Gold Mine Near Yellowstone National Park (YELLOW Case)





     Case Number:   155

     Case Mnemonic: YELLOW

     Case Name:     Yellowstone Goldmine


1.  The Issue

     A Canadian mining conglomerate has proposed to build a
gold mine 2.5 miles outside of Yellowstone National Park in
Wyoming.  The company, Crown Butte Mines Inc., a subsidiary of the
giant Canadian mining firm  Noranda Inc., has caused a great deal
of controversy with this proposed mine.  After a summer of growing
conflict, President Bill Clinton placed a moratorium on mining
around Yellowstone.  Unfortunately, this will not prevent the
opening of what Crown Butte calls the New World mine, only its
expansion.  So as autumn continues, the United States and Canada
await the release of the U.S. Government prepared environmental
impact statement.

2.   Description

     One of the most appealing aspects of the United States is
the beauty and serenity of its national parks.  The crown jewel of
the U.S. National park system is Yellowstone National Park situated
in northern Wyoming.  The park is situated in a former mining
region, active during the later half of the nineteenth century. 
Now, almost a century later the area is once again the interest of
miners.

     Crown Butte Mines Inc., a subsidiary of Canadian mining giant
Noranda Inc., is interested in establishing a gold mine in the
Henderson Mountain region of Wyoming.  Crown Butte, believes that
it can extract over 8 million tones of ore from the New World
Mine, as it will be known, over a 15 year period.  There is
believed to be 1.5 million ounces of gold worth approximately $600
million.  Noranda has already invested $35 million in exploration
of the area.(Brudin 1994, 1.)  

     The mine, at an elevation of 9000 feet, is situated between
Yellowstone, to the south, and Absaska Beartooth wilderness, to
the north in Montana. It is at the head water of 3 streams 2.5
miles from the park:  Fisher Creek which drains into Clarks fork
of the Yellowstone River (and has been declared by Congress as one
of the most endangered rivers in America);  Daisy Creek which
leads into the Stillwater River that flows around the park; and,
finally, Miller Soda Butte Creek which flows directly into the
Yellowstone trout streams.(National Parks July 1994, 5.)   
 

     Crown Butte purchased the mine's 27 acres of land from the
U.S. Government for $135.  The government, according to the Mining
Law of 1872, allows land to be purchased for $5.00 per acre.  The
law, ironically brought into existence the same year Yellowstone
was designated a national park, was created to encourage
settlement of the West.  

     From the very beginning of Noranda's feasibility studies
there has been controversy over the mine.  Many people fear that
the mine will severely disrupt the peace and tranquility of the
locale around Yellowstone.   In addition, there are complaints
pertaining to the Mining Law of 1872.  The problem is that it
seems anomalous that land can still be purchased for such low
prices, especially when the the customer is a foreign corporation. 
Another criticsm of the law is that it does not require royalties
to be paid to the United States.(Brundin 1995, 1.)

     The greatest dispute however, concerns the potential adverse
effects to the environment from the mine.  For one thing,
Yellowstone is the home to many wildlife, including federally
protected Grizzly Bears, Bald Eagles, Bighorn Sheep, Elk, and a
number of other smaller animals and fish.(National Parks
July 1995, 7.) As already stated, the mine will be at the headwater
of 3 streams that feed into or near Yellowstone.  As such, many of
the dangerous byproducts could likely affect the park's
biodiversity.  The byproducts stem from the mined ore.  This ore
contains sulfur compounds (Pyrite-known as 'fools gold') which
turns acidic when it comes in contact with oxygen.(Brundin 1995,
1.)  See Bolivia case.  

     Crown Butte has countered these arguments stating that it
will be one of the safest and revolutionary mines in the world.  
It will build a $20 million waste treatment plant, known as a
tailings pool, built to treat the runoff of sulfur based ore.  The
tailings pool will be a 77 acre site, 10 stories deep lined with
clay and plastic then filled with water.  The pool will be able to
hold 5.5 million tones of poisonous ore.  The clay, plastic, and
water will prevent the ore from coming in contact with oxygen thus
preventing it from turning acidic.(Brundin 1995, 1.)   Also, the
mine-shafts at New World will be refilled with some of the ore to
prevent the need of over-filling the tailings pool.  In addition,
There are plans to clean up the contaminated mines created during
the 19th century. Finally, when the 15 year project has been
completed the entire area will be revegetated by Crown
Butte.(Greenwire 1995, 5.)    

     The critics of the mine, however, do not feel very secure
with  Crown Butte's plans.  For one thing, the tailing pool is
based on a new, untested technology.  Also, the tailings pool
itself, and the mine in general, is in an area which traditionally
experiences extreme weather conditions including, severe snow
falls, avalanches,  and seasonal flooding.  In addition, the
region is historically prone to earthquakes.  So, critics say, no
matter how good the pool looks in theory it seems very likely that
natural disaster could destroy the tailings pool.  Finally, the
pool will be in place for what all intents and purposes is the
rest of time, so seepage of the ore filled water could create an
environmental hazard decades or even centuries after the mine has
been emptied of its gold.(Brundin 1995, 1.) 

     Over the summer of 1995, the conflict between Crown Butte,
its critics, and the U.S. Government intensified.  Many private
interest groups and environmental groups have filled lawsuits
against Crown Butte in hopes of stalling the opening of the mine. 
Crown Butte president, Joseph Baylis, has also accused Yellowstone
Superintendent Mike Finley and various members of the Department
of the Interior of attempting to derail the environmental impact
study (EIS) being conducted to ensure the mine will be in
accordance with the National Environmental Protection Act (NEPA.) 
   
