MINING REFORM ARTICLE; LA RIMES 11-2-07

rehab · MINING REFORM ARTICLE; LA RIMES 11-2-07

Mining law overhaul has prospects
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The House votes to add environmental protections as well as royalties on minerals taken from public land.
By Richard Simon, Los Angeles Times Staff Writer
November 2, 2007
WASHINGTON -- When a law was passed in 1872 to let miners extract minerals virtually for free from federal lands, it was meant to promote settlement of the West.

With that goal long since accomplished, the House voted 244-166 on Thursday to overhaul the 135-year-old law, adding protections for the environment and, for the first time, requiring miners to pay royalties for the gold, silver, copper, uranium and other minerals they extract from public lands.

The White House has threatened to veto the bill but also signaled willingness to negotiate. Driven by worries that mines are damaging the environment and complaints that private companies are shortchanging the government, the decades-old efforts to overhaul the law signed by Ulysses S. Grant have their best prospects in years for success.

"Times have changed," said Rep. Gabrielle Giffords (D-Ariz.). "Today's West now depends on the health as well as the conservation of our fragile environment, as much as it relies on mining."

The proposed rewrite of the mining law underscores the political change in the Capitol since Democrats took control of Congress last year. Just two years ago, environmentalists were on the defensive, fighting a bid in the Republican-led Congress to let mining companies buy federal land with valuable mineral deposits for nominal fees.

Unsuccessful efforts were made to overhaul the law in the 1970s and in 1994.

Chance for compromise?

The bill's fate will rest heavily on Senate Majority Leader Harry Reid (D-Nev.), a gold miner's son from the biggest gold-mining state. He opposes a royalty on operators of existing hard-rock mines but has hinted he might allow royalties on new operations as a way to compromise on a priority of environmental groups, an important Democratic constituency.

After the vote, Reid said, "While I cannot support many of the provisions in the House bill, I believe that the opportunity still exists for common-sense reform."

Efforts to forge a compromise could be aided by the fact that the bill's leading champion in the House is Rep. Nick J. Rahall II (D-W.Va.), the pro-mining chairman of the House Natural Resources Committee. He has pushed to revamp the law, "the Jurassic Park of all federal laws" as he called it, for two decades. "I think all sides want finality," he said.

A spokesman for Sen. Jeff Bingaman (D-N.M.), chairman of the Senate Energy and Natural Resources Committee, agreed that prospects for a compromise are good. "Consensus for change is building, even in the mining industry," Bill Wicker said.

John D. Leshy, who was an Interior Department solicitor in the Clinton administration, said Bush could come under pressure to sign a bill that passes with bipartisan support.

"If something came out with consensus support, I would think the industry would be going down to the White House, saying, 'Sign it, because it could get worse after you leave,' " said Leshy, who teaches at UC Hastings College of the Law. "On the other hand, I've been at this a long time, and I know much better than to hold my breath."

Environmentalists were encouraged by the House vote.

"Rapid Western growth, mounting cleanups costs and a rash of new claims make mining reform a priority for the American public," said Jane Danowitz, director of the Pew Campaign for Responsible Mining, who stood with a bearded man dressed as President Grant, buttonholing lawmakers on their way to vote.

The overhaul also has the support of the Jewelers of America, a trade association for retail jewelers, as well as Tiffany & Co., because of environmental concerns.

Opponents, including the National Mining Assn., argue that the measure would impose "the highest royalty in the world," discourage domestic mining and make the U.S. more dependent on other countries, such as China, for minerals critical to manufacturing.

"It would be a sickening

twist of fate if the U.S. had to begin importing uranium from Iran," said Rep. Steve Pearce (R-N.M.). "There are people who want to make the West simply the vacation ground for the rest of the country. . . . We want jobs."

Rep. Don Young (R-Alaska) accused the bill's supporters of pandering to the environmental lobby. "This is an easy 'green' vote for a majority of the members in this body to have tacked onto their so-called environmental score cards," he said, noting that hard-rock mining operations are concentrated in the West.

Twenty-four Republicans joined 220 Democrats in voting for the bill. Three Democrats joined 163 Republicans in voting against it. California House members voted along party lines, with Democrats for it and Republicans against it. Rep. Dennis Cardoza (D-Atwater) and House Speaker Nancy Pelosi (D-San Francisco) did not vote.

