IMPACTS OF GOLD MINING IN THE BLACK HILLS OF SOUTH …

IMPACTS OF GOLD MINING

IN THE BLACK HILLS OF SOUTH DAKOTA

BY

ROBERT STACH

DECEMBER 13, 1979

A POSITION PAPER SUBMITTED IN PARTIAL

FULFILLMENT OF THE COURSE REQUIREMENTS

FOR BUSINESS AND ENVIRONMENT B AD 762.

The discovery and initial development of the gold mining

industry in the Black Hills is a good illustration of the nega-

tive impacts of the finding of a new resource. It was a major

contributing factor to a war with the Sioux nation which led to

the defeat of General Custer and his troops at the Little Big

Horn which in turn led to the crushing of the Sioux nation.

Given the historical period encroachment on Indian lands was

probably inevitable but the discovery of gold certainly accel-

erated the process. The initial development was in a typical

boom town atmosphere with gunslingers, gamblers, etc., and a

deadline to separate the "respectable" part of town from the

more rowdy elements.

After the initial discovery the area followed a typical

pattern of development. That is there was an initial period

of numerous placer claims and lode claims with the placer

claims quickly playing out. Then followed a period of consoli-

dation of the lode claims until as usual one mine came into

dominance with several other smaller mines in the area. The

dominate mine was to be Homestake which, as of 1973, had pro-

duced more than 32 million ounces of gold of the total 35

million ounces of gold mined in the Black Hills.' Because

Homestake has had such tremendous dominance of the industry

and is now the only active mine the following discussion will

be mainly confined to Homestake Gold Mine.2

The original Homestake lode claim was staked by the

Manuel Brothers on April 9, 1876. The original claim was

quickly surrounded by a confusing welter of other overlapping

claims. This was the setting when a moderately wealthy Cali-

fornia mining man by the name of George Hearst arrived in

1877. Hearst, believing the area had tremendous promise, in-

corporated the Homestake Mining Company in San Francisco, on

November 5, 1877, with four other men. Recognizing a need to

care for his employees' health, Hearst immediately contracted

with two doctors to furnish medical care. Thus was started

a company policy which was to always emphasize health and

safety and led to the building of a company hospital in 1879

and a company health insurance which initially charged $1.10

a month.

The period from 1877 to 1880 saw Hearst involved in con-

solidating Homestake position. The original claim was much too

small to support the type of mine envisioned by Hearst so he

undertook a series of legal actions and purchases to provide

the nucleus for the modern mine. After consolidating the

claims Hearst left the Black Hills, never to return; however,

his policy of liberal labor management, community involvement,

and innovative mining techniques were continued and kept Home-

stake in the forefront of the mining industry.

A thumbnail sketch of some of the significant historical

events are as follows:3

April 9, 1876 Manuel Brothers stake Homestake claim.

November 5, 1877 Incorporation of Homestake Mining Company--100,000 shares at par $100. Main stock-holders--Trevis, Janis, McDonald, Hearst, and Dodge.

1877 Contracted with two doctors to furnish medical treatment for employees.

1879 Construction of company hospital.

1879 Company furnishes free water to City of Deadwood.

1880

1894

1900

1900

Final consolidation of mine.

Free public library.

Establishment of free public kindergarten.

Introduction of large scale useage of cya-nide process.

1907 Went from 10 hours to an 8-hour work day (however, it was still a 7-day work week).

1909 Union battle which the company won with a lock- out.

1910 Free medical treatment for employees and all their dependents.

1910 Free disability and death insurance.

1910 Subsidence in streets. Company under no legal obligation but recognizes a moral obligation and accepts liability.

1911 Training of special mine rescue teams. Mine has always emphasized safety and has a truly out-standing safety record.

1914 Opening of a community recreation building.

1920 Continued subsidence--company still recognizes its moral obligation.

1921 Purchase of Wyodak coal mine to insure a coal supply for the company-owned electrical power plant.

1930 Company financed housing sold at cost to em- ployees.

1932 Start of sand backfilling which brings a halt to subsidence.

January 1934 Federal Gold Reserve Act which fixed gold at

$35 per ounce. Previously gold had sold at $20.65 per ounce. Windfall profit for the company.

