The Gold Rush Returns to California
On the outskirts of the northern California town of Grass Valley, a massive concrete silo looms over the weeds and crumbling pavement. Nearby, unseen, a mine shaft drops 3,400 feet into the earth. These are the remains of Grass Valley’s Idaho-Maryland Mine, a relic from the town’s gold mining past. Numerous mines like this one once fueled Grass Valley’s economy, and today, Gold Rush artifacts are part of the town’s character: A stamp mill, once used to break up gold-bearing rock, now guards an intersection on Main Street, and old ore carts and other rusty remnants can be spotted in parking lots and storefronts around town.
Gold still exists in the veins of the abandoned mine, and Rise Gold, the mining corporation that purchased the mine in 2017, has reason to believe that reopening it makes financial sense. When the mine shut down in 1956, it wasn’t because the gold was drying up; it was because of economic policy. The 1944 Bretton Woods Agreement had established a new international monetary system to create stability in exchange rates. As part of the effort, the price of gold was fixed at $35 per ounce. Gold mining became unprofitable in the U.S.
Today, the price of gold is no longer fixed, and prices have risen in response to the economic uncertainty wrought by Covid-19. At the start of the pandemic, the Federal Reserve lowered interest rates in an effort to stimulate the U.S. economy and encourage borrowing money. But those record-low rates decreased the returns on bonds and savings accounts, making gold a relatively more attractive business investment.
Now, with inflation rising and renewed economic uncertainty over the omicron variant of the coronavirus, demand for gold remains high, even despite some recent dips. In 2020, roughly 43 percent of gold consumed globally went towards exchange-traded funds and central banks. As prices have risen and mining technology has become more sophisticated, mines are opening and reopening in places where mining was once thought economically unfeasible.
Still, mining isn’t as simple as it used to be. The U.S. Geological Survey estimates that of the world’s known gold, roughly 63,000 tons are still in the ground, compared with roughly 206,000 tons that have already been mined. And the world’s unmined gold is generally only unmined because it’s deeper underground and thus less accessible. To obtain it, companies have to figure out what to do with huge amounts of mining waste, some of which contains heavy metals and other toxic substances.
Rise Gold has pledged to mitigate the environmental impact of its new mining operation in part by employing a technique called paste backfilling, which involves injecting a mixture of water, mine waste, and a binder (often cement) into mining tunnels. The practice helps provide structural support and reduce the amount of aboveground mine waste. There is some science to support the benefits of this approach, but it’s only a partial solution, and there are lingering uncertainties about its long-term impact. While Rise Gold reports that there is strong support for the project throughout Nevada County, where Grass Valley is located, some local residents remain skeptical. Among other things, they are concerned that the new mining operation will not be able to adequately contain its waste.
Given these challenges, some economists are asking whether it makes sense to mine gold when the precious mineral is merely destined for a bank vault. “The cost of mining is high,” says financial economist Dirk Baur. Much of the value of gold is tied up in the cost of just digging it out of the ground, he says. “There’s some profit for the mining company, but a big, big chunk is just an expense.”
Over the past couple of decades, proposals to develop or expand gold mining facilities have popped up across Europe and North America. In Northern Ireland, Dalradian Gold plans to open a mine in the Sperrin Mountains. In Newfoundland, Marathon Gold is slated to open an open-pit mine that the company says will be the largest gold mining operation in Atlantic Canada. In the United States, which, as of 2020, had the fourth-largest gold mine reserves in the world, mining operations have expanded in northwestern Arizona in recent years, and there are plans to reopen a mine in central Idaho. Many companies seeking to find new riches in old places face community pushback similar to what is happening in Grass Valley.
Gold mine opponents have good reason to be wary. Mining creates a lot of waste, including the rock that doesn’t contain enough gold to extract (called “waste rock”) and also the slurry left over after gold has been extracted from ore (called “tailings”). Both waste rock and tailings can contain toxic substances that threaten to pollute groundwater and surface waters if not properly mitigated.
