SALMON, Idaho -- On a remote, forested plateau deep inside the Salmon-Challis National Forest, a Canadian mining firm is hoping to revive domestic production of cobalt, a mineral deemed crucial to post-World War II national security but whose production has since virtually disappeared from American soil.
By this time next year, the Idaho Cobalt Project plans to unearth about 800 tons of ore a day from beneath these rugged mountains about 40 miles west of Salmon to be used in the production of hybrid vehicle batteries and industrial products ranging from jet engines to prosthetic hips.
But unlike the scores of miners who rushed to this state in the 19th century in search of precious minerals like gold, silver and molybdenum -- leaving behind a toxic legacy of polluted streams and metal-laden tailings -- the developers of this mine say their project will leave the Salmon River watershed in better condition than they found it.
"The wastewater will be better than a bottle of San Pellegrino," Mari-Ann Green, CEO of Formation Capital Corp., said in an interview.
The firm plans to treat its wastewater -- up to 150 gallons per minute -- to drinking water standards or better and has multiple post-mining plans to prevent the drainage of acid runoff or heavy metals into nearby Bucktail Creek. Tailings, meanwhile, will be dried and stacked high atop a plateau and lined and capped with rubber and clay to prevent exposure to rainwater that could carry contaminants into surrounding valleys.
"We're kayakers, we fish in the river, we camp in the woods," said Green, who noted the firm is negotiating a multimillion-dollar bonding agreement with the Forest Service to ensure protections are upheld. "That's our lifestyle. The last thing we want to do is spoil such a pristine resource."
That promise, however, initially rang hollow for environmentalists who pointed to the mining industry's environmental record in the West: hundreds of thousands of abandoned mines that have degraded up to 40 percent of the region's headwater streams, according to U.S. EPA.
Opponents appealed the mine's first federal permits in 2008, demanding the project meet a more stringent arsenic standard, comply with a more rigorous copper and mercury reduction plan, and conduct more water quality monitoring.
By the end of 2008, Formation Capital had modified its operating plan to address those concerns, and in a rare move, the Idaho Conservation League, Boulder-White Clouds Council and Earthworks agreed not to challenge the mine's subsequent federal permits.
Partnering with ICL and other conservation groups, including Trout Unlimited and the Nature Conservancy, Formation last year donated more than $150,000 for projects to improve the Salmon River watershed, a program it said it intends to fund annually throughout the life of the mine.
"From a conservation perspective, we were able to find a net conservation benefit by working with the mining company instead of opposing them," said John Robison, public lands director for ICL. "We feel it raises the bar on mining in Idaho and really the West in general."
The $138 million project cleared its final federal permitting hurdle last December and workers have cleared timber off the site in preparation for construction of a water treatment plant, waste rock facility, and mill.
Based on current cobalt prices, the mine stands to generate roughly $34 million a year over the project's 10-year lifetime, creating nearly 150 jobs for Salmon and the surrounding communities.
Filling a void
The Idaho Cobalt Project, one of hundreds of mining proposals in various stages of exploration, permitting or production in the West, would be the first new U.S. cobalt mine in decades.
Demand for mineral surged in the late 1990s, as the material became a critical component of lithium-ion batteries used in small electronics and the nickel metal hydride batteries of the Toyota Prius.
One-fourth of the world's cobalt supply goes into batteries, with much of the rest going into superalloys for use in jet engines and natural gas-powered turbines. A small portion is used in the catalysts that help remove sulfur from petroleum fuel.
Combined with the rare earth samarium, cobalt is also a critical component in permanent magnets used in battlefield tank navigation systems.
Crucially, the United States consumes 60 percent of the world's high-purity cobalt but produces virtually none of the mineral at home. Forty percent of world supply comes from Africa, with a substantial remainder coming from Russia, Canada and Australia, according to the U.S. Geological Survey.
While cobalt is not expected to be used extensively in the next wave of hybrid-electric vehicle batteries, a report this summer by the European Union listed cobalt among 14 "critical" raw materials due to its risks for supply disruptions and its integral role in Western economies.
"It's a precarious position for the U.S. to be in," said Green.