New royalties

The administration complained that the bill imposes a royalty on mining claims "where property rights already have been vested, could reduce the continued domestic production of hard-rock minerals" and imposes environmental rules that are "unnecessary."

The measure would permanently end the sale of mining claims at bargain-basement prices, though such sales have been prohibited since 1994 under a congressional moratorium.

It would establish an 8% gross income royalty on new mining operations and 4% on existing operations. As federal law stands now, companies drilling for oil and gas, and mining for coal on federal lands, must pay royalties, but hard-rock miners do not.

Under the bill, the royalties would be used to clean up abandoned mines that have been blamed for environmental problems.

The measure is moving through Congress as the number of mining claims has skyrocketed, driven by rising prices of minerals such as gold and uranium. More than 21,300 mining claims have been staked within 10 miles of California's national parks and monuments, federal wilderness areas and roadless areas, according to an Environmental Working Group analysis of U.S. Bureau of Land Management records.

California was the 7th-ranked gold producer among states in 2006, according to the U.S. Geological Survey. Arizona, Nevada and Utah are the top three hard-rock mining states.

The measure "ensures that proposals to mine near national parks and national monuments are carefully scrutinized . . . and requires the secretary of the interior to deny a permit to mine if a national park's resources cannot be protected," according to the Democratic staff of the Natural Resources Committee. The bill specifies that a mine's impact on park resources such as water, scenic assets, acoustic qualities and "other changes that would impair a citizen's experience" must be considered before issuing a permit.

richard.simon@latimes.com

rehab

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rehab · MINES GETTING DEEPER AS GOLD GOES UP IN VALUE

LA RIMES 11-5-07

Mines deepen as gold climbs

Workers are going to dangerous depths in South Africa as prices top $800 an ounce.

By Michelle Faul, The Associated Press
November 5, 2007

JOHANNESBURG, SOUTH AFRICA -- South Africa's gold companies, already mining at the world's deepest depths, are looking to plumb even deeper veins in a new gold rush spurred by record prices.

The deeper miners go, the richer the ore being uncovered. The price in dangers, though, includes rockfalls, poisonous gas explosions, flooding and earthquakes.

That has stirred up concerns about the safety of miners, who experts say have the worst lot among South Africa's industrial workers.

Some foreign companies have been deterred by the risks here. But Gold Fields Ltd., the country's second-biggest producer after AngloGold Ashanti Ltd., is ready to set a record, digging deeper than 2.5 miles at its Driefontein mine.

A worker was killed there in September by a tremor at just below two miles. By comparison, the deepest mine elsewhere in the world is in Ontario, Canada, at 1.5 miles.

Harmony Gold Mining Co., the world's fifth-largest producer, wants to develop a mine below an existing one at Elandsrand, at a depth of about two miles, which it says would extend the life of the mine by 18 years.

Some 3,200 miners working to deepen the mine shaft there in September were trapped more than a mile underground. They were rescued after some spent nearly three days underground.

At a neighboring mine, two people were killed in an accident a week earlier. And 25 workers mining illegally died in a fire at an unused part of a Harmony mine in early October.

Gold prices topping $800 an ounce on a weak dollar and concerns on inflation have spurred miners to work ever deeper in marginal mines. In 2005, nine mines employing 69,000 workers were considered marginal or loss-making. Today, mining deeper, they're profitable.

Although many miners say it's possible to go deeper and to do so safely, the country's Chamber of Mines has set up a committee to consider the dangers.

Despite the bonanza, South Africa's gold production continues to fall as resources have been depleted. The United States is threatening to win its top position in the world, with Australia and China lagging far behind.

According to the Chamber of Mines, South Africa's production has fallen from a high of 1,000 tons in 1970 to 275 tons last year. Exports fell from 50% of the country's total in the 1980s to 8.2% of exports in 2006.

Last year, South Africa exported 36 billion rand ($5.17 billion) of gold and sold 720 million rand ($103.5 billion) locally, said Alex Conradie, an economist at the Department of Minerals and Energy.

Gold mining remains a vital part of the South African economy. It's a major source of tax revenue and one of the biggest private-sector employers in a country with 25% unemployment. But the number of miners has dropped drastically from 342,439 in 1996 -- when 100,000 miners were laid off as gold prices slumped -- to 137,611 in 2005, even as earnings have increased.