The EIS is being carried out by the U.S. Forest Service and the
Montana Department of Environmental Quality.  Finley and 14
conservation groups requested the World Heritage Committee to
assess the impact of the mine.  Heritage is a branch of the United
Nations which sponsored an international convention ratified by
the U.S. and 136 other countries that identifies natural and
cultural areas within a nation that have "outstanding universal
value" to mankind.  Yellowstone National Park was so named in
1978.(Metals Week 4 September 1995, 27.)  Heritage has
stated it will tour the area in late fall of 1995.( PR Newswire
Association, 26 August 1995 1.)

     The U.S. National Mining Association has written to President
Bill Clinton protesting the actions of Finley and Assistant
Secretary of the Interior of prejudicing the EIS by stating
predetermined opinions about the mine's safety.  The Association
has also stated their anger over the future tour by the Heritage
Committee, stating that it is an attempt to  circumvent U.S.
Law.(Metal Week 4 September 1995, 28.)

     In the latter days of the summer, while President Clinton was
vacationing in Wyoming, he toured the area of the proposed
mine.  After meeting with and hearing from environmental groups and
touring the region, President Clinton ordered a mandatory 2 year
moratorium on the mining of 4500 acres of federally owned land on
the perimeter of Yellowstone.(PR Newswire Association 26
August 1995, 1.) These executive actions were taken in light of the
fact that attempts to change the Mining Law of 1872 have stalled in
Congress.(Schmitt 1995, 4.)

     Days before the moratorium was issued, Crown Butte, aware of
the pending executive action, staked 38 new claims for land around
the original mine.  These new claims encompassed 185.6 acres of
land.  Environmental groups say that it is an act of arrogance by
the mine, that it acted only to get more land at the last minute. 
Crown butte responded that it was acting within its rights when it
put forth the new claims.(Allen 1995, 1.) The moratorium will not
affect the original or newly staked land by Crown Butte because
the moratorium was issued after their recording in court, however,
it will forestall any planned expansion of the mine.(Allen 1995,
1.)   As of 26 October 1995, the government, environmental groups
and Crown Butte were still awaiting the release of the EIS. 

3.  Key Words

See BRAGOLD Case
See VENGOLD Case


(1) Mining

(2) Gold

(3) Yellowstone

4.  Draft Author

Michael Goulet

Legal Cluster

5.  Discourse and Status: DISagreement and INPROG



6.  Forum and Scope: USA and BILAT



7.  Decision Breadth: 2 (USA and Canada) 



8.  Legal Standing: Law

Geographic Filters

9.  Geography

Continental Domain: North America

Geographic Site: Western North America

Geographic Impact: USA

10. Sub-National Factors: No

11.  Type of Habitat: COOL

Trade Filters

12.  Type of Measure: REGBAN

13.  Direct vs. Indirect Impacts: IND

14.  Relation of Measure to Impact

a.  Directly Related to Product: YES-Mine

b.  Indirectly Related to Product: NO

c.  Not Related to Product: NO

d.  Related to Process: NAPP

15.  Trade Product Responsibility

Product Type: Gold 

16.  Economic Data

Industry Output ($): Relative to the price of gold which was
$384.20 per once as of 24 October 1995. 

Employment: Varies


17.  Degree of Competitive Impact

Cost ($): Low

Coverage (%): Low

Price Effect (%): Low

Competitive Effect (%): Low

18.  Industry Sector: MINE

19.  Exporters and Importers: USA and Many



Environmental Cluster

20.  Environmental Problem Type

Environmental Problem Type: POLL
sulfur based pollution

21.  Species Information

Name and Number of Species: Grizzly Bears, Bald Eagles, Bighorn
Sheep, Moose, Elk, and a wide variety of water life 

Species and Genera:

22.  Impact and Effect

Impact: High

Effect: Structure and Scale

23.  Urgency and Lifetime

Urgency: Depends on size of potential contamination and if the
contamination is in bodies of water or on land.  Contamination of
water would likely affect fish faster than animals.

Lifetime of Species: Varies

24.  Substitutes

Substitute: SYNTH and LIKE

Other Factors

25.  Culture

Culture: No

26.  Human Rights

Human Rights: No

27.  Trans-Boundary Rights

Trans-Border: Yes - Conservation groups and government
officials angered that Canadian firms do not have to pay royalties
for the potential mined gold.    

28.  Relevant literature.  

Anonymous.  "Fool's Gold: A Proposed Mine Near Yellowstone's North 
   
     Eastern Corner Threatens the Precious Resources of America's 
   
     Oldest National Park." National Parks, July 1994.


Anonymous.  "Mining Group Approaches Clinton Over Crown Butte     
     Mine." Metals Week, 4 September 1995.


Allen, Vicki.  "Company File Mine Claim Near Yellowstone Park." 
     Reuters North American Wire, 5 September 1995.


Brundin, Jennifer.  "Canadian 'Mine From Hell' Runs into U.S.     
     Opposition." Toronto Star, DATE


Greenwire Press Service.  "Mining: Enviro Study Coming on Mine    

     Near Yellowstone." Greenwire, 24 May 1995.


Milstein, Michael.  "Mine Chief: Officials Don't Play Fair." 
     Billings Gazette, 25 August 1995.


PR News Services.  "President Clinton Orders Moratorium on     
     Expansion of Controversial New World Mine." PR Newswire   
 
     Association, Inc., 26 August 1995.


Schmitt, Bill.  "Babbitt Takes Symbolic Swipe at 1872 Mining Law."

     American Metals Market, 7 September 1995.



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