1935 Introduction of a state ore tax; because of exemptions in the law it only strikes Home-stake. Tax is $750,000 the first year which was one-third of State budget.

1935 Jenks vs Ilomestake. Suit claimed that mine tailings discharged into Whitewood Creek bogged down the cattle and killed trees. Court found for Ilomestake on the grounds that an 1881 territorial statute gave Ilomestake the right to discharge inorganic wastes not injurious to health. Ilomestake also had water rights. Both the rights and the statute pre-dated the homesteaders; thus, Homestake was "first in time--first in rights."

1936 Gave college students summer jobs panning old mine sites. Ilomestake all through the depression tried to generate as many jobs as possible. Most of the projects ended up showing a profit for the company.

October 8, 1942 World War II suspenion of gold mining.

July 1, 1945 Gold mines are reopened.

June, 1947 Union election defeated by a 97 percent vote. This was to be followed at approximately two-year intervals by other elections which would see an erosion of the margin.

1947 Continued company support of community acti- vities--dances, ball clubs, etc.

1950 Production costs are still rising but gold is fixed at $35 per ounce. The company begins to diversify into uranium, iron, silver, lead, etc.

1959 Bald Mountain Mine closes leaving Ilomestake the only active mine.

1959 First state report of possible environmental damage--focuses on turbid water and cyanide discharge from the mill.

June 1966 United Steel Workers win union election. Production costs have continued to rise.

Homestake has fallen on hard times, profits arc very low. There arc questions raised as to if the Mine will continue operation.

1967 State declares a moratorium on the ore tax.

March 15, 1968

1970 4

Gold production is freed from the Federal Gold Reserves Act. Price jumps from $35 to $43 per ounce.

Finding of significant levels of mercury in discharge to Whitewood Creek. Company re-quested to discontinue useage of mercury amalgamators.

January 1971 Company removes amalgamators.

April 8, 1971 Joint application by Homestake and the municipalities of Deadwood and Lead for a grant and permit to construct a mine tailings/ sewage lagoon in Centennial Valley. Because of delays brought about by opposition groups and pressure by EPA, Homestake went on its own to Grizzly Gulch and built a $14 million tailings pond.

April 1978 Zero discharge to Whitewood Creek.

Thus, while Homestake appears to have a very good record in

terms of safety, community involvement and labor relations, the

fact remains that for over 100 years the company has contaminated

the environment. By the time they quit discharging to Whitewood

Creek in 1978, the best estimate is that 65 million tons of

tailings had been dumped into the Creek. Because of the long his-

tory of discharge and the huge volumes released, mine tailings

contamination can be found along a 200-mile length of the drain-

age system. In addition to a large number of other elements the

tailings pose an especially toxic hazard in the form of mercury

and arsenic. The mercury is the result of both the naturally

high mercury content of the ore and the early useage of mercury

in the extraction of the gold from the ore. Illustration of the

high amount of mercury discharged is a gold dredge operating a

few miles downstream from the mine that recovers mercury as an

economic by-product. The arsenic in the mine tailings is the

result of an arsenic-bearing mineral associated with the gold ore.

The mine tailings along Whitewood Creek and the upper

reaches of the Belle Fourche River locally are up to 15 feet

thick and have an extensive distribution on the floodplain. The

situation is complicated by the fact that in many areas the

thick mine tailings deposits are fine grained and will not sup-

port vegetation; thus they are prone to wind erosion and gain

a distribution outside of the floodplain proper (fig. 1). The

arsenic and mercury pose a two-fold threat--through direct

ingestion of the tailings and by dissolving into the ground-

water supplies.

The threat posed by direct ingestion is demonstrated by

the recent finding5 of arsenic toxicosis in two widely separated

cattle herds. In the better documented of the two cases, the

farmer ultimately lost 50 head. This lose was attributed to his

piling silage on the ground and then using a front-end loader

to pick it up for loading into the silo. Evidently when he

picked the silage up, he also scrapped up and incorporated

enough mine tailings to poison the cattle.

To date, no poisoning as the result of ground-water

contamination has been found or reported. This is extremely

fortunate because dissolved arsenic levels locally have been

found6

as high as 4700 parts per billion (ppb)--drinking water

standards are 50 ppb. In addition fish flesh in the Cheyenne

arm (200 miles downstream from the mine) have mercury levels

so high that the waters have been posted and it is recommended

that no more than 1.5 pounds of fish per week be eaten from

these waters.