Grass Valley has been dealing with the fallout of Gold Rush-era mining for decades. Arsenic, which occurs naturally in the gold deposits of the Sierra Nevada foothills, remains an ongoing problem in the area. Old tailings can still leach heavy metals decades after mining operations have ceased. In Grass Valley, the Central Valley Regional Water Quality Control Board documented high concentrations of arsenic in a pile of tailings nicknamed “the Red Dirt Pile.” In 2020, high concentrations of lead, mercury, and arsenic were found in samples taken from a former mine waste disposal area that now supports approximately 4.5 acres of wetland habitat. That disposal area, known as the Centennial site, is owned by a subsidiary of Rise Gold called Rise Grass Valley.
The Centennial site was polluted enough to warrant consideration for listing as a federal Superfund site, but Rise Gold avoided federal regulation by agreeing to undertake its own cleanup. Ralph Silberstein, president of the Community Environmental Advocates Foundation, a local environmental organization, says his group welcomes Rise Gold’s plan to address the hazardous substances that currently mar the area. But, he says, the group is troubled by what might come next. According to Rise Grass Valley’s Remedial Action Plan, the company may take the freshly cleaned-up site and use it for dumping waste from “future mining operations,” though they’ll first have to get permission from the state.
Rise Gold’s plans to minimize the mine’s impact are outlined in a draft environmental report, which Nevada County released this month, and which the company describes as “favorable.” In an interview with Undark, Rise Gold’s CEO, Ben Mossman, defended his company’s plan to use the Centennial site for some of the waste produced in conjunction with the reopening of Grass Valley’s Idaho-Maryland Mine. This particular mine is unique, said Mossman, because the company found “very little metal content” in the areas where it plans to dig. Because the waste will largely consist of non-toxic materials such as sand and rock, he says, “there’s no geochemical concerns to the environment or human health” — a claim that activists question.
Even when rock has little or no heavy metals, disposing of it can be a significant challenge. According to Rise Gold’s website, the Idaho-Maryland mining operation historically had to remove a ton of rock for every half ounce of gold it recovered. “These mining companies come along and they want us to not notice that they’re going to have a huge amount of mine waste rock,” says Elizabeth Martin, who recently retired as CEO of the Sierra Fund, a local conservation group based in nearby Nevada City. Rise Gold’s draft environmental impact report says the plan will result in approximately 182,500 tons of material produced per year that will need to be transported then used as engineered fill. By comparison, a large dump truck can carry about 14 tons. Multiply that by more than 10,000, and the visual is “beyond most people’s imagination,” says Martin.
Rise Gold plans to reduce its aboveground footprint at the Grass Valley mine with cemented paste backfill, which was first used in the 1970s as a way to recycle mine materials and help stabilize the underground workings. In essence, the mine becomes safer and the waste goes back to where it came from.
Paste backfilling is widely regarded as a more environmentally friendly way to dispose of mine waste. There is evidence that locking tailings up in cement decreases their permeability and stabilizes any heavy metals within them. There are still questions, though, about whether or not arsenic and heavy metals will stay put in the paste backfill material over the long term. The leaching behavior of arsenic depends on a lot of different factors, including the binder used in the backfill and the chemical content of the tailings. The biggest unknown is what happens in the future, when the mine closes and the pumps shut down, which will let groundwater flow into the backfilled tunnels. Some studies have noted that even low levels of leaching could continue for years, potentially contaminating drinking water or nearby rivers and streams.
“These mining companies come along and they want us to not notice that they’re going to have a huge amount of mine waste rock,” says Martin.
Heavy metal leaching is high on the list of concerns in Grass Valley. Rise Gold promises their operations will be clean, but even so, the company’s hydrology report does note arsenic leaching from some test samples. The leaching tests, meant to simulate what might happen to a waste rock pile when it rains, found that arsenic leached at concentrations 17 times greater than the water quality standards from samples of the mineral type serpentinite. Rise says that’s not a concern since there will be very little serpentinite in the waste rock. Its report also notes that tests on tailings indicated arsenic leaching, but only at concentrations that would not exceed regulatory limits.
Underground mining operations also intersect with the water table, which means the existing tunnels have to be dewatered, and the water that’s pumped out of the tunnels has to be treated before it’s released aboveground. “The water coming from these mines that they’re dewatering is full of arsenic, manganese, iron, and other heavy metals,” says biologist Josie Crawford, executive director of the Wolf Creek Community Alliance, another local group that opposes the mine. “It will be treated, but it needs to be treated forever.”
