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Copyright 1999 Federal Document Clearing House, Inc.  
Federal Document Clearing House Congressional Testimony

June 15, 1999


LENGTH: 2068 words


Statement of Danny E. Robertson Operations Manager - Crown Jewel Mine Battle Mountain Gold Company on Issues related to the March 25, 1999 letter from the Department of Interior which vacated the Record Decision and disapproved the Plan of Operations for the Crown Jewel Mine in Okanogan County, Washington before the Subcommittee on Forests and Public Land Management of the Energy and Natural Resources Committee United States Senate June 15, 1999 My name is Danny E. Robertson. I'm not a lawyer, and I don't pretend to understand the nuances of the law, but I think I have common sense. I hope my comments will be taken in that light as we discuss the outrageous impacts brought on by the illogical Solicitor's Opinion. I am the Operations Manager for the Crown Jewel Mine. I am an engineer by profession and have been in the mining business for close to 25 years. Some time fairly early in my life, it became clear to me that you can't put rock from a twenty acre hole on a five acre piece of real estate. I know that some people would have you believe that large scale industrial mining is a recent development made possible by technological advances such as chemical leaching. If there is any need, I'm here to tell you that that is nonsense. As a boy, I remember a field trip to see the Chino Pit outside of Silver City, New Mexico. It was bigger than twenty acres. The history of the American West is the history of large scale industrial mining. From the days of the Comstock Lode, the mining industry has moved very large quantities of rock. The American West is dotted with large historic mines, such as the Comstock Lode in Nevada, Bingham Canyon in Utah, Lead in South Dakota and Lavender in Arizona. I've worked for Battle Mountain for over 14 years. Battle Mountain is a U.S. company with operations in the United States and other countries. Battle Mountain's Statement of Environmental Policy and Principles states that: As a society, we must balance the creation of jobs, goods and services that supply our needs, wants and economic growth with the resulting consumption or use of the earth's lands and resources. BMG recognizes that mining activity impacts the natural and human environment as well as the economic environment and responsible mining must involve a commitment to environmental stewardship in all phases of our operations. My annual bonus is in part dependent on the environmental performance of the Company. The Crown Jewel Project is located in the state of Washington. The property position has remained largely unchanged since 1992. The proposed mine is located in an area that has largely been previously mined or clear cut. There are no real environmental issues with the Project, no endangered species, no cultural resources, no extensive wetlands. The proposed mine is in an extremely economically depressed area with high unemployment. The poverty rate for Okanogan County is nearly twice the state average. Because of financial constraints, the County isn't replacing two public health nurses. This leaves an area the size of Connecticut with two public health nurses. Battle Mountain has targeted eighty percent of its approximately 140-member workforce for local hire. Payroll at Crown Jewel will be almost $5 million each year. Battle Mountain will pay in excess of $1 million a year in state and local taxes. During construction, state and local governments will see a one-time infusion of almost $3 million. The Project has overwhelming local support, including the support of organized labor and local governments. The Crown Jewel permitting process has been unprecedentedly thorough. Of the $80 million Battle Mountain has spent on the Project to date, some $20 million has been spent on permitting. The Plan of Operations was submitted in 1992. The draft EIS was issued in mid-1995. According to the Director of the Washington Department of Ecology the permitting process has represented "the most rigorous environmental. analysis the state has ever conducted on a project of this type .... No other proposal has received this level of environmental scrutiny." In January of 1997, the final Environmental Impact Statement and joint Forest Service/BLM Record of Decision were issued for the Project. The multi-volume Environmental Impact Statement considered numerous potential alternatives. The Record of Decision selected the alternative for development (that is the configuration) of the Project. The Record of Decision stated that the Selected Alternative is 11consistent with all laws, regulations, and policies" and "will be implemented through the approval of Plans of Operations." Plans of operations are normally formally approved simultaneously with the issuance of records of decisions. However, the Crown Jewel Plan of Operations was not contemporaneously given final formal approval because "Proponent will be required to revise their Plan of Operations to match the requirements documented in the Record of Decision ". Based on the January 1997 Record of Decision, the state permitting effort went forward. Between January 1997 and February 1999, Battle Mountain spent $16 million on the Project. By February of 1999, we had received over fifty state and local pen- nits and posted over $50 million in security based upon the configuration of the Project as selected in the Record of Decision. One of the most important permits was the 401 Water Quality Certification. Upon its issuance, the Director of the Washington Department of Ecology stated "Battle Mountain Gold Company has demonstrated that its proposed project will meet state water-quality standards during the life of the mine and after the mine is closed. . . ". Some of the permit approvals were challenged in court, but the agencies and Battle Mountain have prevailed in every substantive ruling. The Environmental Impact Statement and Record of Decision were successfully defended by the Forest Service in the United States District Court. The Court explicitly found that the rights of the Colville Confederated Tribes would not be adversely impacted by the mine. The issue of the millsite-to-mining