At first glance, it is surprising, considering the extent

of the contamination, that the impact has been so minimal. The

minimal impact can be attributed to some unique geographic

and geologic factors. The main geographic factors being that

the area is sparsely populated and because the river valleys

are subject to heavy spring floods, nobody lives down on the

floodplain proper; thus they come into minimal contact with

the tailings. The geologic control is that the ground water

in contact with the mine tailings is of such a poor quality

it is only used for watering stock.

As of April 1978, however, the situation has become even

more complicated. While the factors above are still true,

another variable has been introduced in the form of a new

stream regimen. Prior to 1978 when tailings were being dumped

into the drainage system this heavy load led to deposition

and a buildup in the floodplain and the streams established

an equilbrium with this floodplain. Now that dumping has

ceased the streams are in a state of disequilbrium and the

energy which used to be used to carry the load of tailings

will now be expended on stream erosion and entrenchment. This

will lead to a lowering of the water table and expose the

tailings to increased leaching. In addition the stream ero-

sion will tend to weaken bridges and other structures designed

for former stream conditions.

To quickly summarize the present situation: Ilomestake has

had very good labor and community relations; however, the

tailings discharge from the company have heavily contaminated

200 miles of a drainage system. Exposure to the tailings has

been minimal and there has been little reported damage to

livestock or people; but the contamination still poses a

significant threat. Ilomestake has responded as quickly as could

be reasonably expected to correct its abuse of the environment.

At the present time Ilomestake is not under any legal

pressure to correct past actions; however, there would appear

to be a moral obligation as the past dumping represents costs

imposed on society which were reflected in past company pro-

fits. I would recommend that Ilomestake acknowledge the moral

obligation as it seems there is a true moral obligation in

this case. Secondarily, action by the company now may prevent

future legal actions.

The program I would recommend would be:

(1) The company establish an environmental fund out

of a fixed percentage of the present profits.

(2) A panel of experts be established composed of com-

pany, state, federal and local experts. This panel

would be charged with developing and defining areas

of research and a program to minimize contamination

impacts. Areas I would recommend for investigation

are:

(a) Establishment of vegetation to stop wind

erosion of overbank tailings deposit.

(b) Bank stabilization to minimize erosion

of the tailings deposits.

(c) Investigate the possibility that an accel-

erated program of gold dredging will recover

significant quantities of mercury.

(d) Research techniques of chemically stabi-

lizing the tailings deposits.

(3) Establish a Board composed of impacted local citi-

zens, company representatives as well as officials

from state and federal agencies. Heaviest repre-

sentation should be local citizens. This Board

would establish priorities for programs recommended

by the panel of experts and make expenditures from

the fund established by Homestake.

It is my belief that Homestake must undertake either the

above program or a similar program as right now there is little

public action or notice being given to the old deposits. Home-

stake came in for heavy criticism in the early 1970's, but

this faded when they corrected their actions. At this point

the contamination is more or less out of sight, out of mind.

Future problems may arise because now that the Whitewood

Creek is clear there are proposals to build housing projects

adjacent to it. If this takes place it will bring the problem

up again and unless Homestake can show it has been responsive

it will be in for extreme criticism and legal action.

REFERENCES

1. J. J. Norton and J. A. Redden. Gold and silver deposits. South Dakota Geol. Survey Bull. 16, 1975, p. 78-90.

2. Mildred Fielder. The treasure of Homestake gold. North Plains Press, Aberdeen, South Dakota, 1970, 478 p.

3. IBID

4. Anonymous. Pollution affecting water quality of the Cheyenne River System, western South Dakota. EPA report, Division of Field investigation - Denver, 89 p., Sept. 1971.

5. Martin E. Bergeland, G. R. Ruth, R. L. Stach, and R. J. Emerick. Arsenic toxicosis in cattle associated with soil and water contamination from mining operations. 19th annual proceedings of the Am. Veterinary Association, p. 311-316, 1976.

6. R. L. Stach. Arsenic in the surface and ground water of Whitewood Creek, Belle Fourche, and Cheyenne Rivers, western South Dakota (in preparation).