The water also has to go somewhere after it’s been treated. Rise Gold plans to flush it down nearby South Fork Wolf Creek, a move that Crawford fears could cause damage to the riparian habitat. “It’s a trout stream, so it’s sensitive,” she says. “If the dewatering starts scouring the creek, they could lose a lot of those invertebrates and ruin the trout habitat.”
Conservationists and community opposition groups often see gold mining as a battle between nature and greed, and question whether the pursuit of gold is really worth so much environmental destruction. So does Baur, the financial economist, who says it makes sense from both an environmental and economic perspective to just not mine for gold at all. Much of the gold that already exists above ground, he says, is held by banks and investment companies. Investors can buy shares of gold they’ve never even seen. Baur says they might as well just buy shares of gold that companies promise to leave in the ground. “You buy something that doesn’t disrupt the land as much,” he says, “and you don’t have all the negative effects of the actual gold mining.”
Baur recently explored this idea with a couple of his colleagues at the University of Western Australia Business School. In a 2021 paper, they proposed leaving unmined gold in the ground and letting “nature act as a natural vault and custodian legally protected by gold firms and the government.” In this scenario, investors could buy stock in gold exploration companies that have identified underground gold but have no plans to mine it. This would give investors an alternative to purchasing shares of the aboveground gold that currently sits in bank vaults around the globe.
Would the unmined gold, which the paper calls “green gold,” actually earn money for its investors? Baur and his coauthors considered the costs of gold exploration and gold mining, and the uncertainty of the quality and amount of gold that might exist in any given underground location. They then ran an empirical analysis, and concluded that unmined gold can still be a valuable investment.
Baur says his paper has, unsurprisingly, received negative feedback from the gold industry. “They hate the idea, of course,” he says. “It’s the end of their business, essentially.” He thinks investors, though, may be more willing to entertain the idea, especially those who are looking for green investments. “But there’s also a lot of greenwashing,” he says, adding that investors may say they want to invest green, but may not be as willing to try new ideas when the time comes.
These questions will take time to sort out. In the meantime, the Grass Valley mining project still needs to overcome public opposition and significant financial hurdles. Opening a mine is expensive. Before Rise Gold bought the mineral rights in 2017, EmGold Mining Corporation had plans to reopen the mine. They spent $1 million just on consultants, according to one estimate, and the project never got past the preliminary stages. Locals like Silberstein hope Rise Gold’s plans will meet a similar fate.
“They’re talking about bringing gold up from 3,000 feet below the surface,” he says, “which means restoring a badly damaged, probably collapsed-in gold mine to get less than an ounce per ton of gold out.”
“It doesn’t make sense,” he adds. “It’s not a smart thing to do if we want to have a sustainable, livable world.”
Becki Robins lives in California’s gold country and writes about science and nature, history, and travel. Her work has appeared in Earth Island Journal, Lonely Planet, and on the YouTube series SciShow.
Article fails to mention that the US Treasury still values gold at $42.20 per ounce, not the spot market price (look up). And there is much more to this story. Gold/silver precious metals are the *only* commodities allowed by law to have their prices fixed, every trading day. The true value of physical gold in market dollar terms would be far higher if the price of gold were not manipulated by the LBMA, CME, BIS and Fed, who fix the price. (look up) Overall point is that the good people of GV probably prefer to speculate in crypto anyway, so of course they will view physical gold negatively. But personally I’m glad they do — and want to prevent this mine — since that will drive gold prices higher, where they should be. regards
Hah… price of gold began rising after the financial collapse of the US in 2008-2009….! not due to covid.
pretty well written in all reality more so that the last comments about the collapsed tunnels and the grade of gold hoist situation and not making sense. California has a lot of mines that closed the same way. in the sutter creek jackson there are 5. so That person doesn’t know anything about hard rock mining. the Mother lode is very hard rock and its in the same shape as when the pulled out, I worked in the mines 40 years both south of GV in 79 ( Blaziing star at West point) and in Sierra County in 83 ( 16 to 1) they would have loved to have re opened a mine there in those days. they killed the timber industry around GV then the bay area moved in , All the old timers that made a living from mining and logging are now long gone , all you have left is the consumers of such thing and they dont want anything that looks like work. . Now going back I always love those who say mining destroyed this or that but yet those same people get in their car and drive to starbucks for a coffee all the while living in the same towns and the same streets miners walked and worked. it didnt kill either one. hard worked killed the first and starbucks will kill the second.
