Nevada Mining Exploration battered by withdrawals, sage grouse, bonding hikes

A male sage grouse. Image from Magnus Manske

RENO, Nevada–A gathering storm of proposed federal land withdrawals including proposed sage grouse habitat, as well as stiffer mining bonding requirements under consideration by federal regulators is wreaking havoc on dwindling U.S. exploration programs.

During the annual general meeting of the Nevada Mineral Exploration Coalition (NVMEC) in Reno this week, several speakers urged that independent and major mining company explorationists pay careful attention to proposed changes in bonding requirements under the federal regulatory program the Comprehensive Environmental Response Compensation and Liability Act, particularly CERCLA Section 108(b). This provision requires that owners and operators of mining and exploration projects provide adequate financial guarantees to mitigate risks from hazardous materials at these sites.

NVMEC Debra Struhsacker, senior vice president for Nevada gold producer Pershing Gold, declared that CERCLA 108 (b) is the “most important issue facing our industry.”

A recent D.C. Circuit Court decision approved a settlement agreement negotiated by the EPA and several NGOs requiring EPA to sign a notice of proposed rulemaking for hardrock mining by December 1st and to take final action by Dec. 1, 2017. The Western Governors Association, state regulators, mining associations,  the chairmen of two U.S. House  committees, and the Bureau of Land Management and the U.S. Forest Service have expressed fears that the proposed regulations will cost hardrock mining and exploration companies as much as tens of millions of dollars more, while duplicating existing state financial requirements.

Opponents of the proposed EPA rulemaking are critical of the process itself, which they say was rushed without adequate consultation with governors, state regulators, and others impacted by the proposed requirements. The draft notice has already been submitted to the federal Office of Management and Budget (OMB).

In a presentation to NVMEC, American Exploration & Mining Association Government Affairs Manager Matt Ellsworth asserted the EPA is acting without all the facts, leaving out the experts, and creating higher costs.

“The result is an exorbitant price tag on an already comprehensively regulated industry,” said NMA President and CEO Hal Quinn in a recent NMA news release.

Fed Land Withdrawals Shrink Mineral Territory

Several of the presenters at the NVMEC meeting expressed grave concern about the impact of the multitude of current and proposed federal land withdrawals on exploration and mining, particularly in Nevada of which 86% of the Silver State’s territory is made up of federal public lands.

Five percent or 3.5 million-4 million acres of public land withdrawals are pending in Nevada, with the military asking that over half of those lands would be withdrawn from multiple use including mining and exploration. Among those pending requests a 22,034-acre withdrawal of lands with geothermal potential at the instigation of the Naval Air Station at Fallon, Nevada.

When Nevada became a state in 1864, an estimated 60 million acres were available for mineral entry in Nevada, of that total 16 million acres have been withdrawn. During a five year period from 2010-2016, an average of 210,000 acres per year have been withdrawn from mineral entry, according to State of Nevada calculations.

Mineral County Commissioner Jerrie Tipton, a member of the National Association of Counties Board of Directors, told explorationists “there’s a lot of mineral [potential] in proposed withdrawals to expand military bombing ranges.

“We manage our [public] lands for politics” rather than for multiple uses, such as agriculture, mining, energy and other natural resource sectors, Tipton asserted. “Because of that, we are facing some hard choices.”

In a keynote address to the NVMEC attendees, U.S. Sen. Dean Heller, R-Nevada, observed that Nevada’s mineral resources including lithium have help convinced companies like Tesla to move to Nevada.

To bring the nation’s manufacturers back home to the United States requires a healthy mining industry, Heller suggested. However, he observed, “the biggest threat to your industry right now is a bird.”

Sage Grouse Habitat Expansion

The Bureau of Land Management and the U.S. Forest Service are recommending the withdrawal of 2.8 million acres of lands in Nevada and a combined total of 10 million acres within western mining states of sage grouse habitat from location of mining claims and other uses, depending on valid existing mineral claim rights. The agencies contend too many acres of sagebrush habitat are being lost to invasive species and wildfire, conifer expansion, improper grazing and mining and energy development.

Nevada Division of Minerals Administrator Rich Perry told NVMEC members that 55% of Nevada’s 163,542 active mining claims will be impacted by the federal sage grouse habitat plan.

In his keynote address to NVMEC, U.S. Sen. Dean Heller, R-NV, observed that the federal sage grouse use plan “is not healthy for this [mining industry].” The senator also warned that President Obama will designate several federal monuments in Nevada, which will place tens of thousands of acres of public land off limits to mining and mineral exploration.

Nevada Division of Minerals Administrator Rich Perry told NVMEC members “the bird can be conserved” and its habitat can be addressed without a withdrawal of public lands from mineral exploration and mining operations. The State of Nevada asserts that no justification has been presented by federal land and wildlife management agencies that explains or quantifies if mining or mining exploration is a significant risk to sage grouse conservation. However, state officials have offered a compromise.

Mining attorney Laura Granier of Davis Graham & Stubbs and AEMA’s Ellsworth both expressed concerns about the validity of the science being utilized by federal officials to justify the land withdrawals. Granier was particularly critical of the brief period of time allocated to the U.S. Geological Survey to compile a mineral potential report on millions of acres of western public lands for inclusion in the proposed sage grouse habitat plan.

Perry noted that “we don’t know what is going to be critical minerals 50 years from now” and whether they are now present on the federal lands to be withdrawn from mining exploration.

Mining and exploration companies, as well as manufacturers and suppliers serving mining and exploration companies, are concerned about investing in Nevada mining because of the growing threat of land withdrawals and sage grouse habit from mining, along with the increased financial guarantees the EPA wants to impose on mining and exploration projects.

Sheldon Mudd of the Nevada Governor’s Office of Economic Development told NVMEC the state and its mining sector are “going to have to re-establish ourselves as a mining-friendly state” in the wake of the aforementioned developments.

Image of a male sage grouse. Image from Magnus Manke.

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