National Academies report says Virginia gold mining regulations are inadequate

With exploration for gold continuing in Buckingham County, a report by the National Academies of Sciences, Engineering and Medicine found Virginia’s current system of regulating gold mining “is not adequate to address the potential impacts” of commercial extraction. 

“Virginia’s regulatory framework lacks an adequate financial assurance system, which poses a fiscal and environmental risk to the commonwealth. Additionally, Virginia lacks opportunities for a diverse public to be engaged in permitting processes and a modern system for review of environmental impacts from potential gold mining projects,” concluded the consensus report. 

“These and other portions of Virginia’s regulatory framework fell short in comparison to other states, the federal government, and modern best practices,” the authors wrote. 

The report, which has been almost a year in the making, was the product of a 2021 law carried by Del. Elizabeth Guzman, D-Prince William. 

An earlier version of the legislation would have temporarily banned gold mining until July 2023, but lawmakers stripped that provision out of the legislation following opposition from the forestry and construction industries. 

Gold mining hasn’t been conducted on a commercial scale in Virginia for decades, but it became an unexpected political issue in 2021 after Buckingham County officials discovered Canadian gold mining company Aston Bay Holdings was conducting exploratory drilling in Buckingham County. 

Environmental groups argued state regulations governing gold mining weren’t sufficient to handle the impacts of commercial extraction. 

In particular, they pointed to a host of environmental violations by the Haile Gold Mine in Kershaw, South Carolina, including discharges of cyanide and thallium, a toxic chemical that can cause major organ damage. 

Haile is the only active commercial gold mine east of the Mississippi, and it has been cited by Aston Bay in investment materials as an “analogue” of its Virginia discoveries, although company CEO Thomas Ullrich told the Mercury in 2021 that the amount of gold the company had found in Virginia was “much less than 1/50th the size of Haile.” 

Ullrich defended state regulations at the time as “robust and proven” and said Virginia had “aggressive bonding requirements.” 

The National Academies report disagrees, finding that Virginia’s “current regulatory system lacks an effective and consistent process for review of environmental impacts from potential gold mining projects.” 

“As a result, it is unlikely that a robust collection, evaluation, and review of site-specific data regarding potential impacts of gold mining activities and their impact on the public health and welfare of surrounding communities will take place,” it states. 

The report notes that unlike other states, Virginia doesn’t require baseline studies against which environmental impacts can be measured. It also doesn’t require review similar to what federal agencies must carry out under the National Environmental Policy Act to assess the environmental impacts of gold mining on private lands, where most gold mining in Virginia is likely to occur. 

In addition, Virginia doesn’t require permits for processing facilities located away from the extraction site or for exploratory drilling. 

Ullrich told an analyst during a November 2021 interview that Virginia’s lack of permits for exploratory drilling was “definitely one of the reasons why we want to be in that jurisdiction.” 

“In Virginia, you know, it is in the state regulations, exploration drilling is, you know, explicitly not mining, and you don’t need a permit,” he said. “So it allows you to get in there and drill responsibly, as always, of course, but you don’t have to wait for those permits. And that’s a significant advantage.” 

The National Academies also found that Virginia’s bonding requirements — which call for operators to put down a certain amount of money that the state can use to conduct environmental cleanup in case the business goes bankrupt — are “insufficient” to cover long-term cleanup costs. 

Finally, the group dinged Virginia for “inadequate” public engagement requirements that “compare unfavorably with other states, the federal government, and modern best practices because they require the provision of limited information, place the burden of public notification on the mine permit applicant, and apply only to a limited scope of recipients.” 

The report recommends that the General Assembly and state agencies update Virginia’s laws and regulations to protect against the potential impacts of gold mining. 

A webinar on the report’s findings will be held Wednesday afternoon. A separate committee of state agency representatives reviewing issues related to gold mining will meet Thursday. That committee is preparing a companion report, which is currently in draft form.