By Debbie Coffey

Investigative Journalist/PPJ

Copyright 2011  All Rights Reserved

Mining companies are buying up ranches left and right,  just to get the water rights.  Then all they have to do is get a permit to change the use from irrigation to mining.  Once appropriated, the water rights are not available for any other development, even if the mine never opens, unless the mine is willing to sell the water rights.

At a Nevada Division of Water Resources hearing in December, 2010, an admirable group of Nevada farmers and ranchers, who’ve had water rights in their families for generations, protested the appropriation of water rights of Kobeh Valley Ranch, owned by mining company General Moly.  General Moly wants to change the use of water rights on Kobeh Valley Ranch from irrigation to mining for their Mt. Hope mine.  This is in addition to other water rights General Moly has already purchased from other farms surrounding the valley.

To give you some background, 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.”

Black Rock Trust Company, which is associated with billionaire George Soros, seems to be the 2nd top owner of shares in General Moly.  BlackRock Trust is also the 5th top owner of shares in agricultural company Monsanto.

Interestingly, Black Rock Trust’s parent company, Black Rock, Inc., is the world’s biggest money manager (and a fund related to George Soros) and has acquired stakes in the Far East Energy Corp., a Houston company that’s raising cash to develop natural-gas properties in China.

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.  The Mt. Hope plan of operations is on 260 acres of private land, and 8,000 acres of public land.

The farmers and ranchers (irrigators) are worried because KobehValley water is believed to flow into Diamond Valley, where many of them need water for farms and ranches.  Some worry that if the mine’s tailings ponds were ever breached, it could pollute surrounding hydrographic basins. Mt. Hope straddles 3 hydrographic basins (KobehValley, Diamond Valley and PineValley).

B.G. Tackett, who has been a field engineer with California’s Dept. of Conservation, was concerned because the entire flow system was not studied.  Antelope Valley was not included. No applications to drill wells are needed in non designated basins. Antelope Valley and South Monitor and North Monitor are not designated.  Will water ever be taken from these valleys?

Farmers and ranchers have a big concern with head charge – whether water in Kobeh Valley is “confined” (by geological bodies that are less permeable than the aquifer), or if Kobeh Valley water flows to Diamond Valley and other valleys.

General Moly created hypothetical models that claim that Kobeh Valley water is confined and doesn’t flow to other valleys, and that the mine’s use of 7,500 gallons per minute of water for the next 40-50 years (the life of the Mt. Hope mine), will not effect Diamond Valley and other valleys.

However, according to the U.S. Geological Survey, many aquifers are intermediate between being completely unconfined or confined.

The farmers and ranchers know they won’t be able to truly tell, until the passage of time, if there  IS interconnectivity between the valleys.  If there is interconnectivity, it will be too late to stop what could be disastrous effects on their farms and ranches.

Also, when mining stops in 44-50 years, the development of a cone of depression from the open pit that had 669 million tons of “resource” dug out of it, can result in an overall decline in water levels over a large geographic area, change the direction of ground-water flow within an aquifer, reduce the amount of base flow to streams, and capture water from streams or from adjacent aquifers.  As it is, they know it will take 1,220 years for the pit lake to reach equilibrium.

Do these farmers and ranchers have reasons to worry?  Look at a few things that have happened:

The “Sustainability Trust”

In August, 2010, General Moly announced that their subsidiary, Eureka Moly, would fund a “Sustainability Trust” for $8-$12 million, in exchange for the cooperation of the Eureka Producers Cooperative (EPC) not opposing Eureka Moly’s water rights and the permitting of the Mt. Hope Project.

Co-op members were kept in the dark about meetings between Eureka Moly (EMLLC) and two individuals from the co-op (Jim Gallagher and Andrew Marshall) being conducted in secret (excluding the rest of the co-op members as well as the rest of the Eureka farming community).  It seems that Gallagher and Marshall signed a Confidentiality Agreement and they also seem to be included with EPC on the “Agreement,” which stipulates that EPC:

“not oppose, directly or indirectly, any of EMLLC’s mining and milling plans or operations, as set forth in its Plan of Operations filed with the Bureau of Land Management or water applications for EMLLC’s present water usage requirements and agrees not to participate in any way or manner, directly or indirectly, in any protests, petitions, or activities of others which are designed or intended to delay, adversely effect, or interfere with EMLLC’s mining and milling plans or operations as set forth in the Plan of Operation, including EMLLC’s efforts to obtain any regulatory approvals or permits for the Mount Hope Project from federal, state or local authorities.”

