Debbie Coffey Copyright 2010

All Rights Reserved

Part 1

It seems like there’s not much hope for Mt. Hope in Nevada.  A brave group of American farmers and ranchers (and so far, Eureka County, NV) are all that is standing between our valuable American resources and water rights, and a Chinese company that has taken a $745 million loan from a bank fully owned by the Chinese Government.

Mt. Hope is about 23 miles northwest of Eureka, NV, and contains the world’s largest and highest grade undeveloped molybdenum project, the Mt. Hope Project.

What is molybdenum?  It has the 6th highest melting point of any element, and is used in nuclear reactors, high temperature superalloys, aircraft parts, electrical components, high strength steel alloys, high pressure and high temperature applications, medical applications, gas and oil pipelines to prevent leaks, and as a catalyst in oil refining.  It is also a catalyst in liquefaction (helping refiners meet EPA and EEU pollution emission standards) and co-processing, the process of liquefaction of tires and plastics.  Demand is increasing in the green industry since it’s used in the production of pipes and tanks that transport biofuels, which are corrosive.  Molybdenum is also used in thin film CIGS solar panels, which are less expensive than traditional solar cells.

General Moly is 25% owned by Hanlong USA Mining, a subsidiary of Sichuan Hanlong Group, a Chinese “private enterprise.”  Sichuan Hanlong Group recently received a $1.5 billion loan from the Export-Import Bank of China (China Eximbank) to support its investments in overseas mining opportunities, with $745 million towards General Moly.  The Export-Import Bank of China is fully owned by the Chinese government and under the leadership of the State Council.  It’s a “government policy bank.”  Hanlong mining’s website states “China is on a long term growth path to becoming the world’s largest economy” and that Hanlong is “undergoing a period of rapid international expansion.” 

China is securing molybdenum resources.  China has been the world’s largest producer of molybdenum, supplying almost a third of global supplies.  Increasing global demand may prompt China to restrict exports.  This may cause the price of molybdenum to rise significantly.  In October, 2010, China’s Ministry of Land and natural Resources declared molybdenum a strategic metal.

Our National Academy of Science defines strategic metals as those that are important in use and subject to potential supply restrictions.  Strategic metals are critical to our national security.  If a foreign company owns OUR supply of a strategic metal, could this company potentially restrict our use of the metal and sell it elsewhere in the world?  If Hanlong ever went “belly up,” would the Chinese government bank take over General Moly?  If molybdenum is strategic for China, shouldn’t it also be strategic for the U.S.A.?   Why are we letting a foreign country have any control of this resource?

General Moly (Idaho General Mines, Inc. in 2004) owns 80% of Mt. Hope Project, and the other 20% is owned by POSCO (Pohang Iron and Steel Company) of Pohang, South Korea.  Mt. Hope has about 1.3 BILLION pounds of molybdenum.

General Moly also owns 100 % the Mt. Liberty Project on a royalty free basis.  Mt. Liberty is a molybdenum mine 25 miles northwest of Tonopah, Nevada and contains 503 million pounds of molybdenum.  General Moly claims these are the two best molybdenum projects in the world, and once production commences, General Moly is expected to become the world’s largest primary molybdenum producer.

It’s ironic that this mining deal involves the words hope and liberty, because what this really represents is that we are losing both for our country.  You can see it on the faces of the farmers and ranchers at this meeting.

The only reason I heard about Mt. Hope was because I went to Tonopah, NV to observe the BLM rounding up our wild horses.  The Paymaster Herd Management Area (HMA) is about 100,500 acres and the BLM removed 45 “excess” horses, leaving only 23 wild horses on 100,500 acres.  The Montezuma HMA is 77,931 acres, and the BLM removed 78 wild horses and 61 burros, leaving only 3 wild horses and 10 burros on 77,931 acres.  The BLM claims they rounded up “excess” horses to protect the range from degradation and to strive for a “thriving natural ecological balance.”  I’d like them to explain how one horse per every 1,000 or 1,500 acres could possibly degrade the range.  A horse only drinks about 15 gallons of water per day.

This is almost ludicrous in comparison to this: the Mt. Hope Project will need 7,000 gallons of water per minute (gpm) for the life of the mine (40-50 years) and will draw 11,300 acre feet annually (afa) from the aquifer.   The project layout shows that one waste dump will hold 650 million tons, the tailings facility will hold 435 million tons, another waste dump will hold 125 million tons, and the Ultimate Pit, the open pit, will have 669 million tons of “resource” dug out of it, and will take 1,220 years to reach equilibrium.  (In 44-50 years when General Moly finishes mining, and this pit fills with water, for every gallon that evaporates out of it, a gallon of water will be drawn from the aquifer beneath it.)

Considering the issues above, the BLM seems to be in violation of the Federal Land Policy & Management Act of 1976 (FLPMA), which mandates them to manage public lands and various resource values so that they are utilized in the combination that will best meet the present and future needs of the American people…not necessarily to uses that give the greatest economic return.

A General Moly presentation claims the BLM has agreed not to protest General Moly’s water rights, and that the Battle Mountain BLM is “eager” to finish the EIS process and that “the Battle Mountain BLM office has full authority on Record of Decision (ROD).

Although the farmers and ranchers have asked to see a water drawdown map of 5 feet, the BLM has only required General Moly to provide a water drawdown map of 10 feet.  The BLM has also not required General Moly to provide a water drawdown map of 20, 30 or 40 feet.

The Mount Hope Project and Liberty Project aren’t mentioned on any of the BLM Field Office websites.

As a matter of fact, it seems pretty hush hush.  I tried to get a copy of the minutes of the Sept. 30, 2010 Northeastern Great Basin Resource Advisory Council (RAC) meeting (they advise the BLM), which had plans about mineral projects on the agenda.  However, the Associate District Manager of the Elko Field Office told me the minute taker was “swamped” and they did not have a target date to get them completed.  This meeting was over 2 months ago…so nobody else in that office can type?

I also asked the BLM if the public could attend the really important meeting that BLM is having with General Moly and other government agencies the week of Dec. 13, 2010 to discuss the Draft Environmental Impact Statement (DEIS), but was told by the Battle Mountain Field Office that it was an “internal meeting.”  Our tax dollars are paying for the BLM building and government employee  salaries, but we aren’t allowed to attend this meeting?  By the time the public is allowed to attend public meetings and has the “opportunity to provide feedback” this will pretty much be a done deal.

I happened to notice there was a meeting at the Nevada Division of Water Resources in Carson City, Nevada, regarding 88 water rights applications by General Moly subsidiary Kobeh Valley Ranch LLC.  (General Moly also wants to buy up the water rights of nearby farmers and ranchers.)  This decision rests on the shoulders of one man, Jason King, Nevada’s State Engineer.

In today’s meeting, Dwight Smith, owner of Interflow Hydrology, Inc. while testifying on behalf of his client, General Moly, referred to the BLM as a “stakeholder.”  What is BLM’s stake?

This small group of our farmers and ranchers didn’t sell out for money offered.  They’re standing strong.  They use words like “community” and “our future” when talking about this issue.  If you’d like to support them:

Attend a meeting on Dec. 9 and 10, 2010 (9 a.m. – 4 p.m.) at Nevada Dept. of Water Resources, 901 S. Stewart Street, room #2002, Carson City, NV 89701

Or call BLM Battle Mountain District Office:  Gerald Miller, District Manager (775) 635-4000

BLM Nevada:  Ron Wenker, State Director (775) 861-6590


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