claim ratio was never raised. Until very late January of 1999, there was never any suggestion whatsoever from the Bureau of Land Management or United States Forest Service that the final formal approval of the Plan of Operations was not solely conditioned upon incorporating the requirements of the Record of Decision into the Plan of Operations. Almost one full year after we received our Record of Decision, Solicitor Leshy issued his opinion regarding limitations on patenting millsites. We discussed the Opinion with representatives of the Forest Service and BLM. We did not believe, and no one in the agencies ever suggested, that the Opinion had any retroactive applicability to our Project, which had already received its Record of Decision. Furthermore, the August 1998 BLM Instruction Memorandum removed any doubt that any party could possibly have had as to whether the Solicitor's Opinion could adversely impact the Crown Jewel Project. The Instruction Memorandum, which was totally ignored when our Plan of Operations was denied, sets out a four step procedure which must be used before a plan of operations can be denied due to a failure to comply with the Solicitor's Opinion. It is clear that the Crown Jewel Project was approvable pursuant to the Instruction Memorandum because the area in question is not subject to a withdrawal and, as demonstrated in the EIS, the Project will have no unacceptable conflicts with significant resources. On February 4, 1999, 1 was contacted by United States Forest Service personnel and requested to come to their office on February 5th at 10:00 AM pick up the signature- ready Plan of Operations approval documents. Early on the morning of February 5th, they called back and told me not to come to their office because the Plan of Operations had been pulled to Washington, D.C. After February 5th , I inquired from time to time with the local Forest Service and BLM personnel, but was always told that they knew nothing, that the matter was being handled in Washington, D.C. I was informed by our corporate headquarters that Senators Gorton and Reid had requested to meet with Solicitor Leshy to determine what was holding up the Plan of Operations, but that their request had not been granted. March 26, 1999 was the worst day of my career. I got a phone call from Corporate and I was told that we had received an undated letter signed by John Leshy and others. I was told that the airbill for the letter said it had been sent on March 23rd, but that it had actually been sent on March 25th. I was told that, solely based on the November 1997 Solicitor's Opinion, the letter revoked our Record of Decision, denied our Plan of Operations and took my Project from me. After the Company issued its press release announcing the denial, I called the Forest Service Supervisor and the BLM Area Manager. They told me that Washington, D.C. had not informed them about the denial. The Forest Super-visor later told me that the local Forest Service felt "gut shot" by the denial. It was my job to inform a lot of local people about the denial. I informed the local community, the people that were counting on jobs and tax revenues. I also had to call a meeting of all the people that work for me, people that had spent years of their lives working towards permitting an environmentally responsible operation. The atmosphere in the room was like a funeral, not the funeral of an elderly uncle that had lived a full life, but like the funeral of a young child whose life has been senselessly taken. More than one of my employees asked if they should sell their home. The Leshy denial also had broader ramifications. When the markets opened after the denial letter was received, the stock of our joint venture partner, Crown Resources, fell forty-six percent in one day, and continued to free fall thereafter. On the same day, Battle Mountain lost over $100 million in market cap and its share price sank to an all time low. It was the common shareholders of Crown Resources and Battle Mountain that were hurt by this plunge in stock price; shareholders like the Ohio State Teachers' Retirement System, the California State Teachers' Retirement System, the New York Common Retirement System and the Wisconsin Investment Board. Fortunately, Congress saw fit to take emergency action to rectify the grave injustice that befell my Project. I would like to personally give my thanks and the thanks of Battle Mountain Gold Company to the Senators and Representatives, particularly Senator Gorton, who had the courage to address the issue in the face of a massive misinformation campaign. The local media has reported that opponents of mining have tried to spin Congress' action as an anti-environmental rider tacked onto an appropriations bill in the dark of night. As you can see, this had nothing to do with the environment. After years of environmental study, obtaining dozens of permits and having all challenged permits upheld on appeal, the Crown Jewel Mine will be an environmental showcase. Given the grievous and unprecedented nature of the denial, emergency action to put things night was not only appropriate, but necessary. In light of the emergency which they faced, the people in the Okanogan area are overwhelmingly supportive of Congress' action. The Board of Okanogan County Commissioners has stated that: "We believe that had the Leshy decision been allowed to stand, it would have dealt a significant blow to the mining industry in the United States. It certainly would have been detrimental to the economic livelihood of Okanogan County, where unemployment continues to be significantly higher, and per capita income significantly lower than the statewide average." In accordance with the Congressional mandate, our Record of Decision was reinstated on May 28, 1999. When I called the Forest Service Forest Supervisor and BLM Area Manager, I learned that they had not been informed of the reinstatement by Washington, D.C. The Plan of Operations approvals were quickly granted by the local Forest Service and BLM the week of May 31st and we are now moving the Project forward again. Thank you for allowing me to speak to this matter from the point of view of a mine manager in Okanogan County.

LOAD-DATE: June 17, 1999

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