And also: “It is acknowledged that Jim Gallagher and Andrew Marshall , members of EPC also serve on the Eureka County appointed NEPA Committee (the “Committee”).  Those EPC members may continue to serve on the Committee and fulfill their duties and responsibilities to the Committee in a neutral and impartial manner without said service violating the terms and provisions of this Agreement.”

BOTH Gallagher and Marshall are ON THE NEPA (National Environmental Policy Act) COMMITTEE reviewing General Moly’s plan of operations with the Bureau of Land Management (BLM). Does this sound like a huge conflict of interest to you?

NEPA responsibilities are those of a trustee of the environment for current and succeeding generations, to assure for all Americans safe, healthful, productive, and esthetically and culturally pleasing surroundings, and to attain the widest range of beneficial uses of the environment without degradation, risk to health or safety, or other undesirable and unintended consequences.

How can Gallagher and Marshall possibly fulfill their duties and responsibilities on the NEPA committee if they’ve agreed to be “neutral and impartial” in the meetings?  They’re in meetings with the BLM for the environmental assessment of Mt.Hope.  Are they just sitting in chairs like lumps on a log?

The rest of the EPC members were only given part of one afternoon meeting to consider the complicated Agreement, which was developed in secret.  They realized they were not going to be able to access the proceedings or be informed of the decisions until AFTER the contract was executed and filed with the SEC.  They weren’t sure if they had the most current copy of the Mt. Hope Plan of Operations, or if, from vague wording in the Agreement, they’d be sued in ten years if they exercised their 1st Amendment rights and commented on the operations of the mine.  It seems that many EPC members found these restrictions to be unacceptable.

With the influx of that Chinese government money, General Moly got themselves a big lobbyist: Pete Ernaut

Pete Ernaut was a former three-term Republican state assemblyman.  He ran political campaigns for Sen. John Ensign and Nevada Governor Brian Sandoval.  Ernaut is a close advisor to Gov. Sandoval, who recently met with Secretary of the Interior Ken Salazar.  And guess what?  Gov. Sandoval asked that permitting times be reduced for Mt. Hope (along with some other mines).

The BLM has told General Moly to ONLY do a 10 foot water drawdown map

Why?  This masks the impact of the water used by the mine.  The farmers and ranchers have repeatedly asked for 1’ and 5’ water drawdown maps.  A stream can dry up with even a 1’ water drawdown.  The area of impact will show a much greater area on a 5’ water drawdown map than on a 10’ water drawdown map.

So, if the BLM is acting impartially, as they are supposed to do according to their own ethics rules, why are they directing that only a 10’ water drawdown map be done?  How could this possibly benefit the farmers and ranchers?  It wouldn’t cost General Moly much or take very long to do the 1’ and 5’ water drawdown maps.  If General Moly is as ethical as they claim to be, why don’t they just ask Pete Ernaut to lobby the BLM or Secretary of the Interior Ken Salazar to let them do it?

The farmers and ranchers are very concerned because they still haven’t been able to see a mitigation plan, and they depend on water from the aquifer for their livelihood and for the future of their community.

The mitigation plan and monitoring plans may be part of the final Plan of Operations, and this is not available to the public until it’s released in the Draft Environmental Impact Statement (DEIS).  There is supposed to be a 45 day period for the public to comment before the BLM Battle Mountain District Office manager issues a Record of Decision (ROD).  Then it’s a done deal.  Do you think the DEIS process should be open to the public, since it concerns our public lands and private lands, and involves our tax dollars?

These farmers and ranchers have been growing this community for generations.  Please support them.

Send an e-mail to BLM Director Bob Abbey at (with a copy to, Doug Furtado, Battle Mountain District Manager) and ask that the BLM Battle Mountain District Office have 5’ and 1’ drawdown maps done on General Moly’s Mt. Hope Project in Nevada for the DEIS.

Or, attend a meeting on May 10, 2011, 9 a.m., at Nevada Dept. of Water Resources, (second floor, Tahoe Hearing Room), 901 S. Stewart Street, Carson City, NV89701.  Check here to make sure the date and time hasn’t changed.


If you missed reading the first 2 parts of this series:

PART 1“Chinese Government Money is Buying One of USA’s Biggest Mines”

PART 2:  “General Moly’s Mt. Hope Mine: Let’s Hope the Eureka Moment Doesn’t Spell Disaster


Nevada Division of Water Resources hearings

(C) 2011 Debbie Coffey

Source: PPJ Gazette

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One Response to “Is a mining company giving the shaft to farmers and ranchers?”

  1. LibertyTreeBud says:

    can’t live without water. Either open your hiney up for the sodomy from mining or get your second amendment rights and plenty of lead and get rid of them. The war has started.