Will California Rush to Mine Gold Again?


photo: goldrushfieldtrips.com

California has a history rich in gold, but despite sky high prices, the gold mining industry doesn't seem positioned for a revival in the state. The price of gold is more than $1363 an ounce, causing some folks in areas near historic lodes to clamor for a renewed mining industry in California. But cultural attitudes have shifted, and residents concerned about the environmental impacts and effects on tourism seem more inclined to preserve mining as a relict of the past. At its peak in 1853, California produced more than 3 million ounces of gold. But during World War II, production almost collapsed when the federal government ordered the closure of "nonessential" gold mines to free up equipment to extract metals for military use. By the 1970's, when the price was allowed to float again, most of the California mines had closed. Last year, California only produced 161,000 ounces, not much compared to Nevada, the leading state for gold mining, which produced more than 5 million ounces.

But the allure of gold could bring about more mining. Companies are trying to reopen old mines near Sutter Creek and in Grass Valley. Sutter Gold Mining Inc. wants to reopen a mine that runs alongside Highway 49 near Sutter Creek, and has said it's sitting on as much as 680,000 ounces. (At today's prices that's a potential bounty of $900 million).

Critics say the projects could negatively impact the quaint character of the former gold towns and create environmental hazards. Many mine shafts have filled with water, adding environmental issues.

It can take up to a decade to assemble the needed permits for mining in California. The Sutter Creek plan is at least a year away with no guarantees of success. Some residents worry about potential noise and traffic problems, but others think Sutter Gold deserves a chance. Perhaps ironically, a resumption of mining would interfere with the tours of Sutter Gold's mine, one of the area's top attractions. Sutter Gold officials acknowledge they would be forced to close the tours, but insist that mining can coexist with the area's overall tourism trade.

Emgold Mining has been working on the Grass Valley gold mining proposal since 2003, but the mine is still several years from reopening. Emgold faces regulatory and financial hurdles. Still, Emgold CEO, David Watkinson, has said that mining will create 400 jobs in Grass Valley, and that the project has the support of 72% of Grass Valley residents (from a 4 year old survey by the City.)

As the recession lingers, gold mining may be a shiny temptation for California towns still dealing with some of the highest unemployment and foreclosure rates in the country. Hopefully, residents will also remember the landscape degradation and river debris caused by mining, and that the mercury used in gold amalgamation pollutes the air and water that both residents and tourists breathe and drink.

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Tags: California