Kershaw plan closely watched: Is company forging future for gold mines?

sfretwell@thestate.comSeptember 2, 2013 

The expansion of the gold-mining industry in South Carolina faces challenges, including whether prices for the precious metal remain high enough to justify digging up the earth.

But one of the biggest issues is how much time and expense mining companies incur trying to ease environmental concerns from operations that gash deep pits, destroy wetlands and dry up groundwater.

That’s why plenty of people are watching Romarco Minerals Inc. these days.

The fate of gold mining in South Carolina is tied to an ambitious plan by the company to offset wetlands damage at a huge mine it plans near Kershaw – and how well Romarco navigates the environmental permitting process, observers say.

More than 20 years after one of the state’s most prolific gold mines closed, Romarco Minerals Inc. of Canada is trying to persuade state and federal regulators to let it dig up and substantially expand the Haile mine in Lancaster County.

To do that, Romarco must convince regulators that the company has done all it can to avoid unnecessary damage to wetlands, streams, rivers and groundwater – and Romarco must offer compensation for the environmental impacts the mine will have. The company recently offered a wetlands offset package that could cost it $32 million.

Romarco’s efforts are expected to guide future company work in South Carolina, as well as those of other gold-exploration companies on whether to dig new mines. Some of Romarco’s competitors have been searching for gold in the Carolina Slate Belt, a rocky area that in South Carolina is largely between Columbia and Charlotte.

Richard Darden, a wetlands regulator with the U.S. Army Corps of Engineers, said Romarco is covering new ground as it seeks environmental permits. His agency has little recent experience with gold mines in South Carolina. So the Corps will learn from the process involving Romarco, he said.

“I’d definitely say that,” Darden said. “It would let us know what are the details we need to focus on.”

Carolina gold rush

Gold deposits were discovered in the Carolinas as far back as 1800, but they never compared to the bigger deposits later found in the West.

While some mines in South Carolina continued to operate profitably through the years, gold companies didn’t get all of the precious metal buried underground. The lack of equipment and lower gold prices are cited as reasons past operations never dug up everything.

As gold prices began to soar in recent years, mining companies began to look again at the Carolinas. But unlike long ago, the environmental permitting process is an issue that today’s miners must address.

Romarco needs a federal permit to fill wetlands, as well as state water quality certification and a state mining permit, among other things. The U.S. Environmental Protection Agency’s national mining team has taken a keen interest in the project, Darden said.

Diane Garrett, Romarco’s chief executive officer, said the Slate Belt “is very underexplored” and she’s aware that rival companies are watching Romarco.

“We do believe that once we get permitted, other mining companies will have interest in coming to this area,” Garrett said. “One of the things Romarco is doing is we are helping to set a standard for mining in this state.”

Strongbow Exploration Inc., also headquartered in Canada, spent part of last year looking for gold near the site of the old Ridgeway mine between the Romarco mine and Columbia. The company also has searched near Jefferson, as well as the Haile site.

Attempts to reach Strongbow last week were unsuccessful. The company’s website shows potential new gold deposits at each of the places it has searched in South Carolina. Those include a deposit about three miles east of the old Ridgeway mine’s north pit. All told, Strongbow has looked in a 4,000-acre area of South Carolina. The Ridgeway mine closed in 1999.

Romarco’s proposal to reopen the Haile mine would dig pits as deep as 840 feet, siphon away groundwater, destroy 120 acres of wetlands and bury up to five miles of streams under piles of rock. That’s larger than virtually every other major wetlands project now pending with the Corps of Engineers in South Carolina.

$32 million plan

To offset losses at the 4,500-acre mine site in Lancaster County, Romarco is seeking to create a 3,700-acre, publicly owned state nature preserve in Richland County. The plan includes buying Goodwill Plantation and Cook’s Mountain, an uncommonly tall landform for the Midlands. Both have extensive wetlands along the Wateree River upstream from Congaree National Park.

The property, however, is about 60 miles away from the Lancaster gold mine and located in another watershed than the site near Kershaw. Federal and state regulators typically prefer that such proposals, known as “mitigation plans,” occur in the same watershed to help protect water quality in the area affected by a project.

Romarco’s proposal is a big deal economically in Kershaw, where unemployment rates are high. The company promises 700 to 800 permanent and temporary jobs if the mine opens, raising hopes among many locals of a better life.

Other residents of Lancaster County are skeptical because of the environmental damage. They criticized the wetlands offset plan during a recent public meeting in Kershaw, saying more land needs to be protected in their community. Only about 15 percent of the acreage to be protected is in the same area as the gold mine. The rest is in Richland County.

In this case, however, the Richland County properties are considered so significant to conservation efforts that the Corps is considering the wetlands offset plan.

If approved, Romarco will spend $20 million for Goodwill Plantation and about $3 million for Cook’s Mountain, then deed the land to the S.C. Department of Natural Resources. So far, DNR officials say they like the plan. The company would kick in another $9 million to help manage the properties, as well as a 700-acre site near Kershaw.

Larry Faulkenberry, who owns Goodwill Plantation, said other gold-mining companies might not be so eager to invest in South Carolina if it means spending the money Romarco will pay for the wetlands mitigation.

“If this is the trend that the DNR and the Corps require, these companies are going to have step up big-time,” Faulkenberry said.

Even so, gold mining can be worth the expense if the price of the precious metal stays high. At one point several years ago, gold was approaching $2,000 per ounce. Prices for gold are down somewhat this year, closer to $1,400 per ounce. But even at that amount, Romarco could generate nearly $3 billion by reopening and mining at the Haile site. The Kershaw property is believed to have 2 million to 4 million ounces of gold.

For now, Romarco’s plan remains under consideration. The Corps won’t consider granting the wetlands permit or approving the wetlands mitigation plan until after an environmental impact statement comes out next spring. The Corps also is awaiting the results of a groundwater study to see how drawing down aquifers to mine for gold will affect surrounding land in Lancaster County.

Reach Fretwell at (803) 771-8537.

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