A new gold rush pits money and jobs against California’s environment

The Washington Post/Scott Wilson

11:45 JST, July 18, 2022

GRASS VALLEY, Calif. – Where the Sacramento Valley steepens into the Sierra Nevada, Susan Love found a home with big windows and pine-forest views. It was the house she shared happily with her husband before his death.

The surroundings, though, are changing.

A long-dormant gold mine within view of her front garden is showing signs of life. Once the second-highest-producing gold mine in the nation, the Idaho-Maryland Mine is again in the sights of prospectors, this time a Nevada-based company proposing to reopen it in this place born more than a century and a half ago in a rush of gold.

There is still a lot of gold in these hills and a lot of money at stake. But across California, a strong environmental ethos and, in many historic places, an economic shift toward tourism are now sharply at odds with the resumption of gold mining, despite its promise of new jobs more than a century and a half after tens of thousands of migrants arrived to strike it rich in this state on the country’s edge.

A frontier chic now characterizes many towns that have moved far from the hard-hat lifestyle of hard-rock mining. Drawing on their gold-rich history to draw tourists, these antique towns have adopted a different view of the actual mining, still a potentially dirty business even if improved from the past.

Love, whose family traveled generations ago from Ohio to join the gold rush, put her home on the market this year and quickly accepted an offer. But the buyers backed out once they discovered what might emerge next door. Now she fears that, at 69, she is stuck in a home without value.

“It all comes down to our local politicians and I think a lot of it will come down to money,” said Love, a retired preschool teacher. “There are no miners here so where would they all come from, where would they live?”

The timeless treasure making a comeback in the era of cryptocurrency here in the Sierra foothills, the cradle of California’s 19th-century gold rush, reshaped the state’s population and economy, often at the expense of native residents and a fragile environment.

But interest has spread beyond here, as the price of gold skyrockets. Shuttered hard-rock mines and, further south, remote fault lines rich with gold dust have become coveted targets for companies willing to take on community opposition and California’s environmental regulations.

The economics are obvious. When the Rise Gold Corp. bought the Idaho-Maryland Mine in 2017, the average price of gold was $1,260 per ounce. So far this year’s projections suggest the average price will increase to $1,830 an ounce, a 45% increase and a record high if those estimates hold.

The U.S. Geological Survey reported that $10 billion of gold was mined in the nation last year, much of it from Western states. California estimates that mining – excluding fossil fuels – generates more than a half-billion dollars annually in economic activity, and after bottoming out in the early 2000s, the amount of gold mined here each year has been climbing.

“Gold is used as a hedge against economic insecurity, and we’ve certainly seen a lot of that in recent years,” said Elizabeth Holley, an associate professor in the Colorado School of Mines’ department of mining engineering. “And if you consider the time when Idaho-Maryland operated, the methods have matured greatly and today you can mine much more efficiently and at lower grades of ore.”

Given the high prices, Holley said, the interest in gold has expanded well beyond traditional mining states in the West. She serves on a National Academies of Science board examining the potential effects of gold mining in Virginia.

“The environmental and social impacts are always concerning for a community,” Holley said. “But modern mining is highly regulated and I do think people conflate historic practices with what mining is now.”

Nonetheless, the potential for new prospecting has inspired a visible public resistance, a jobs vs. community character debate, that at its heart asks whether the Golden State really needs gold anymore.

“There is no industrial need for gold – it is just a luxury,” said Ralph Silberstein, a 24-year resident here who heads the Community Environmental Advocates Foundation and MineWatch, a group that opposes the Grass Valley project. “Sure there are a lot of old mines around here, but all have a toxic history behind them.”

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They are the breadcrumbs of gold exploration, the small chunks of quartz that lay scattered across the desert east of Mount Whitney, about 300 miles south of Grass Valley.

Where there is quartz, there is often gold. There is a lot of both in this place, another target in another part of the state for corporate prospectors. The small, white minerals, slightly translucent, are as common as wild sage in this dry, quiet stretch of the Eastern Sierra.

From the Lee Flat rises Conglomerate Mesa, a 22,000-acre plateau administered by the Bureau of Land Management and held sacred by the Lone Pine Paiute Shoshone and the Timbisha Shoshone tribes.

