast pollution control systems capturing the cyanide, monitoring the ground water and scrubbing mercury emissions from the smokestacks. They also are required to clean up the mines when they close.

Still, 40 percent of the waterways in the West have been contaminated by mining and 500,000 abandoned mines dot the country.

The new legislation seeks to require mining companies to renew their operational permits every 10 years. It also would disallow cleanup operations that can now stretch into perpetuity.

Randolph says mining is not like a factory. You can't just turn off the switch and walk away. Once rocks pulled from the ground are exposed to air and water, chemistry takes over. Rain can release metals in potentially toxic concentrations. It's suspected that the cause of high levels of mercury in fish caught in Idaho is mercury blown over from mines in Nevada.

People in Elko scoff at the urban environmentalists who sit in their coastal offices and write legislation with no clue about what it's like living in the West.

That's not Randolph. He smokes. Eats steak. Worked for a time as a logger. He tells a story about yanking up sagebrush to jack his car out of a dry riverbed as if he was talking about pumping gas. Just something you do when the car won't go. Unlike ranting environmentalists of a decade ago, Randolph does not want to ban mining in Nevada.

At 47, he approaches his job with realism. Great Basin Mine Watch has successfully helped stop only one mine in Nevada since it was founded 12 years ago. If the new bill passes, he estimates, 70 percent of the new mine proposals will still go forward.

He just wants the mines carefully sited and monitored. He hopes to return to Elko this winter to talk further with the residents. He thinks if they were to meet him they would see his goals are not much different from their own.

Randolph has never met Reid, but he thinks (as do others) that the senator set a tone at the hearing that the “time to sit down and discuss this is now.”

That night after the meeting was over, he had a steak at one of Elko's famous Basque restaurants. “If we pass something that really kills the industry in Nevada, that would be a mistake.”

• • •

The breakfast bar at the Holiday Inn Express in downtown Elko is closed for the night. A couple of guys are tapping away at the lobby computer. In walks the chief executive of Tiffany & Co.

It's disorienting. Michael J. Kowalski, the chairman and chief executive of the one of the world's most prestigious jewelers, is about as far removed from the company's culture and fabled Fifth Avenue address as a human can be.

Outside is Kowalski's rental car. He flew on a commercial jet to Salt Lake City and drove over because he wanted to see the land.

Kowalski has become a leading voice for revamping the 1872 Mining Law. Some may see him as a New York greenie but his statements and the articles he has written for newspapers show that at his core, he is a businessman whose stake in the issue “has never been ulterior or anything more than corporate self-interest.”

The jewelry industry was blindsided by blood diamond campaigns a decade ago, and it shouldn't have been, he said in an interview. No one wants the money he spends on a 1-carat diamond going to African rebels who chop off children's hands.

The company worked quickly to support an international process that now certifies that diamonds going to Tiffany and other jewelers do not come from regions financing rebel conflict.

For Kowalski, it is no stretch to foresee that gold or silver could be next. No one wants gold from a polluting mine.

A pair of organizations launched the No Dirty Gold campaign before Valentine's Day in 2004. Tiffany & Co. signed on first. Since then, Earthworks, a national mining-watchdog group, and Oxfam America, an anti-poverty organization, have persuaded 25 other retailers to join, including Wal-Mart. Together they represent 22 percent of the U.S. market. All have pledged to support mines that are not in environmentally sensitive areas and that do not release toxins in perpetuity.

The No Dirty Gold campaign is targeting the rest of the industry as laggards.

The night before the hearing, Kowalski explained that his customers have an expectation that the company would not be part of an industry that pollutes the air or water. Focus groups tell him shoppers would worry about activities that damage the environment. When survey participants are shown fake ads for anti-mining campaigns, they are not pleased.

“It goes back to Holly Golightly's comment in ‘Breakfast at Tiffany's': ‘Nothing bad will ever happen here,'” Kowalski said.

A few years ago, Tiffany set out to buy its gold and silver from a single source. It proved more difficult than the company thought. The company wanted a place it could point to when answering queries about the origin of Tiffany products. But most mines ship the metals they pull out of the ground to reprocessing centers where they get mingled with metals from other suppliers. The chain of ownership is blurred.

