Environmental deal on Buckhorn gold mine brings jobs

Environmental deal on Buckhorn gold mine brings jobs

*Environmental deal on Buckhorn gold mine brings jobs*http://seattle.bizjournals.com/seattle/stories/2008/12/29/focus3.html
by Greg Lamm, Staff Writer

After nearly 20 years of legal hurdles and hundreds of millions of dollars in investments, ore is finally flowing out of the Buckhorn Mountain gold mine in Okanogan County.

For the next seven or eight years, trucks will haul up to 1,000 tons of ore a day to a mineral processing center about 50 miles away in Ferry County. When the deposit is depleted from the underground mine atop a 5,600-foot mountain near the Canadian border, mine owner Kinross Gold Corp. expects to have produced 1 million ounces of gold. That’s worth about $850 million at today’s price.


In a sparsely populated region with few large employers, the launch of mining operations with a couple hundred jobs is a big deal to local businesses and the work force.

But it’s bittersweet for local residents led by activist David Kliegman, who formed the Okanogan Highlands Alliance in 1992, when the former Buckhorn Mountain mine owners were still pushing forward to establish an open-pit mine on the site in the Okanogan National Forest.

Kliegman’s group, along with the *Washington Environmental Council*and the Center for Environmental Law & Policy, struck an agreement in April with Kinross, the mine operator, allowing the underground mine to move forward. That was 20 years after Crown Resources Corp. first started seeking federal and state approval for a mine. Kinross bought Crown in 2006.

The environmental agreement removed the last legal challenge blocking the go-ahead from the state Department of Ecology. Kinross will set aside $150,000 a year while the mine is in production and then another $75,000 a year after mining stops. The money will allow Kliegman’s alliance to hire experts to review groundwater and surface water data to look for any pollution related to the mining.

Buckhorn Mine also includes a sophisticated water-treatment plant to clean up sulfuric acid and heavy metals that are released when the ore is extracted from the mountain.

Kliegman said he’s still rather not see a large-scale mine on the mountaintop, but he acknowledged that other people felt differently, especially because the mine is bringing jobs to an economically struggling area.

“If you have to have a mine in your back yard, it might as well be the best possible mine they can do,” Kliegman said. “I think that’s what we’ve gotten at this point.”

Toronto-based Kinross Gold Corp., one of the world’s largest mining companies, bought Crown Resources and the Buckhorn Mountain deposit in 2006 for more than $100 million.

Since then, Kinross has pumped another $100 million into building 8.5 miles of road, miles of buried power cable line, an administration building, showers, maintenance shop, fueling facility and power distribution facility. In addition to the treatment plant, the mine also has a plant to produce low-strength concrete, which is mixed with leftover rock and used to backfill mining tunnels after the ore is extracted.

Mining operations at Buckhorn Mountain started in October, and Lauren Roberts, a Kinross vice president, says the mine will “be a pretty heavy hitter” when it comes to boosting the local economy, including neighboring Ferry County, which has an unemployment rate hovering around 8 percent.

He said he’s already started to see signs of new business activity in the tiny town of Republic, where Buckhorn local headquarters and processing center are located, a few miles from the mine.

“It’s rewarding to us to see that,” Roberts said “We all live here and this is our community, too. It’s nice to see business coming back to life.”

The mine employs about 140 workers, and when it is up to full production in the third quarter of 2009, it should have a payroll of 180, said Roberts. In addition, Kinross has a contract with ACI Northwest, a trucking company in Coeur D’Alene, Idaho, that has created an additional 30 jobs. He said the operation’s annual payroll will be about $12 million.

It’s too early to know the impact Buckhorn will have on the local economy, but local business owners are excited that the mine is hiring, said Kari Beedle. Her family owns Anderson’s Groceries & Deli, in Republic, a business started by her great-grandfather more than a century ago.

Beedle thinks the mining operation has kept the area from feeling the full pinch of the economic slowdown.

“I think once they get up and running and have been running for a while, we might see some other small businesses open up,” Beedle said. “It’s just going to depend on how well they do.”

Buckhorn also contracted with a local company, NCI Datacom, to install a 120-foot communications tower at the mine, as well as another tower at the company’s headquarters in Republic. The Buckhorn Mine has the body of ore to support the spending on an underground operation, Roberts said. Gold prices, although they have gone down recently, are still hovering around $850 an ounce. And Kinross was eager to get going.

“We could have gone on and fought this thing out in court,” Roberts said. “But both parties realized that would not be a very productive use of our resources.”*greglamm@bizjournals.com | 206.876.5435*