Native American petroglyphs are visible on the volcanic rocks that line the dirt road toward the mesa, along a plain thick with Joshua trees, suffering in other parts of the state as the climate warms.

Wind blows down through narrow canyons. From the trunks of small trees, boulders and thick-brush branches flash small silver tags the size of quarters. They are etched with numbers, individual claims to mine these small plots for gold.

The mesa is in the middle of nowhere but silent desert, land stretching between the state’s highest peaks and the depths of Death Valley.

“Protect Conglomerate Mesa,” reads a billboard along U.S. Route 395, as it cuts through the closest town of Lone Pine. “Don’t Mine Death Valley’s Doorstep.”

Companies are exploring in and around the Walker Lane, part of a geological fault that roughly follows the California-Nevada border. To mine these often remote areas requires a different process than the one used in the Sierra foothills, one that is more water-intensive.

“It all comes down to water, as does everything in the American West,” said Wendy Schneider, executive director of the Friends of the Inyo, a nonprofit seeking to protect Conglomerate Mesa. “And there is none.”

A Canadian company called K2 Gold has proposed a major project to mine Conglomerate Mesa through an open-pit system, which uses a chemical process that in this case involves cyanide leaching through earth to drag out gold. Bald spots along the mesa’s rolling plateau are evidence of the company’s drill tests.

In March, the Bureau of Land Management effectively froze the project, which would require dozens of miles of new roads in addition to the construction of the pit system which would rely on 30 drill sites, more than the company originally proposed.

In a statement, the bureau said that “drilling at Conglomerate Mesa raised natural and cultural resource concerns from the public, Tribes, and other agencies. Based on these and other factors, the BLM determined a broader environmental analysis would be required.”

Following the order, the company announced that it would put the project on hold. But in recent weeks, K2 Gold has informed opponents of the mine, according to members of those groups, that it will proceed with preparing a full environmental impact statement, as the federal agency has required. Neither the bureau nor K2 Gold would comment further.

Friends of the Inyo and the local tribes are seeking federal protection for the land. Not only is the area a new haven for the vulnerable Joshua tree, it is also valued as a “dark sky” preserve in a state where light pollution often masks star-filled nights.

K2 Gold controls hundreds of claims around the mesa. Schneider said that even more stringent environmental protection would not retire those claims because of a 19th-century federal law designed to encourage Western expansion and, as incentive, protect mining rights.

“None of this, none of the protections, will make it impossible to mine here,” she said. “That’s why we must focus on the values that Conglomerate Mesa represents.”

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In Grass Valley, about 30 miles north from where gold was first discovered in this state, tourists drawn by the lure of the past stand in line at gluten-free bakeries. Sushi restaurants and wine-tasting rooms occupy the brick-and-balcony facades of buildings, now restored, that stood during the Gold Rush.

There are craft drinks served at the Golden Gate Saloon and, across the street from the allegedly haunted Holbrooke Hotel, a restaurant is set to open called The Little Nugget. From the center of town rises the spire of a 1940s-era movie theater called the Del Oro – “of gold.” The landmark opened in the same decade that the Idaho-Maryland Mine near Susan Love’s home first shut down.

“I’ve never met a single person who wants it,” Kendell Christianson, 69, who in his retirement fixes electronics, said of the mine. “What is the purpose of this? Greed.”

Placards opposing the mine, stuck into main-street medians and shopping-mall landscaping, are visible around town. But there is history to contend with.

In a sign of how deeply it defines the region’s character, an old mine cart marks the entrance to the county administrative building, where the decision about whether to open the mine will eventually be made. The county could collect as much as $10 million a year in additional property taxes if the mine is developed.

“Mining is part of Nevada County’s legacy and there may still be gold in the ground,” said Brian Foss, the county’s director of planning. “But the community has grown up around these places, and it will be up to the board of supervisors to decide whether this is an appropriate use of this location.”

The Idaho-Maryland Mine covers about 175 acres, some of them partly surrounded by high pines and fir. Adjacent to a pond, a large cement shaft emerges from one corner of the main mine site, where rock was once hauled from hundreds of feet underground to be cracked open for gold.

