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I think we should step back and take a deep breath before getting all excited about the Haile Gold Mine.
The process of mining is invasive, extractive and destructive, and the mine is not going to yield much for the community when compared to the benefits others will obtain.
According to a financial report on April 28, the Canadian company Romarco Minerals Inc. is excited about Haile Gold Mine yields of “11.9 grams per ton,” as in for every ton of rock blown up, extracted, ground up and slurried with cyanide, they will get less than half an ounce of gold, and that ton of rock is at least 1,500 feet under ground.
Using their numbers, to extract the 2.2 million ounces, they expect to dig up more than 4 million tons of rock. Where does one put the equivalent of 2 million cars worth of slurried rock?
Gold does not regrow. By the company’s own admission, the mine has a lifespan of about 20 years. This is the very definition of “unsustainable.”
In the 20 years, the 300 mine employees will have children, buy cars and build houses, but then wonder what happened and who is going to help them when the gold runs out. And it will run out.
The stockholders of Romarco Minerals will have removed the value from the mine, and that is a lot of money, but the community will be left with unemployment and $150 million worth of derelict equipment before those children have grown up or the houses are paid off. It is far better to employ 100 people and have the mine last three times longer.
Even better would be an employee-owned, locally managed company doing the mining, recirculating the money within the local economy.
How much money are we talking about? If Romarco Minerals extracts 2 million ounces, and the average market value is $1,000 per ounce, they will obtain about $2 billion. If Romarco Minerals employs 300 people for the full 20 years of the mine, at an average salary of $50,000, they will pay out $300 million, or 15 percent of the total value of the mine.
Salaries may rise over the 20 years, but so will the price of gold, and lately that has been rising a lot faster than wages.
Including the cost of building the mining equipment that will be abandoned when the mine is dry, Romarco Minerals will pay about $500 million, or 25 percent of the mine’s value, to extract that $2 billion in gold. We should not be so excited about 75 percent of the value of the gold leaving the community.
We see the effects of bad decisions everywhere, from trillion-dollar corporate bailouts to billion-dollar oil spill cleanups.
While we need jobs, let’s not make bad decisions in obtaining those jobs. I believe we would have a completely different kind of excitement about these new jobs if the headlines read “Foreign mining company to remove $2 billion in gold from state.”