Gold mine expansion could produce $2.5 billion. But environmental problems linger.

·8 min read

A gold mine that is seeking to expand in Lancaster County has again drawn state scrutiny for violating environmental rules, this time over excessive discharges of cyanide, a potentially deadly chemical used in the mining process.

The Haile Gold Mine, which stands to produce more than $2 billion in gold and silver from the mine expansion, has broken a federal wastewater law twice since late 2020 at the site between Columbia and Charlotte, state and federal records show.

The 2020 wastewater discharge violations, disclosed this week by the Department of Health and Environmental Control, are the latest in a series of environmental troubles to surface about the mining operation.

Since last summer, DHEC has fined the gold-digging operation nearly $128,000 for violating environmental rules that are intended to protect the air and water. The mine faces additional penalties for the wastewater discharge violations if the site’s operators don’t improve the mine’s performance, DHEC said.

The Haile Gold Mine, the subject of a hearing Thursday night about the proposed expansion, is seeking to dig up more land and process more of the precious metal as the price of gold has risen. The expansion would occur at one of the few gold mines in the eastern United States. The open-pit mine is a vast area of gaping holes and cleared land similar in scope to many western U.S. gold mines.

Haile’s expansion plans are drawing scrutiny from conservationists who are worried about the company’s recent troubles and its long-term plans for cleaning up the mining site.

John Tynan, director of the Conservation Voters of South Carolina, said environmentalists plan to speak at Thursday’s hearing on the mine expansion.

“The conservation community will be weighing in on the expansion permits, especially given the recent violation and compliance history,’’ Tynan said. “They’re going to get an incredibly hard look by the conservation community as well as DHEC.’’

Meanwhile, a leading environmental attorney said this week that site owner OceanaGold needs to post an additional cash bond to restore the property and cleanup any pollution that might be left when the company finishes mining the property and leaves South Carolina in the early 2030s.

Haile had agreed to post a $10 million cash bond before the mine opened in 2017, but expanding the gold mine will increase environmental risks — and more cash better ensures taxpayers won’t be stuck with a cleanup bill one day, Columbia lawyer Bob Guild said.

“My view is they need to have more financial assurance, generally, and it needs to be in the most reliable form that is not subject to dispute or uncertainty: cash is really it,’’ said Guild, a Sierra Club lawyer who has been in discussions about the mine expansion with lawyers for OceanaGold.

Haile has proposed to add about $16 million more in financial assurance, or funding to pay for restoration and cleanup of the site, but it was unclear if any of that would include cash. Guild said DHEC should consider requiring OceanaGold to post another $10 million in cash for the expansion.

By law, many companies with the potential to hurt the environment must assure money is available for a cleanup one day. Many rely on insurance policies, letters of credit, corporate guarantees and other mechanisms.

DHEC did not directly address whether more cash would be required, but a spokeswoman indicated in an email that the $10 million in cash posted before the mine opened would not increase.

The Sierra Club was the only environmental group to challenge a permit for the mine in 2014, ultimately succeeding in forcing the company to put up $10 million in cash, instead of $5 million as initially proposed by the state.he Sierra Club’s action followed a series by The State on the environmental impacts of gold-mining in Montana and South Carolina.

Chris DeScherer, an attorney with the non-profit Southern Environmental Law Center, said his group wants to ensure there are “sufficient plans and funds in place to safely reclaim the mine site when mining is complete,’’ said

The Haile Gold Mine, a historic site that reopened under OceanaGold, is about six miles from the town of Kershaw in southern Lancaster County. The company is seeking to expand the site because it can now more affordably reach gold deposits that previously would have been too expensive to mine, records show.

Many locals, including Kershaw Mayor Mark Dorman, say the mine has helped the area’s economy. The gold mine employs about 400 people now and would add more than 200 jobs with the expansion, officials have said. OceanaGold says more than $1 billion has been invested in developing the mine since 2007, when exploration for additional gold deposits began. The expansion could produce $256 million in gold and silver annually, one federal environmental impact report says.

“They’re good business people, and they want to help this community as much as they can,’’ Dorman said, noting that the mine has funded community projects, such as a playground at a park. Restaurants are busier and once-vacant homes have been rented or sold since the mine opened, he said.

According to the expansion plans, OceanaGold will enlarge the 4,552 mine site by 832 acres, or about 18 percent. Nearly 100 acres of wetlands and floodplain would be dug up or filled in, and more than two miles of creeks would be affected, according to the federal environmental study of the expansion. State regulators have characterized the expansion as substantial.

OceanaGold also would increase areas where the company plans to deposit potentially acid generating rock, while also increasing a mining waste storage site known as a tailings pond. The tailings facility, which would hold cyanide waste, would increase in size by about 20 percent. It would be able to hold hold 72 million tons of tailings, up from the current 40 million tons, the 2020 environmental study says.

Additionally, the company for the first time plans to dig an underground mine that would be up to 1,314 feet below the surface.

OceanaGold officials said they run an environmentally sound operation. The company did not directly address questions about whether it would post additional cash to cover any environmental problems that could occur later from the expanded operation.

“At the Haile Gold Mine, we are committed to responsible environmental management across all our business activities,’’ according to a statement from Jim Whittaker, an executive general manager with OceanaGold. “We identify, self-report and immediately undertake work to rectify any environmental events or exceedances.’’

The latest problems to surface center on wastewater discharges in November and December.

In one case from November, wastewater from the mining site was so toxic that it killed every water bug tested, DHEC says. One way wastewater discharges are tested is by exposing tiny bugs to the water to see how they hold up. The company’s discharge permit says wastewater releases are not supposed to kill more than 40 percent of the bugs per day, but the mine reported “100% mortality,’’ according to DHEC.

OceanaGold said the November violations resulted from contamination from a cleaning solution.

In the other case, the company released more cyanide than is allowed in its discharge permit. The company discharged 9.2 micrograms per liter of cyanide in December 2020, but the monthly permit limit is 5.2 micrograms per liter.

Cyanide, used to separate gold from ore, can cause convulsions, respiratory failure, loss of consciousness and death if people are exposed to high amounts, according to the U.S. Centers for Disease Control and Prevention.

OceanaGold said the December cyanide violation resulted from a plumbing change that affected water in discharge pumps.

Whittaker’s statement said the company discovered the wastewater discharge issues and reported them to DHEC. The problems have been resolved, he said.

That the company identified the wastewater problems itself “is a demonstration of the environmental monitoring system .... working the way it should,’’ his statement said. “It exists to help the site identify and rectify anything that could potentially cause environmental impact early and quickly.”

OceanaGold’s most recently disclosed troubles follow three separate DHEC enforcement cases involving the Haile Gold Mine that had been announced by DHEC in the past year.

The agency said in September it had fined the mine $11,200 after finding excessive water releases of thallium, a toxic material used in rat poison. Three months later, DHEC said it had fined the Kershaw Mineral Lab more than $16,000 for 19 environmental violations, including for hazardous waste.

Then in February, DHEC said it had fined the mine $100,000 for breaking air pollution rules before 2021. The agency said the mine exceeded the safe limit for mercury in the air, then failed to tell the agency as required.

Mercury is a toxic metal that has contaminated fish across South Carolina. Mercury at the site was found at levels that had not been expected, DHEC said.

OceanaGold’s expansion could be months away. The Haile Gold Mine still needs approval for multiple environmental permits, including a federal wetlands permit from the U.S. Army Corps of Engineers and a mining permit from DHEC.

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