Proposed gold mine and route to haul the ore could clear final regulatory hurdles this year

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BUTTE, Montana — At a time when local officials are trying to grow manufacturing in Butte-Silver Bow County, one of the area's top prospects for adding jobs this year is in the sector that dominated for decades - mining.

A proposed gold mine in the Highlands and a route to haul the ore could clear final regulatory hurdles this year, and if so, infuse some juice into a local economy that has stalled somewhat the past few years despite being more diversified and stable than past decades.

It could mean 55 primary jobs and 125 or more secondary jobs for the area.

"It's in a basic sector so all the money coming in is from outside the local economy," said Gary Rowe, chief financial officer for the Montana Economic Revitalization & Development Institute (MERDI). "The multiplier effect in mining or other basic sector jobs is really high."

Indeed, no sector pays higher wages in Butte-Silver Bow County than natural resources and mining, with an average wage of $84,878 as of June 2013, according to statistics compiled by NorthWestern Energy economist John Kasperick.

Federal government jobs ranked second with an average wage of $61,277, followed by manufacturing at $53,357. They are all well above the average wage of $35,575.

Few would turn down the mining jobs, but local leaders are focusing more on efforts to grow manufacturing. Kasperick says base industry expansion is needed to continue economic growth in Silver Bow County over the long-term.

Butte-Silver Bow Chief Executive Matt Vincent agrees.

"Mining is a very important sector of the economy, but it's finite," Vincent said. "We've been putting a lot of focus on manufacturing. Those are the only jobs that can compete with these mining wages."

Manufacturing employment in Silver Bow County totaled 636 in 2014, trailing six other industry sectors, according to Kasperick. The trade, transportation and utilities sector led the pack with 3,561 employed, followed by education and health at 3,448.

Manufacturing jobs have remained virtually flat the past three years, but Jim Smitham, executive director of the Butte Local Development Corp., says there are reasons to look up.

Renewable Energy Corp., which laid off 26 employees from its plant southwest of Butte in November 2013, has added several jobs since then, Smitham said.

The Norway-based company, which makes solar and silicon products for the electronics market, blamed the layoffs and 34 more elsewhere on market weakness and a complex trade war between the U.S. and China.

The move left the Butte plant with 267 employees, but at least three jobs were added this past November and the company was looking to fill four more positions.

Smitham says the future of SeaCast Inc., which operates a casting foundry in Butte, appears positive. Its workers in Butte handle molten steel and fabricate custom metal products for various industries, including aerospace.

"One of their limiting factors is being able to get welders who are qualified that can help them produce their products for GE's high-efficiency jet engines," Smitham said. "So if they can find a good source of welders to be trained and come into the workforce . I think their future is bright."

GE is extremely pleased with the quality of work being done in Butte, Smitham said, "and they want to push as much of their manufacturing to the Butte facility as they can."

With help from a federal grant, the Montana Center for Manufacturing Technology has been established at Butte's industrial park to help small manufacturers bring their products to market. There are seven of them in the "incubation" stage now, he said.

Butte's tax-increment financing industrial district hopes to build a 20,000-square-foot building that could house several small manufacturers with water and other utilities ready to go.

"It's in the planning stage but it is moving forward," Smitham said.

But the proposed gold mine in the Highlands could bring the most new jobs to the area the quickest. It took another step toward getting permitted in late December when the Montana Department of Environmental Quality issued a final environmental impact statement on the mine.

The agency hoped to have a ruling on a hard-rock mining permit by the end of this month and the U.S. Forest Service says it could rule on sanctioning a hauling route by mid-May. The county has been involved in that permitting process.

Several major employers in Butte have signed off on a resolution urging the Forest Service and county to complete that process in hopes that mining operations could begin this summer, according to MERDI.

An industrial hard rock garnet mine is now operating near Alder, about 70 miles southeast of Butte in Madison County, after clearing the permitting process last year.

Madison County commissioners approved a nine-year tax abatement program for its operators, Garnet USA, LLC, saying the long-term benefits of an expanding industry will outweigh the short-term loss in tax revenue.

Jim Hart, chairman of Madison County Commissioners, said the mine now employs about 60 people.

"We look forward to them being quite successful, not only in terms of what they do but also in keeping folks employed here," Hart said. "We are confident that it's adding to local residents' paychecks and a lot of people will stick around here and educate their kids here."

Jim Kambich, president and chief executive officer of MERDI, said investors have spent about $30 million, including costs for a water treatment system, on the pending gold mine in the mountains about eight miles south of Butte.

The project is a partnership between Timberline Resources Corp., and ISR Capital, a private investment and merchant banking firm based in Boise, Idaho.

Rowe and Kambich say if the mine gets final regulatory approval, it could lead to more mining operations across southwestern Montana.

"There are a lot of eyes on Montana right now," Kambich said.

Information from: The Montana Standard,

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