At full production, the Idaho Cobalt Project will produce roughly 1,500 tons annually of high-purity cobalt over at least a decade, or roughly 3.3 percent of world cobalt supply. At current consumption rates, the mine's output should meet roughly 15 percent of North American demand.
Project officials in May announced they had raised $10 million toward construction of the mine. Additionally, about $15 million of heavy equipment has been purchased and is warehoused in Salmon.
Green said the firm would be exploring a range of options to raise additional capital, including tax-free bonds from the American Recovery and Reinvestment Act of 2009 that could be issued by the Lemhi County Industrial Development Corp.
Drilling samples taken this month will also help determine whether the deposit contains economically mineable concentrations of heavy rare earth elements known to occur on the property. Such minerals are considered integral to a host of low-carbon and energy efficient technologies, but current production is centered almost solely in China (Land Letter, July 22).
'An industrial sacrifice zone'
While the Idaho Cobalt Project represents a renewed effort to retrieve "green minerals" from domestic sources, it is but one of thousands of mining claims being made on Idaho public lands, where the hardrock mining industry has struggled to overcome a history of poor environmental management.
The Bureau of Land Management, which controls one-fourth of the state's land mass, has seen new mining claims rise by an average of 25 percent annually since 2001, growing to more than 18,000 claims in 2010.
New proposals include a draft plan to drill hundreds of exploratory holes for molybdenum in the Boise National Forest in southwest Idaho and a proposal last month to expand the Thompson Creek molybdenum mine near Challis.
Such projects promise new jobs and a steady tax base for rural Idaho communities, but the industry's historical operations have made some wary even of 21st century mines like the Idaho Cobalt Project.
The Grouse Creek gold and silver mine, located south of the Frank Church-River of No Return Wilderness in central Idaho, promised a state-of-the-art facility in 1994, but operations shut down after three years and the Forest Service later ordered an emergency drawdown of the mine's tailings impoundment to protect federally designated critical salmon habitat.
In the Coeur d'Alene River Basin in northern Idaho, arsenic, lead, cadmium and other heavy metals from former silver mines and smelting operations have poisoned former employees and killed off aquatic life in streams and rivers and could cost an estimated $1.3 billion over the next 50 to 90 years to clean up under a recent EPA plan.
The Panther Creek watershed has also weathered environmental insults, as evidenced by the Blackbird Mine, which includes an unreclaimed 12-acre open pit hollowed from a mountainside adjacent to the Idaho Cobalt Project and several miles of underground mine works.
"The Blackbird Mine is basically a study in what not to do," said Robison of the Idaho Conservation League.
Blackbird was first discovered in the 19th century and was subsidized in part by the U.S. government to supply a growing Cold War mineral stockpile. It was a strategic center of cobalt and copper production until operations shut down in the early 1980s.
The surface and underground mine was declared a Superfund site in the 1990s after heavy metals, including arsenic, cobalt, copper, manganese, nickel and zinc, were released into the surrounding creeks along with acid mine drainage and contaminated runoff.
Blackbird Creek, bereft of the steelhead and Chinook salmon that once called it home, has taken on a rust-red hue as it flows from the mine site toward Panther on its way to the Salmon.
Waste rock piles up to 2 million cubic yards in size are scattered along several miles of Meadow and Blackbird creeks, parts of which are now capped over with an impermeable layer of clay.
Rainwater is rerouted above and around a tailings dam 150 feet high and two football fields wide. Water cascades down an artificial concrete ravine next to the dam, but also seeps through leaks near the bottom of the impoundment.
"You have rainwater that is actually being intercepted and conducted off-site," Robison said. "This is considered a success, our work is done, but I say, 'Wait a minute, guys, that's not quite it.'
"It's basically, if you will, an industrial sacrifice zone," he added.
Similar stories are playing out across the West, according to EPA's Abandoned Mine Land Team, which estimated the cost of remediating mine sites on the National Priorities List in the United States to be on the order of $20 billion.
Blackbird, and its continuing impact on regional waterways, was one reason ICL decided not to challenge the Idaho Cobalt Project, Robison said.
