Minerals and Mining Program

 

History of Mining Regulation in South Dakota

 

1971 First laws regulating mining pass - regulatory program located in the Department of Agriculture's Division of Conservation.

 

1981 Governor Janklow, through an executive reorganization order, transfers mining regulatory functions from the Department of Agriculture to the Department of Environment and Natural Resources.

 

Legislative Summer Study of state mining laws.

 

1982 Legislative revision and recodification of state mining laws results in three separate chapters including SDCL 45-6B - The South Dakota Mined Land Reclamation Act, SDCL 45-6C - The South Dakota Mineral Exploration Act, and SDCL 45-6D - The South Dakota Uranium Exploration Act.

 

First mining permit for an open pit/ heap leach gold mine granted by the Board of Minerals and Environment to Wharf Resources for the Annie Creek Mine near Terry Peak.

 

Mining permit granted to Homestake for the Open Cut surface gold mining project in Lead.

 

1983 Legislative revision of the laws related to construction aggregate mining - results in a separate chapter (SDCL 45-6) designed to streamline and simplify the permitting and regulatory process for gravel pit operators. Since the adoption of this law there has been over a ten-fold increase in the level of compliance with permitting requirements.

 

1984 Homestake granted a mining permit for the Ragged Top Project - a surface gold mining project located near the rim of Spearfish Canyon near Savoy. This permit was subsequently transferred to a mining Company called Minerva Explorations, Inc. - the transfer was initially denied by the Board of Minerals and Environment but was appealed to the Supreme Court which overturned the Board's decision. Since then, this project has been of considerable controversy due to its location. No mining has been done under the permit.

 

1986 Legislative Summer Study of the social and economic impacts of surface mining and oil and gas development.

 

Two new mining permits granted to Wharf Resources by the Board of Minerals and Environment to expand the Annie Creek open pit/ heap leach surface gold mine.

 

Brohm Mining Corporation (then Gilt Edge, Inc.) granted a permit by the Board of Minerals and Environment for the second open pit/ heap leach surface gold mine in the state.

 

The Department and the US Forest Service enter into a Memorandum of Understanding to eliminate duplication of reclamation requirements and bonding for mining operations on US Forest Service administered property.

 

1987 Based on findings of the Legislative Summer Study, several laws pass the Legislature including requirements for socioeconomic impact studies for new mines, clarification of local controls over mining, revisions to reclamation bonding requirements, and specification of reclamation plan development requirements.

 

Legislature passes a law that authorized the Board of Minerals and Environment to promulgate rules governing mining.

 

Governor Mickelson declares a six-month moratorium on the issuance of new mine permits to allow staff and the Board of Minerals and Environment time to draft new rules. The Governor appointed a special 10-member task force to develop a set of draft rules to be presented to the Board as a recommendation. The task force held a series of 10 public meetings statewide to allow the public an opportunity to have input into rule development. The Board adopted 9 separate chapters of rules following a three day public hearing.

 

1988 St. Joe Gold Corporation (now LAC Minerals USA, Inc.) granted a mine permit for the Richmond Hill open pit/ heap leach surface gold mine.

 

Golden Reward Mining Company granted a permit for the Golden Reward open pit/ heap leach surface gold mine located at the base of Terry Peak near the ski area.

 

Legislature passes law specifying mine permit amendment fees, mine permit transfer requirements, and staff processing times.

 

Two statewide initiated measures on mining fail. One would have required all large scale surface mines to return mined land to approximate original contour. The other would have imposed an additional 4% tax on gross sales of precious metals produced by surface mining.

 

The Mining Program and Oil and Gas Program reorganized into a single Minerals and Mining Program within DENR.

 

1989 Legislature passes Governor Mickelson's Centennial Environmental Protection Act. Several sections deal with mining including:

 

  • A requirement that a Cumulative Environmental Evaluation be conducted of large scale precious metals surface mining in the Black Hills. A moratorium on the issuance of new mine permits is imposed during the study period.
  • A requirement that small scale mines using cyanide comply with large scale permit requirements
  • A requirement that operators of open pit surface gold mines using cyanide for extractive purposes pay a fee of two cents per pound of cyanide used to the Groundwater Research and Education Fund for a period of five years
  • A requirement for operators using cyanide for extractive purposes to post up to $500,000 in financial assurance with the Board of Minerals and Environment to be used in the event of accidental releases of cyanide

 

Legislature passes a law concerning the designation of lands as special, exceptional, critical or unique and authorizing the Board of Minerals and Environment to promulgate rules.

 

1990 The Cumulative Environmental Evaluation of Black Hills surface gold mining is completed at a cost of $250,000. All costs were paid by the mining industry.

 

Legislature passes a law requiring the Governor to appoint a seven-member task force to evaluate the Cumulative Environmental Evaluation and make recommendations to the Board of Minerals and Environment.

Special Legislative Tax Commission studies mine permit fees and determines that no increase is warranted because the industry already pays millions of dollars in severance and other taxes.

