North central Washington's Buckhorn gold mine is scheduled to close at the end of 2015, a frightening prospect for the area's economy.
That closure will eliminate 360 jobs in forested, mountainous Ferry County with its slightly more than 7,500 residents and in the neighboring Omak area with about 8,200 people. The loss of 360 mining jobs is expected to kill another 380 jobs from the economic ripple effects.
"That's akin to Boeing losing 40,000 to 50,000 people in the Seattle area," said Lt. Gov. Brad Owen.
Earlier this month, on Oct. 9, Owen and several legislators met with state officials and county representatives in Republic, Ferry County's main town of about 1,000 founded in the 1890s by gold prospectors. They discussed the impending closure of the Buckhorn mine, 45 miles away, why a new gold mine is not on the drawing board, how the area can cope and what needs to be fixed.
Looming in the background was the question of how many other small, one-industry Washington towns face the same fate as Republic. "Even though the crisis is in Ferry County, this could be happening in any rural county," said Rep. J.T. Wilcox, R-Yelm. Wilcox added that major cities and big corporations have the political savvy to forecast and deal with economic ups and downs, but small towns and small firms do not.
Another factor is that the majority of this area is owned by the federal government — a factor that leads to numerous permitting issues plus clashes between conservationists and those more focused on economic development. "This has a huge impact on the ability of our communities to grow jobs,” said Rep. Shelly Short, a Republican from Addy in neighboring Stevens County.
Right now, the mine closure and accompanying job losses appear inevitable. In 2011, Kinross's Buckhorn payroll totaled $19 million, with an average annual salary of $82,559, compared to the average Ferry County annual wage of $35,290. Kinross paid $1.2 million in taxes to Okanogan County and $230,000 in taxes to Ferry County in 2012. It has donated roughly $1 million to community activities, including paying for local school sports programs when levies twice failed.
Republic Chamber of Commerce President Jim Milner said some local emotions hit opposite extremes: "Turn out the lights, we're all gonna shrivel up and die," is one view. Another viewpoint holds, "It's closed down before, and it will return." One problem is that the timber industry was thriving to cushion previous gold mine closures, he said. At least six other gold mines have opened and closed earlier in Ferry County.
"Some of us are trying to meet at the middle ground (between panic and complacency) here," Milner said. He added, "It's going to require some significant efforts, and we need to work together to do this. We're not requesting handouts, but want partnerships to get things rolling.”
The Prospector Inn is one of Republic's tourism accommodations. Photo: John Stang
Ferry County’s economy has always been based on natural resources — timber, cattle and gold mining. But timber mills have closed and federal regulations have cut back on cattle ranching. "The one industry we could count on is mining, and now we're facing the closure of that,” Milner said. Sen. Brian Dansel, R-Republic, said: "We've gotta fight like hell to keep mining a viable industry in Ferry County."
The Crown Resources Corp. scouted the Buckhorn site before Toronto-based Kinross Gold Corp. bought Crown Resources. Kinross began mining there in 2008 with an expected stay of seven years. Kinross has mined at least 1.1 million ounces of gold worth roughly $1,200 an ounce. That translates to approximately $1.3 billion worth of gold out of 3.85 million tons of ore. Much of that revenue went to the original purchase of the mine, plus all the operational costs, payroll, goods and services with local businesses, and environmental and reclamation costs.
That mining was not without glitches. In 2012, the Washington Department of Ecology fined Kinross-owned Crown Resources $395,000 for failing to maintain an adequate rain water and snow melt capture zone at Buckhorn in 2011 and 2012; resulting landslides caused contamination of nearby Gold Bowl Creek. That fine was levied after six previous state violation notices with fines totaling $62,000 for permit violations and inadequate measures against landslides. In 2013, Crowns Resources settled with the state to pay $80,000 of the fine and to tackle $180,000 of environmental work.
Kinross and the locals contend the upcoming economic crisis could have been headed off with timely exploration for a new gold mine site. Shortly after beginning to mine the Buckhorn site in 2008, Kinross began work on getting approval of a "plan of operations" from the U.S. Forest Service, the U.S. Bureau of Land Management and the Washington Department of Natural Resources to allow exploration for a new mining site to go into use after Buckthorn closed in 2015.
After gold is found, the permit process to actually mine takes two to five additional years — assuming all the permits are approved. Originally, Kinross submitted its plan of operations proposal separately to the three agencies in 2010. Then all the parties decided to send one plan-of-operations proposal jointly through all three agencies, which occurred in September 2011.
In early 2014, Kinross decided to withdraw its proposal for an exploration plan of operations because of business-related cost-effectiveness reasons, said Victoria Wilkins, environmental coordinator for the forest service's Methow Valley Ranger District who helped process Kinross' proposal, and Mark Ioli, general manager of the Kinross Kettle River and Buckhorn operations.
“We need permission to get out there and look. It no longer becomes a viable business possibility because of the time frame," Kinross' Ioli told Owen and the visiting legislators. At that point, Kinross did not expect an exploration green light coming prior to 2016.
With Kinross' withdrawal, the agencies halted work on the plan of operations to explore for gold, Wilkins said. "The proposal was not very specific. It was very broad and complex," Wilkins said.
Kinross' proposal to explore was complicated because it covered 9,000 acres near the current Buckhorn mine with the actual site to dig exploratory boreholes being unknown, Wilkins said. An estimated 507 acres — again with specific location unknown — would have to be disturbed. The 2-and-a-half-inch diameter boreholes could number as many as 975. The proposal received roughly 300 comments from the public. Concerns were raised about wildlife, tribal and pioneer cultural sites, and effects on local streams.
Rep. Short said the Forest Service made "endless amounts of data requests. They have endless studies. Then, when everything is done, some agency raises the barometer and requests more data." Rep. Joel Kretz, R-Wauconda (a town that was founded in 1889 as a mine site), said: "This is a system that is not functioning. It's designed so one person with a personal agenda in key spot can stop it."
The actual permitting for the current Buckhorn site took 16 years, much of which was due to dogged tracking of concerns by the Okanogan Highlands Alliance, a local environmental organization (partly funded by Seattle's Bullitt Foundation). The Okanogan group was worried about the mine's effects on five area streams. The alliance, Kinross and the state agreed in 2008 on terms on monitoring the site to allow mining to begin.
Gov. Jay Inslee, Washington Lands Commissioner Peter Goldmark and Ecology Department director Maia Bellon have supported efforts to speed up the exploration permitting process, legislators and other people said at the Oct. 9 meeting. Several legislators wanted the appropriate state and federal agency officials, legislators and congressional members to meet in Republic in the near future to discuss how this situation should be addressed.
Several state officials discussed programs to help laidoff workers individually.
Boosting tourism was briefly mentioned, but that doesn't ease the worries. Sen. Dansel said tourism has only limited potential for Ferry County, where he has lived all his life. He said: "We gotta have natural resources-based industries here. That's what it takes."
