Barrick Cortez Hills injunction potentially devastating to Nevada governments

Date of publication: 
28 January 2010

In response to a court injunction which would stop construction of the Cortez Hills gold project, Barrick has offered additional mitigation that would delay the processing of refractory ores, and reduce future dewatering.

RENO, NV – Barrick’s full-court press to build Cortez Hills mine despite an NGO lawsuit seeking to stop the project altogether generated environmental concerns that the 9th Circuit Court of Appeals has insisted must be addressed or the project will be halted.

In response, Barrick has asked a federal court judge to narrow the terms of a preliminary injunction which will allow Cortez Hills to continue on its construction schedule but limit groundwater pumping and not transport or process refractory ore from the minesite.

Barrick has told the court that Cortez Hills construction is already 98% complete.

One of the most critical components of a delay in the Cortez Hills schedule are the financial burdens faced by a county and a state already struggling to cope with record budget deficits.

“The public interest in employment for 500 to 1,000 people, the public interest in the economic health of the local community, and the public interest in receiving tax revenues in a time of desperate need, weight heavily against an injunction that would completely halt the project,” Barrick argued.

The 9th Circuit ruled the Bureau of Land Management failed to analyze the mine’s potential to pollute the air with mercury emissions and the potential impacts of mine dewatering on the water basins of the Crescent Valley. Jerry Smith, the Battle Mountain BLM district manager who approved the Cortez Hills project, told the Elko Daily Free Press that the agency is prepared to conduct further analysis on the transportation of refractory ores and dewatering mitigation.

In court documents filed by Barrick, the company contends, “A blanket injunction would cause many hundreds of people to lose their jobs would cause severe damage to the northern Nevada economy.” Barrick isn’t exaggerating the economic severity of the situation. Nevada fiscal expert Mike Alasteuy of the Applied analysis financial advisory and economic consulting firm estimated that just a six-month delay in Cortez Hills construction would cost the State of Nevada and Lander County $24.5 million in taxation revenue.

Alasteuy has insisted it is “profoundly important” that the needs of local government be considered if Cortez Hills is delayed by an injunction. If mining operations were suspended for one year, Nevada governments would lose $48.9 million in tax revenue, which would cost Nevada school districts $10.4 million in revenue loss, the Lander County Hospital would lose $3.8 million and the state would lose $16.2 million.

In a declaration filed with the federal court, Gene Etcheverry, executive director for Lander County, said, the county has an operational budget of $14.9 million and a construction and capital improvement fund of $3.8 million this year. Etcheverry explained the county’s residential property tax base has decreased to almost nothing. However, Cortez Hills generated $3.25 million in real and property taxes for the county in 2009 alone.

“In the immediate future a continued stream of increased tax revenues from mines, and in particular increased net proceeds revenue, is critical to the continued viability of Lander County and our ability to provide quality services to our residents,” he declared.

“Cortez Hills is the only mine scheduled to come online in Lander County and there are no other economic development projects that could generate comparable tax revenue,” he added.

Meanwhile Nevada Gov. Jim Gibbons is calling a special session of the Nevada Legislature to address a projected budget deficit of $900 million, which Assembly Speaker Barbara Buckley says necessitates 22% across-the-board cuts.

In their filing with the Federal District Court in Reno, Barrick asked the court to enter a limited preliminary injunction that would prohibit all off-site shipping of refractory ore from the Cortez Hills open pit and the pumping of groundwater in excess of rate approved prior to a November 12, 2008 Record of Decision on Cortez Hills until the BLM completes a Supplemental Environmental Impact State (SEIS) and issues a new Record of Decision.

Mercury emissions from Nevada mines have been a bone of contention among environmentalists, mining companies, state and federal regulators. Refractory ores require processing which releases some mercury emissions. Environmental special interest groups say mercury emissions generated by Barrick’s flagship Goldstrike mine should be factored into the Cortez Hills mercury emissions analysis by BLM because mercury emissions from Nevada mines should be considered in total, not separately.

In the meantime, Barrick told the court it has already removed 70 million tons of overburden from the Cortez Hills open pit and has, thus far, invested a total of $633 million in project development and construction. “A blanket injunction stopping the project would also cause irreparable harm to Cortez,” the company argued.

Barrick estimates that 550 jobs would be lost. “The devastating impact on these people losing their jobs and their paychecks goes without saying. The Court can take judicial notice of the current state of the economy and the high unemployment rates in Nevada.”

“Indeed, for every day Cortez is delayed in realizing a return on its investment,” the company contends Cortez loses $300,000.