 

Statewide initiated measure fails that would have limited the total amount of surface gold mining allowed in the Black Hills to 3,100 acres.

 

The Divisions of Land and Water Quality and Air Quality and Solid Waste are reorganized into a single Division of Environmental Regulation. The Minerals and Mining Program takes on air quality functions related to mining.

 

The Board of Minerals and Environment adopts special, exceptional, critical or unique land rules after two public hearings. Several areas have since been added to the preliminary list of special and unique lands following public hearings including Spearfish Canyon Watershed, Craven Canyon in Fall River County, and Danby Park/Bugtown Gulch near Custer.

 

1991 The Cumulative Environmental Evaluation task force begins deliberations by holding several public meetings statewide. Final recommendations presented to the Board of Minerals and Environment included:

 

  • A 6,000 acre limit on the total amount of land that can be affected by large scale surface gold mining at any one time
  • A requirement that at least 500 acres of surface mining disturbed land be reclaimed by September 1, 1997 - if not, no permits would be issued
  • A requirement that an evaluation of the reclamation standards be conducted to determine their effectiveness and whether or not they need revision
  • A requirement for permit applicants to comprehensively describe critical resources potentially affected as part of the application for a mine permit
  • Requirements for post closure care and bonding for reclaimed mines
  • Implement existing requirements that require operators to post up to $500,000 in financial assurance to be used in the event of a cyanide spill
  • Establish annual reporting requirements for large scale surface gold mining and mineral exploration operations

 

Task Force and staff receive Excellence Award from EPA Region VIII.

 

1992 Legislature passes task force recommendations as law.

 

The Department discovers that the Richmond Hill gold mine is discharging acid mine drainage to the environment. The discharge impacts the trout fishery in Squaw Creek. DENR issues the company a Notice of Violation and Order. In settlement of the order, the company agrees to pay $489,000, and is required to take immediate steps to eliminate the discharge and to submit a mitigation plan in the form of a mine permit amendment.

 

A statewide initiative passes that limits new large scale surface gold mines to a maximum size of 320 acres and limits existing mines ability to expand up to 200 acres.

 

1993 Legislature passes bill to allow for the transfer of an exploration notice of intent and revises provisions related to mining without a license.

 

Legislature passes bill to revise the requirements for mining sand, gravel, limestone, pegmatite materials, gypsum, shale and iron ore.

 

Legislature passes a mining industry sponsored bill that requires the Department, in conjunction with the South Dakota School of Mines and Technology, to prepare an inventory of abandoned mines in the Black Hills.

 

The Minerals and Mining Program establishes an annual large scale gold mine audit program involving all programs in the Department that have regulatory responsibilities related to mining.

 

The Department discovers that Brohm's Gilt Edge gold mine is discharging acid mine drainage to the environment. Brohm is issued a Notice of Violation and Order requiring that they submit a mitigation plan in the form of a mine permit amendment.

 

1994 After a public hearing, the Board of Minerals and Environment approves Richmond Hill/ LAC mine permit amendment to mitigate acid mine drainage. Estimated costs exceed $10 million and the company posts a Letter of Credit in that amount to act as reclamation surety.

 

1995 Legislature passed bill to ban new surface mining permits on private land from rim to rim in Spearfish Canyon. Legislature also passed a resolution that encourages the USFS to designate Spearfish Canyon as a Scenic Byway, which would effectively ban surface mining on federal land within the Canyon.


After a public hearing, the Board of Minerals and Environment approves Brohm's mine permit amendment to mitigate acid mine drainage. Estimated costs to implement the plan exceed $8 million and the company posts financial assurance with the state to cover the costs.


The Department enters into a Memorandum of Understanding with EPA on the issue of protection from liability under Superfund while engaged in abandoned mine inventory and clean up work.


The Department issued a Notice of Violation and Order to Wharf Resources for a discharge of improperly treated cyanide solution that resulted in a fishkill in Annie Creek. Wharf agreed to pay $150,000 in settlement of the NOV.


Richmond Hill completes cap over backfilled pit impoundment designed to provide long term closure of acid generating waste rock.


Brohm Mining Corporation completes relocation/reclamation of Strawberry Creek tailings, significantly improving water quality and aquatic habitat in Bear Butte Creek watershed.


On November 23, 1995 Homestake reached a milestone by producing its 38th million ounce of gold.


1996 Legislature passed bill to place materials extracted and sold from lake dredging operations under mine licenses.


Dakota (Brohm) Mining Corporation granted a permit by the Board of Minerals and Environment to mine Anchor Hill open pit/heap leach surface gold mine project, located adjacent to existing Gilt Edge Mine. Permit was unanimously granted by the Board after hearing 3 days of testimony summarizing the detailed mine operating and reclamation plan for safely managing acid generating sulfide wastes. Anchor Hill project provides superior reclamation materials to improve upon AMD reclamation plan for Gilt Edge site permitted in 1995.


Golden Reward ceased mining operations in June, 1996 and leaching operations several months later. Golden Reward applied for and was approved for temporary cessation starting December 15, 1996. The period of temporary cessation will remain in effect until December 15, 2001 (it can be extended another 5 years), or until Golden Reward resumes operation. Golden Reward continued reclamation activities.