I’ve always wanted to find gold, but not 3,000 ft under the ground. That’s just crazy. I’m just your average person but you keep taking all the minerals and such out of the earth and it’s there for a reason. Pretty soon the earth wont be able to live on.
The last lines of the article read:
They’re talking about bringing gold up from 3,000 feet below the surface,” he says, “which means restoring a badly damaged, probably collapsed-in gold mine to get less than an ounce per ton of gold out.” [should read “ounce per ton of gold ore.”]
“It doesn’t make sense,” he adds. “It’s not a smart thing to do if we want to have a sustainable, livable world.”
An ounce of gold per ton of ore qualifies as astoundingly rich. If that is the true grade at this mine, it would justify the economics of reopening the mine. Most gold mines consider 0.07 ounces per ton to be very good. Many mines operate on much lower grade than that.
That is not a surprise to me there’s a lot of tailing pails that were left in the 40,s that would cost too much to recover at the time.
These activist are mixing up facts as usual. Just search for small scale mining or watch gold rush, to get better understanding of the different processes.
1 Large gold is got by breaking rock & catching the heavy gold in something similar to a filter. They do the same with computer gold or just use a shaker table.
2 Once large gold is removed there are still small flakes in the tailings, which is where in the past & many foreign countries, Mercury was used & that mixture is called Slurry.
However the miners plan on putting the tailings back in the mine after mixing it with concret instead of mixing it with mercury.
Maybe these steps were done during the original gold rush & there is still a mess from that. It would not surprise me if activist blame 100 year old mess on modern company just to stop it. Also Nothing stops locals from doing these steps for themselves so by leaving the gold in the ground you only tempt the locals to make a quick buck.
3 Once we have the big gold, its still not pure gold & further processing is Not done at the mine site. This is were chemicals come in. Mercury is actually reusable if handled properly, but regulations often result in harsher acid chemicals (like aqua rega) that are not re-usable. There is way to use lead, copper & sulfuric acid to recover gold plating. An easier way is to melt the gold in furnace & then dump it into an upside down pyramid & then just break off the point.
Watching from Disney channel
I wonder if the opponents of the gold mining use products with metals mined in other locations? It is a terrible double-standard to use mined materials that may have polluted someone else’s landscape and not be willing to at least talk about how to minimize or mitigate the impact of local mining. This is another example of the arrogance of Americans. The response should not be NIMBY, but rather an agreement on the procedures implemented to ameliorate the impact.
I read the article, but I don’t see any conclusions. Will Rise Gold keep the gold in the ground? Will shareholders be made aware when Rise Gold decides to mine? Also, what of the Indigenous peoples? Is this mine on Treaty Lands? If it is and they start mining, what will happen to these people when their water is poisoned. Will Rise Gold expand into sacred sites? And, what is the name of the Grass Valley conserevation group? I want to look at their studies before I decide to buy stock. Thank you so much, in advance.
I thought the article was well written and explains the factors surrounding the issue. While I understand the residents concern, the mining industry is heavily regulated and regulators are eager to regulate, especially in California.
Nevada County faces a much bigger threat: wildfire. The forests are so overgrown, the area is more vulnerable than Paradise, CA was before the Camp Fire. It’s not a question of IF, it’s a question of WHEN.
I’m not trying to dismiss people’s concerns over mining. I really love the Grass Valley / Nevada City area. I am way more concerned about it going up in smoke this Summer than I am about the impact mining might have years down the road.
I would love to see a groundswell movement over thinning out the forests.
As a fellow Gold country resident I share in the concern of reopening gold mines in this area. Outside the town of Sutter Creek they want to reopen a mine but townspeople are concerned mostly about the noise & shaking due to blasting. Further, the use of land is vastly different than back in the mining heyday. People have moved into these areas to get away from big city life and enjoy a peaceful quiet life in beautiful natural surroundings. During the gold rush the attitude was only that the land was only useful for mining, with little/no thought to what it would do to the land, rivers, etc. The gold rush ended when revenue from farming exceeded the revenue from mining.
Buyers and sellers in a locally led demand driven marketplace generated growth and development with a high potential for innovation.
Gold remains an amazing lure, even sequestered stocks can bring in business. When the foolhardy flood in and washout what remains.