Of 119 people reported killed in South African mines last year, 113 died in gold mines. By comparison, the United States suffered five fatalities in all its metal mines in 2004, according to the U.S. National Institute for Occupational Safety and Health.

The poorly paid miners are the worst off in the industrial sector, said May Hermanus, director of the Center for Sustainability in Mining at the University of the Witwatersrand and a former government chief inspector of mines.

In August, a mine workers' strike won wage increases of 7.5% to 10%. The average miner makes $365 to $511 a month.

rehab · SCROUNGERS WITH NUTHIN, TAKING RISKS TO GET SOMETHING

LA RIMES 11-5-07

Illegal underground hunt takes toll

'Gold pirates' descend into abandoned sections of mines in a dangerous and illegal quest for the precious metal.

By Celean Jacobson, The Associated Press
November 5, 2007

WELKOM, SOUTH AFRICA -- Thobela Booi arrived in this mining town with hopes of landing a job that would enable him to support his wife and child. He ended up 5,000 feet underground, killed by the fumes of a raging fire.

Booi, 30, had been one of hundreds of desperate laborers who risk their lives working in the shadows of legal mining operations, sneaking in through abandoned or poorly secured shafts and making their way through a warren of interconnecting tunnels to the ore.

South Africa is the world's largest producer of gold, and as the bullion price has risen -- and legal mines dig ever deeper to meet the world's voracious demand -- so have the risks these "gold pirates" are prepared to incur in pursuit of the precious metal.

The gold poaching endangers not only the pirates -- known here as "zama-zamas." Haphazard digging -- the miners often lack technical skills -- can destabilize shafts, putting thousands of legal miners' lives at risk.

The pirates can spend weeks, even months underground, with food, drink and even mail ferried to them by runners.

Clandestine mining reportedly produces about $250 million worth of gold a year, but the gold pirates see little of that money. The workers are believed to be recruited by organized crime rackets that ship most of the gold to Switzerland.

The miners, often armed with guns and homemade grenades, have been known to smoke underground and use gas stoves, even in the presence of highly flammable methane gas.

Booi had been missing for six weeks before his body was found. His body was one of 25 brought to the surface at No. 8 Shaft at the St. Helena Gold Mine, outside Welkom, one of the centers of South Africa's gold mining industry.

The bodies were removed by police from one of the mine's underground stations in late September. It is believed the miners died from toxic fumes or got caught in a fire that erupted Sept. 18 and blazed for days at an unused section of the mine, five miles from the bodies.

They had been left by their colleagues, who made an anonymous phone call to mine security telling them where to find the bodies. Some had stickers giving their names and hometowns.

Booi didn't have a sticker. His brother had to identify him among the other bodies.

"I want to know how this happened," said the brother, Siyabulela Tenge, dazed and angry after seeing Booi's corpse at the Welkom state mortuary. "How did he go underground?"

Tenge has worked for the Harmony Gold Mining Co., which runs St. Helena. He has been underground and knows the hot and dangerous conditions. He says his brother was ill-prepared for the work: "My brother wasn't a miner."

There are several police and mine industry initiatives to tighten security and clamp down on illegal mining. In late September, Welkom police arrested 120 illegal gold miners as they surfaced, probably fleeing the underground fire.

The pirates mine the ore and then extract gold using dangerous mercury, often while still underground or in illegal processing plants.

Although the number of illegal miners underground at any one time is hard to verify, anecdotal accounts put it as high as 1,000.

The municipally owned G Hostel, a wasteland of bungalows and sewage on the outskirts of Welkom, is notorious for being a site from where miners are recruited for illegal operations.

A day after police raided the hostel, reporters were shown the remnants of the crude processes taking place there -- blackened zinc sheets and tin containers in which mercury is burned. Large plastic mining pans stood out amid the filth, some with freshly washed silt coating the bottom -- in them a glitter of gold dust.

One miner, who would not give his name, described the hell at the heart of the gold pit: "Sometimes in the mine it is difficult to identify who is working next to you It's so dark."

MINING REFORM ARTICLE; LA RIMES 11-2-07

MINES GETTING DEEPER AS GOLD GOES UP IN VALUE

SCROUNGERS WITH NUTHIN, TAKING RISKS TO GET SOMETHING