Richmond Hill initiated construction of caps over its leach pads.


Wharf Resources submitted an application for the Clinton Project. The application was procedurally incomplete at year's end.


In November, Lawrence County voters narrowly passed an initiated zoning ordinance that would effectively ban surface mining on 48,000 acres in the Spearfish Canyon watershed.


1997 Legislature passed bill to place the mining of pozzolan under mining licenses.


In June large scale surface gold mines surpassed the 500-acre reclamation requirement pursuant to state statute. If the 500-acre reclamation had not been met by September 1, 1997, a moratorium would have been placed on the issuance of new permits for large scale surface gold mines. As the 500-acre goal was met, in July, the Board of Minerals and Environment conducted a hearing to review the state reclamation standards for large scale surface gold mines. On July 16 and 17, the board of inspected reclamation efforts at the five major surface gold mines. On July 18, they conducted a public hearing on the effectiveness of South Dakota mine reclamation laws. At the end of the hearing the board, on an unanimous vote, found the existing South Dakota reclamation standards to be effective.


In February, Brohm is approved to mine the Southeast Langley deposit. In May, Brohm is approved to commence mining on the non-US Forest Service portion of Anchor Hill Phase II. Because of delays in completing the environmental impact statement (EIS) for the Forest Service Portions of Phase II, Brohm temporarily suspended mining in September until the EIS process is complete.


Richmond Hill completed the capping system over its leach pads.


Homestake and Brightwater reclaimed the Red Placer claim along Whitewood Creek.


Homestake proceeded with construction of next dam raise on Grizzly Gulch tailings impoundment. Homestake will utilize material from the Yates waste rock depository for dam construction, and then will reclaim the waste rock area.

 

Homestake began removal of Wasp No. 2 tailings to Grizzly Gulch impoundment and begins reclamation of Wasp site.


A federal judge struck down the Lawrence County zoning ordinance banning surface mining in Spearfish Canyon watershed that was narrowly passed as an initiated measure by Lawrence County voters in November 1996."

 

1998 Brohm Mining’s plans to mine Phase II of the Anchor Hill Project were delayed. In November 1997, the US Forest Service issued the final Environmental Impact Statement (EIS) and a Record of Decision (ROD) that would allow Brohm to proceed with the project. In early January 1998 several parties appealed the Forest Service decision. In February 1998, the Forest Service withdrew its approval of the project, citing deficiencies in the EIS. The deficiencies were corrected and a new supplemented EIS and new ROD were issued in July 1998. In September 1998, Earthlaw, on behalf of several parties, appealed the Forest Service decision. On October 29, 1998, the Forest Service denied the Earthlaw appeal. No subsequent appeals were filed in the remainder of 1998.

 

Brohm shut down its mining operation in August 1997 to wait for EIS approval. The delay in getting Forest Service approval added to Brohm Mining's on-going financial difficulties. On May 21, 1998, Dakota Mining Corporation, Brohm’s parent, notified the state that because of its on-going financial difficulties it would abandon the Gilt Edge Mine on May 29, 1998. In response, on May 29, 1998, the state filed for, and was granted, a temporary restraining order by Judge Scott Moses that prevented Brohm from abandoning the site. On June 5, 1998, Judge Warren Johnson executed a Preliminary Injunction that extended the terms of the temporary restraining order. Brohm was able to find financing to maintain the site throughout 1998. At year’s end, Brohm was pursuing financing for a spring 1999 start for Phase II of the Anchor Hill Project.

In January 1998 Homestake implemented a major restructuring of its mining operations in Lead. Homestake temporarily ceased production from its underground mine on January 26, 1998. During the shutdown, Homestake developed a new operating plan to reduce costs. On March 26, 1998, underground mining resumed, but at a significantly reduced rate. The workforce was reduced from 850 to 380 employees, and underground gold production was reduced from 400,000 ounces to between 150,000 to 180,000 ounces per year.

 

Homestake also ended mining operations in the Open Cut in 1998. After mining operations were temporarily suspended after a March 21, 1998 landslide in the pit, in early April Homestake resumed mining on a smaller scale. Mining continued in the Open Cut until mid September when the last ore was hauled out.

In November, Homestake completed the removal of tailings from the historic Wasp No. 2 Mine to the Grizzly Gulch Tailings impoundment.

 

Homestake continued adding the third raise on its Grizzly Gulch tailings impoundment dam. The project is scheduled for completion in 1999.

 

On June 18, 1998, the Board of Minerals and Environment approved Wharf Resources’ Clinton Project. The Clinton Project is a mine expansion to the east of Wharf’s current mining operations. The expansion consists of two new pits, the Portland and the Trojan, and a new waste rock facility. The project will involve 279 acres of affected land, 21.4 million tons of ore, and 55 million tons of waste rock. Wharf estimates the project will recover 679,000 ounces of gold and extend the mine life until the year 2007.

 

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