It also helped that the project is largely underground and would disturb less than 200 acres of forest, he added. The Clear Creek wildfire a decade ago swept through a 200,000-acre swath of the Salmon-Challis, charring any habitat that could have been inhabited by lynx, gray wolves or grizzly bears.
Raising the bar
Water contamination has long been a byproduct of mining practices that prioritized convenient disposal of waste rock without considering the impacts such dumping would have on the environment, said Preston Rufe, environmental manager at the Idaho Cobalt Project.
Much like conventional waste management, mining seeks to separate valuable commodities and dispose of relatively useless stock.
"The purpose was to get rid of it as fast and easily as possible by dumping it here or there or wherever it was easy to do it," said Rufe, "not realizing that that stuff still has trace sulfide mineralization in it, which turns acidic with water and oxygen."
None of this could happen at the Idaho Cobalt Project, which conducted exhaustive computer modeling and is implementing multiple redundant mitigation steps to prevent similar impacts, Rufe said.
In contrast to historic mines that were built horizontally into a mountainside to facilitate easy transport of ore carts, the Idaho mine will decline gradually into the mountain to prevent water from flowing out of the portal.
Half of the project's tailings will be placed back into the mine upon reclamation and fortified with an acid-neutralizing cement, Rufe said. The tunnels will then be allowed to re-flood, eliminating most of the oxygen needed to yield acid.
"We did a lot of geochemical testing on the rock samples we extracted during the exploration process," Rufe said, and found that roughly 80 percent of the ore has no acid-producing potential.
The firm also studied multiple years of meteorological data to determine how much water could be expected to percolate through the underground workings after the mine has closed and what impact a massive flood could have on the waste rock pile and groundwater.
At worst, the mine could produce elevated levels of cobalt or copper in the groundwater for between two and five years after closure, Preston said. But the chances of that happening are very slim.
If it does, the firm has installed a series of monitoring wells about halfway between the mine shaft and Bucktail Creek downhill from the mine. If contamination is detected, groundwater capture wells placed further down the hill would intercept the polluted water and redirect it to a treatment plant for discharge into another creek, Rufe said.
"Honestly, I don't think we'll ever have to turn this on," Rufe said while sketching the pump-back system on a dry erase board in his office in Salmon. "But it's nice to have it there and know that if nothing else works -- the decline, the flooding, the alkaline amendment -- we have this in place."
With secured financing, the firm should have plenty of revenue to pay for the treatment in the case of unexpected contamination. Production is expected to cost less than $8 a pound, and cobalt currently sells for just under $20 a pound.
Even so, an estimated $44 million reclamation bond must be submitted before the mine is excavated below the water table, according to the Forest Service's January 2009 record of decision.
A Forest Service spokesman said officials were unavailable to discuss final bonding negotiations due to a wildfire burning in the southern part of the forest near Stanley, but Rufe said the bond would be enough to ensure water treatment in perpetuity, or about 100 years, if necessary.
Expect the unexpected
Yet despite extensive computer modeling and exhaustive ore sampling, there are always unknowns involved in the construction of a mine, said Tom Myers, a Reno, Nev.-based hydrologist who is a consultant to county commissioners and conservation groups.
"You're effectively changing the geology that nature would take thousands of years to change on its own," Myers said.
While not familiar with the Idaho Cobalt Project, Myers said he was impressed that the firm was investing in monitoring and pump-back wells to protect the Salmon River drainage.
But he cautioned that pre-mining studies to determine the geophysical characteristics of rocks often draw from too small a sample size, leading to flawed projections of how much acid a reclaimed mine could produce.
Formation Capital officials said they conducted geochemical analyses on 136 rock samples from 16 cores drilled across the mine site at approximately 300-foot intervals.
Myers added that at least 30 years of groundwater quality monitoring is typically needed to ensure acid-producing rocks do not outlast the buffering chemicals needed to neutralize them.
"You could be monitoring for 20 years and that's when the buffer runs out," he said.
But Rufe said Formation's extensive modeling efforts have increased confidence "that this flush of metals will only last, at most, a couple of years. And then it's done. The reaction cannot keep happening."
"But it's not likely to happen," he added. "All the scientists agree that it's not likely to happen."
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