Oregon gold rush isn’t what it used to be

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Tuesday, April 01, 2008

Goldbars.jpg

STATEWIDE There may be gold in them thar Oregon hills, but nobody’s mining it. Even with gold prices hovering at all-time highs in the neighborhood of $1,000 per ounce, the same dozen or so mining companies that have held mining claims for years continue to pass on Oregon while looking elsewhere, usually overseas, to capitalize on the global gold rush.

Gold spurred the settlement of northeastern and southwestern Oregon in the 19th century, but the industry has never recovered from high labor costs, tightening state regulations and the downfall of gold prices. Those prices have bounced back spectacularly as the dollar has weakened, but there are no mining companies in Oregon positioned to capitalize, says Gary Lynch of the Oregon Department of Geology and Mineral Industries.

“There’s very little exploration going on in the state, and without exploration you won’t see much mining,” says Lynch. “The industry went overseas about 10 years ago, and they may be hesitant to come back because of permitting requirements.”

Richard O’Brien, the CEO of Newmont Mining, the second-largest mining company in the world, was born in Portland, but his Denver-based company has ventures further overseas each year. Newmont formerly leased a property called Grassy Mountain, southwest of Vale, but the company wrote off its $33.8 million investment in Oregon in 1996 in favor of development in countries such as Ghana, where Newmont is building schools near its mines to train future workers.

Oregon’s days as a gold producer are long gone, but that doesn’t mean there aren’t companies cashing in on the skyrocketing metals prices. One example is Esco Corp. of Portland, a privately held manufacturer of heavy mining equipment that has seen sales growth in South America and Africa.

“We’ve definitely been benefiting from these strong prices and from the increase in global demand,” says Jon Owens, Esco’s vice president for mining and construction products. “There’s been a lot of expansion of existing mines, and when production increases we benefit.”                                                   

BEN JACKLET



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