Development opportunities paid for by funding agreements supported by government, nonprofit and entrepreneurial enterprise.
The old’ in ground mines would make excellent landfill and storage sites for the waste management industry. While the world offsets carbon emissions by planting trees at a rate lower than those destroyed for deforestation.
Emgold Mining Corporation?! Hardy. Ha. Can’t beat the classic go to name.
Well here is the thing. Mining today requires EPA oversight for one. Two, all the so called waste is bonded by the amount of disturbing of the ground. The reason for this is so that the company or BLM one of the two has to complete reclamation. That means clean up of the site when mining is completed. These bonds are not cheap and are usually in the millions. So, when mining is completed the site must be returned to it’s natural state. Including the replanting of vegetation. Also there can be absolutely no contamination to local water ways. Therefore the residents of Grass Valley are uneducated and are typical California morons who think they know everything and are full of fears that are unfounded. Maybe these idiots should try educating themselves before they react to things they obviously know NOTHING about. Maybe they might instead turn to questioning why their State is in financial dissaray and then have to realize they are the primary cause.
Actually most residents are against the mine. Not sure who is in favor other than the very few people that would benefit(financially). Strange that the author is quoting secondary issues while barely mentioning the primary issues- poisoned wells and groundwater, vastly reduced ground water levels, as well as degradation of vital water courses. Obviously nobody wants to see the trout suffer, but seriously? That is at the bottom of the very long list of detriments that will inevitably come from this mine re-opening. Nobody wants to sit behind a never ending line of rock trucks endlessly transporting waste rock either, but i’m not going to pretend that is a serious issue over children developing birth defects from mercury and arsenic in their well water… or harmed from exposure to these elements playing in their backyard creek. There are so many unknowns, and these variables probably will equal disaster.
Look at Mossmans’ history of running mines. He is still dealing with the lawsuits from the super-fund site he left in his home country of Canada. One thing he isn’t doing is taking care of it. I guess we live in a society that favors short term wealth and corruption over long term wealth(having water) and the health of our children. Let’s not learn from history or our mistakes. Don’t even give the century old arsenic settling ponds a second glance.
Jesse – thanks for being a voice of reason here. I live in Grass Valley & I believe that reopening the mine will do nothing to benefit the average citizen of Grass Valley & the only opinions that matter in this situation are those of the people who live here & who’ll have to deal with the bad water, bad air, noise and increased traffic. It’s going to ruin our quality of life and line the pockets of a few who will take their money and leave us with another superfund site. It’s a bad idea that I fervently hope gets shut down ASAP.
I’m more concerned with Rise Gold depleting all of our water Wells and forests. We all use the same water table. Plus noise, pollution and traffic. No Mine!!!
There is so much misinformation is this comment, I trust others will not take any of it as fact. The main push back on this mine is the result of the community actually educating themselves to the risks. Water is a very precious commodity, especially in California. Once the water table below ground is contaminated there is no way for it to be “returned to it’s natural state.” There are countless other concerns of how this operation would impact quality of life in a small town: constant truck traffic, noise for up to 16 hours a day, resulting pollution, just to name a few.
The most important fact here, overlooked by the author, is the history of the people behind this venture. Ben Mossman, the CEO of Rise Gold, is still facing criminal charges in Canada for one of his previous mining operations. That operation lasted barely six months before illegally releasing contaminated mine effluent into fish-bearing bodies of water. The mining operation declared bankruptcy later that year. Shortly after waste from the operation had been found in the woods and wetlands surrounding it. The mine closed and the mess was left for the people of British Columbia to address. Needless to say, most of the Grass Valley residents are opposed to Mossman being given the opportunity for a repeat performance in their area. The risks are just too great.
Excuse me but I am a Californian and proud of it. Now I do not know anything about mining but I do know this. You can not return the area back to the way it was when you have taken something from it, that is impossible , so I dont understand what it is your trying to put out there. No matter how you look at it , the bottom line is they are taking stuff out of the earth that belongs there!! I mean it’s there for a reason and if it was meant to come out, then it would be like a volcano or something!! Just like how that Fracking crap is, same thing. They are ruining the earth.
Excuse me but I am a Californian and proud of it. Now I do not know anything about mining but I do know this. You can not return the area back to the way it was when you have taken something from it, that is impossible