It produced 2.4 million ounces of gold before being shut down in 1942 by the U.S. government, which following Pearl Harbor sought to shift mining resources toward metals such as copper that were essential to the war effort. The mine reopened after the war, but never achieved the same productivity before it closed again in 1956.

If it were to reopen now, the mine would be felt as well as seen. While covering far less ground on the surface, the mine could expand to 2,585 acres underground, the limit of the company’s mineral rights, although the prime gold deposits are concentrated in smaller areas. The underground blasting would be conducted in those seams, but would still likely be felt in some nearby homes and buildings above ground.

Rise Gold Corp. is seeking an 80-year permit from the board to operate the mine around-the-clock seven days a week, a testament to just how much gold it believes remains in the ground.

“If you could put this mine back in production as it was when it closed, it would be one of the top gold mines in the world,” said Ben Mossman, the company’s chief executive, who displays a series of core samples in his office here bearing thick seams of gold. “This is a major mine.”

The company’s goal would be to extract about 1,000 tons of gold-bearing rock a day. Mossman said he expects that annual revenue would exceed $190 million, or about 4 percent of the county’s economy.

“We really don’t know how much gold there is and what the grade will be,” he said. “More work needs to be done. But we have a historic rate of production to go by.”

Mossman said the project would bring more than 300 new jobs into the community, but the company will not be building housing in a market that is very tight. It is one major concern – the stress on an already-tight housing market – held by those who live here. The county’s unemployment rate is 6 percent, higher than the state average of 4.3 percent. “Help Wanted” signs are common sights.

Opponents also cite potential traffic problems and the environmental risks associated with an industry that uses arsenic, mercury and other toxic chemicals in gold processing. Rise Gold Corp. would be responsible for cleaning up one highly polluted part of the mine site, the legacy of a previous operator, at a cost of about $3 million.

Mossman said there would be safeguards in place to prevent similar problems. Much of that is the subject of a thousand-plus page environmental report that county supervisors are using to guide their decision, which could come before the end of the year.

“There used to be a big difference in regulations between California and other states,” Mossman said. “But that has narrowed, as the regulatory burden has increased in other jurisdictions, and made California much more attractive for projects like this.”

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This part of the Sierra foothills is fire country, and the valley that falls away toward the South Yuba River is bone dry. The Idaho-Maryland Mine has raised concerns about water – an unknown number of private-home wells are predicted to run dry because of mining use near the site itself, in addition to the potential chemical spillover from its ponds that could make its way into a highly popular river system.

“We have to ask ourselves if this is the way we want to be using our most precious resource,” said Melinda Booth, executive director of the South Yuba River Citizens League, a nonprofit that advocates on behalf of and helps maintain a river that draws nearly a million visitors a year. “I think the community says no.”

In Nevada City, the county seat as close to the mine site as Grass Valley, there is an equally picturesque downtown with saloons and lattes and boutiques. There is also a storefront museum. Its exhibit is called, simply, “Erased.”

The 1848 discovery of gold here overwhelmed the native people – the Nisenan – and a population of roughly 9,000 at the time is now a loose diaspora numbering just under 150 people.

In 1913, the federal government granted the Nevada City Rancheria Nisenan tribal status and land. But the government removed that status a few decades later and, in 1964, sold the land it had set aside for the tribe.

Shelly Covert, who runs the museum, has been seeking restoration of the tribe’s federal status and the land since she was old enough to hear stories about its loss. Her family has helped lead the tribe for generations.

“We don’t really have a voice,” Covert said. “The exhibit is called ‘Erased’ for a reason.”

As a child, Covert, now 55, recalls her family recounting how her ancestors had no use for gold. Then, the stories go, nuggets were so plentiful you could pick them up off the ground and use them as fishing weights or slingshot stones.

“It was laying around everywhere,” she said. “It was just kind of useless.”

Among the exhibits in the museum hall is one dedicated to the Gold Rush, when roughly 300,000 prospectors arrived in and around Grass Valley, displacing the Nisenan, spreading disease and stealing land they quickly degraded with high-intensity mining.

“The land is just coming back after decades of this, with a lot of hand-holding,” Covert said. “And it always feels un-American to oppose jobs, jobs, jobs. But at what cost?”