Winter 2001-2002 Bulletin

Report Finds Mine Reclamation an Economic Opportunity for New Mexico: Case Study of Molycorp Mine reveals nearly $1 billion in potential economic benefits

At a press conference in Albuquerque on October 17, Amigos Bravos released a report showing that mine reclamation has the potential to be an economic boon to mining communities in New Mexico and throughout the West. The report, entitled “A Framework for Assessing the Economic Benefits of Mine Reclamation,” was prepared for Amigos Bravos by the Ecology and Law Institute, an environmental policy research institute, and two University of New Mexico economics professors. The 80-page report uses the Molycorp mine in Questa, New Mexico as a case study to demonstrate that enormous economic benefits can be generated for local communities by requiring full reclamation of mine sites. The report found that economic benefits of a $200 million reclamation investment at the Molycorp mine would yield between $670.9 and $932.3 million in economic benefits. Key findings of the report include: Rural communities in northern New Mexico and throughout the West rely far more heavily on amenities as a tool for economic growth and diversification than they rely on extractive industries such as mining, oil and gas leasing, grazing, and logging . Unreclaimed mines are an impediment to economic diversification because they greatly inhibit a community’s ability to market itself as a high-quality enviroment in which to live, work, and raise families. Reclamation can serve as a bridge between a community’s extractive past and a future based on a high quality living environment. A full reclamation plan for the Molycorp mine has the potential to generate between $670 – $932 million in economic benefits including $640 - $874 million in direct and indirect income, output, and earnings, and another $30 - $58 million in nonmarket benefits. Full reclamation of the Molycorp site will generate at least 772 new jobs in the region, and many such jobs fall into the fast growing field of environmental remediation. The Report develops and applies a methodology for analyzing both market and non-market benefits of mine reclamation that can be used by communities and regulators nationwide to assess the economic potential of reclamation. In the case of the Molycorp mine, market benefits include new employment opportunities, the benefit to the regional economy as these new wages are circulated throughout the community, and increased revenues associated with recreational activities. Non-market benefits include improved water quality and flow, enhanced scenery, erosion control and improvement of fish and wildlife habitat. Amigos Bravos, as readers will know, has been negotiating with Molycorp and regulatory agencies to advocate for the best possible reclamation plan at the mine. A May, 2000 report prepared for Amigos Bravos by the Center for Science in Public Participation, estimated that the cost of full reclamation at the Molycorp Questa mine would be $380 million. At recent hearings in September, Molycorp asked New Mexico’s Mining and Minerals Division for a waiver and variance from reclamation requirements for its open pit and subsidence areas, and offered to undertake an $129 million reclamation effort. According to Amigos Bravos research assistant Rachel Conn, “ Anything short of a full reclamation effort would shortchange residents of northern New Mexico of tremendous economic opportunities.” According to the lead author of the report, John Talberth, “Full reclamation of the Molycorp mine site has the potential to generate nearly $1 billion in economic benefits for residents of Questa and northern New Mexico. By creating skilled, family wage jobs, restoring the blue ribbon fishery of the Red River, enhancing property values, and eliminating air and water pollution, reclamation can serve as an important tool for economic diversification of an area that has suffered the ups and downs of unstable mining employment for nearly three decades.” Amigos Bravos is now working with Turtle Island Media to develop a one hour Public Television video project that will highlight and demonstrate the conclusions of the report.

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