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April 25, 2022updated 01 Apr 2022 11:27am

Gold in them hills: the history of Californian gold mining

Revived mining projects in California could usher in a new gold rush in the US state, but can these projects be completed responsibly? JP Casey investigates.

By JP Casey

The Californian gold rush is one of the more well-known events in mining history, and one that has taken on a life of its own in popular culture. The image of prospectors running to dig for gold in the US state is an enduring one, which has inspired Toy Story characters and sports team mascots alike, but is one that is often tied to the centuries-old past of domestic US mining. 

That is, until a range of more recent mining projects have aimed to bring gold mining back to the hills. Headlined by Rise Gold’s Idaho-Maryland mine, miners are looking not to explore for new projects, but revive those that were once abandoned, not as resources ran out, but as external economic factors rendered mining unprofitable.  

Yet with more attention than ever directed towards a miner’s economic and social impact, can this new gold rush capture the spirit of the early explorers in a more responsible manner? 

1848: first discovery and peak production 

Gold was first discovered on the banks of the American River in California by carpenter James W. Marshall in January 1848, and word spread quickly of the discovery. By the end of 1849, around 80,000 people had travelled to the area in search of gold, and the nascent industry helped merchant Sam Brannan establish himself as California’s first millionaire, selling mining supplies to the thousands of miners who flowed into the state. 

Production peaked in the decades following the discovery. In 1853, miners from as far afield as South America, Europe, and China are all reported to have made their way to the state, and the total value of the mining industry in the area is said to have reached half a million dollars between 1870 and 1880.  

The US National Park Service (NPS) reports that in the area that is now Joshua Tree National Park, 300 individual mines were established across the 3,200 km² region. 

One of the best-preserved mines in the park is the Lost Horse Mine, which was established in 1890 and produced around 10,000 ounces of gold, and 16,000 ounces of silver, between 1894 and 1931. The NPS estimates that the value of the minerals would be around $5m today; since the end of operations in 1936, the mine has become a popular tourist destination for travellers to the area. 

1930s: declining value of gold 

While some mines ceased production on their own – the Lost Horse Mine, for example, suffered from collapses and unstable infrastructure – others had production derailed by larger-scale challenges. One significant issue for many miners was the growing number of miners in the area, and the simultaneous decline in available and high-quality gold ore, which led to decades of increasingly desperate miners searching for increasingly sparse resources, helping no-one. 

Larger economic factors also made gold mining less financially viable. In 1913, the US Federal Reserve built the gold standard into its framework, setting the price for an ounce of pure gold at $20.67, and causing the rest of the world to follow suit.  

This inflexibility made it more difficult for gold miners to turn a profit on their products, a situation further harmed by the broader economic decline of the 1930s, which saw the relative value of gold fall to 70% of 1926 levels by 1934. 

After the Second World War, the value of gold rebounded slightly. The Bretton Woods system, implemented in 1945 to create the International Monetary Fund and serve as a precursor to the World Bank, set the price of gold at $35 per ounce, which remained in place until 1971. 

Still, this value set a de facto cap on the value of US gold, and domestic production suffered accordingly. Between 1945 and 1980, total domestic gold production never once exceeded 75,000 ounces, at a time where global gold production was soaring; in the 1940s, global gold production increased by 30% over the previous decade, growing again by 17% in the 1950s and 3% in the 1960s. 

20th Century: alternative industries 

While domestic gold mining declined in California, this is not to say that mining as a whole suffered the same fate. In much the same way that Brannan’s fortune came from building up a mining supply chain, there have been a number of mining-adjacent activities based in California that have kept the spirit of the earliest miners intact, if not the actual extraction of gold. 

Examples include Santa Ana-based Royal Manufacturing, which produces gold prospecting products and boasts patents for its mining equipment, and the well-established tourism industry, where 300,000 visitors have been reported at Stutter’s Mill alone. 

There has also been a range of work done to close mines and rehabilitate land damaged by mining, with local authorities eager to make former mine sites safer and less visually damaging. A report from the California State Lands Commission noted that, between 2002 and 2016, the body had worked with the Office of Mine Reclamation to close 61 “mine features” on lands owned by the state, alongside adding more than 100 warning signs and nine fences, at a total cost of $182,000. 

Much of this work has also been aimed at protecting local wildlife, with the construction of cupolas, box-shaped structures placed over the tops of holes, and bat gates, vertical barriers built to plug holes in walls and hills, aiming to keep both people and animals from becoming trapped in abandoned mines. 

2022: a return to mining? 

Despite these other practices, gold mining remains one of the most lucrative businesses in the world, and in California in particular. Fuelled by the strong performance of gold in general – the Wall Street Journal reported that inflation caused the price of gold to reach a five-month high last November – a number of companies are looking to open up, or reopen, mining operations in the state. 

Chief among these is the Idaho-Maryland mine, located in Nevada County, where Rise Gold is trying to restart operations. At its peak, the mine was the second-largest gold mine by annual production in the US, with a total production of 2.4 million ounces of gold.  

While Rise has not announced a specific gold production target for the mine as part of its planning applications, it has announced that it will target an average throughput of 1,000 tons of ore per day, a figure that would suggest the miner is looking to recapture at least some of the mine’s historic production. 

The miner also aims to make the most of more modern mining methods to minimise the project’s environmental impact. Rise claims that, should the mine be re-opened to its specification, the processes will produce half as much carbon dioxide per $1m of GDP produced, compared to the California average, and produce 90% less carbon dioxide and 95% less mine waste than the world’s average gold mine. 

Yet the mine could be set to experience another of modern mining’s phenomena: local opposition. While Rise has announced that the Nevada County Government has released what it calls a “highly favourable” environmental impact report, the work of local activist group Mine Watch would suggest that there are social and environmental issues with the proposed mine.  

The group claims that the mine will dramatically increase the burden on the area’s energy grid, with its power demands set to account for around 12% of the county’s total energy demand. It also notes that the miner plans to pump out 3.6 million gallons of water every day for six months, disrupting both local water and groundwater reserves. 

With both sides still waiting for a judgement from local authorities, it remains to be seen if gold mining will return to the hills of the first gold rush. 

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