Tribe, Environmentalists Appeal BLM Newmont Mine

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Tribal leaders are joining environmentalists in appealing the Bureau of Land Management's approval of Newmont Mining Corp.'s Phoenix gold and copper mining project in northern Nevada.

The Western Shoshone Defense Project and Great Basin Mine Watch asked BLM Nevada Director Bob Abbey to put the project on hold and review the agency's decision approving the Phoenix project near Battle Mountain.

The groups accuse BLM of violating federal regulations and policy in approving the mine, BLM spokeswoman Jo Simpson said.

"They're saying BLM failed to prevent groundwater contamination and that financial assurances are inadequate," Simpson told the Elko Daily Free Press.

The key objection is over the amount of money Newmont is being asked to set aside for long-term monitoring of possible groundwater contamination from the old mine workings already at the mine site.

The petitioners cite a report by Kuipers and Associates that states that Newmont should post a $60 million trust fund for long-term monitoring and clean up of any contaminated groundwater.

Mary Korpi, Newmont's manager for external affairs, said Newmont is sticking with the $408,000 trust fund figure that the company agreed to establish for potential clean up 60 years or more from now. Newmont and BLM expect the fund to grow with interest.

"It's based on 70-plus years of history of investment," she said, adding that the BLM also is requiring a review every three years of the amount in the trust fund to determine if it is adequate or Newmont needs to contribute more to the fund.

"Every aspect of the operation is planned, with environmental protection built into it," Korpi said.

BLM and Newmont estimated acid rock contamination of groundwater might entail water treatment in 60 years. The environmental impact statement on Phoenix states that acid rock drainage could last for up to 10,000 years, if unchecked.

The U.S. Environmental Protection Agency earlier argued with BLM over the amount of the trust fund, maintaining it would take many millions of dollars to clean up the water and acid rock drainage.

EPA suggested a trust fund of $33.5 million in its comments to the environmental permitting process, while the new report suggests $60 million.

Newmont's plans for Phoenix call for expanding open pits in Copper Canyon mined in the past by Battle Mountain Gold Co. and earlier companies. Newmont acquired Battle Mountain Gold a few years ago.

Tom Myers, executive director of the Great Basin Mine Watch, acknowledged the Phoenix project may be the best way to eventually clean up the site, but "we're concerned about the trust fund."

"Newmont argues $408,000 will grow. EPA argues the cost will be hundreds of millions of dollars in 60 years," Myers said.

Pam Jarnecke, the BLM's coordinator for the Phoenix Project in Battle Mountain, said Abbey has 21 days to decide whether to issue a stay on Phoenix and review the decision record.

Capital costs to build the project are estimated at more than $200 million, with mill construction and development work scheduled to start next year.

Newmont expects production in 2006 and expects to produce 400,000 to 450,000 ounces of gold per year and 18 million to 20 million pounds of copper per year from Phoenix.