The company eventually started buying most of its gold and silver from the 100-year-old Bingham Canyon mine in Utah. From there, it can ship the metal to Tiffany fabrication plants.

The mine was chosen because it could potentially deflect criticism better than others: It's an old mine, uses no cyanide and produces the precious metals Tiffany buys as a byproduct of its main operation, which is mining copper. (It's also so large it can be seen from outer space).

Now Tiffany and others want to establish a third-party certification similar to that which exists for diamonds. Last year a consortium that includes Great Basin Mine Watch began working to establish a system to independently verify mining companies' compliance with social and environmental standards. Along with outdoorsmen who are speaking out for a new mining law to ensure wilderness protections, jewelers are new players in this year's mining debate.

Kowalski thinks consumer pressure will make these changes happen. Companies will have no choice but to respond.

“A diamond engagement ring is the most significant jewelry purchase of a lifetime,” said Kowalski, who wears no bling himself and barely goes noticed at the Holiday Inn Express. “For us, it's important we don't introduce any dissonance into that celebratory moment.”

• • •

The line for the Aug. 21 public hearing on mining reform formed outside Elko's Western Folklife Center just as Mosley was coming off the night shift.

Washington staff and lawmakers had been preparing for weeks, but after four nights of driving trucks in and out of the pit, Mosley wasn't about to spend his day off at a hearing. He was going home to his kids.

The gym-size hearing room was filled with workers, local politicians and mining executives from companies big and small.

Randolph was a little nervous. He had heard stories about the last mining hearings and was bracing for a grilling at the witness table.

Kowalski, in slacks and a blazer, settled into the front row amid the cowboy boots and plaid shirts.

Reid walked to the front table. Son of a miner, protector of Nevada's No. 2 industry, the senator's environmental legacy will forever be tied to his commitment to these companies and communities that embrace him, a Democrat among Republicans, or maybe just a Nevada Democrat.

Reid has made it clear that the bill his fellow Democrats propose is not acceptable. But the lawmaker who will have arguably the greatest hand in deciding whether to make or break the reform told the crowd of 200 that the time had come for a “sturdy compromise.”

He spoke for 20 minutes and other than a few outbursts at his jokes, the room was silent.

Reid said his hometown of Searchlight, once an active mining town, now has mainly abandoned mines, an example of industry mobility and consolidation. For all those who think mining law change would harm the industry, he proposed another view: Congressional inaction has left companies at the whims of each new White House to set policy.

“Rather than crossing our fingers every four years and hoping that the newly elected president understands the West and mining, let's work together,” he said.

Reid meant that all sides have a window of opportunity, now, with a Democratic Congress and Republican president. After the 2008 elections, the political landscape may change and more draconian changes could be proposed.

Also, Reid won't be around forever to cut a deal.

As Reid spoke, he seemed to do what politicians often try unsuccessfully to accomplish: He pleased all sides. Mining would be protected, but environmentalists would get their turn, too.

Could this be the era that the 1872 Mining Law is redone?

The West is changing in deep and substantial ways. This region was the birthplace of the Shovel Brigade and, before that, the Sagebrush Rebellion, late-20th century federalist movements in the West to battle Washington's attempts to restrict public lands.

But as this tiny town has grown into the 21st century with lattes and WiFi downtown, the debate has changed.

The mining industry is tired of defending the 135-year-old law. Companies are willing to pay royalties in exchange for the certainty that could come from ending the debate.

Environmentalists, too, have shifted. They acknowledge most mines would still get built despite any reform, but they want to strike a deal.

There is growing interest in protecting the wide-open space not only for industry and jobs that have historically fueled this country's expansion, but for the mountains, streams and vistas that capture hearts.

Rewriting the 1872 Mining Law is a test case for this new ethos. Have environmentalists truly come to believe that mining has a place alongside backpackers and naturalists on public lands? Has the industry really accepted that limits will be placed on its free-wheeling reign over open space?

Is this the time when the mining law that was crafted by U.S. Sen. William Stewart of Nevada in the 19th century will be rewritten by the Senate majority leader from Nevada in the 21st?

“I think that if people work together on compromise and consensus building,” Reid said in an interview that day, “I can be looked at as one who contributed to changing the 1872 Mining Law. I'd like to be able to do that.”

Lisa Mascaro can be reached at (202) 662-7436 or at [email protected].