ONTARIO -- Sprawling

could soon be in the spotlight as a mining hub -- or a battleground of

and

mining interests vs. environmentalists trying to protect its lonesome sagebrush landscape.

Australian-owned Oregon Energy LLC hopes to mine 18 million pounds of yellowcake uranium from the southeastern Oregon high desert 10 miles west of McDermitt near the Oregon-Nevada boundary. The go-ahead to mine the so-called Aurora uranium deposit could bring up to 250 construction jobs to the county, followed by 150 mining jobs.

Meanwhile, Calico Resources USA Corp., a subsidiary of a Vancouver, B.C., company, may seek permits this month to chemically extract microscopic gold from a high desert butte south of Vale called Grassy Mountain, a project likely to create another 100 jobs.

Mining history

Gold:

Mining once was a major part of Oregon's economy and the most sought-after mineral was gold. Since its discovery in Oregon in the mid-1800s, miners have wrested an estimated 5.5 million ounces of gold from the state's streams and underground "hardrock" mines. At today's prices, that gold would bring about $1,616 per ounce. Half to two-thirds was found in northeastern Oregon. Baker County and Josephine County have had the most active claims.

Uranium:

Uranium was first discovered in Oregon in the 1930s and a small amount was mined on Bear Creek Butte, 40 miles southeast of Bend, in 1960. The White King and Lucky Lass mines near Lakeview came later and there are known deposits of uranium in Baker, Clackamas, Crook, Curry, Harney, Jackson, Lake, Malheur, Polk and Union counties.

The proposals will be the first real test of the 1991 chemical processing mining law passed by the Legislature in response to a debate over mining's future in Oregon, said environmentalist Larry Tuttle. The law ushered in tough new bonding requirements to weed out marginal operators and guarantee environmental cleanup.

Approval of the Grassy Mountain project could trigger a deluge of new chemical mining in Malheur County. Up to a dozen gold deposits similar to Grassy Mountain dot the high desert between the Snake River town of Huntington and Jordan Valley.

The county, sparsely populated with only 31,313 people, could use new jobs, said County Commissioner Dan Joyce. Its unemployment rate in November was 10.3 percent, compared with 9.1 percent for Oregon and 8.6 percent for the nation.

Mining companies have passed up the county in the past because of Oregon's environmentally conscious reputation, Joyce said. But this time, the sluggish local and state economies, higher mineral prices and technological advances in mining and cleanup could open a door to mining, he said.

"I'm thinking people are a lot hungrier now than they were," Joyce said.

Uranium mine plan

Oregon Energy's proposal calls for extracting ore from a mile-long, 600-foot wide, 250-foot deep open pit 10 miles west of McDermitt and 3 miles north of the Oregon-Nevada border. The mine, adjoining the former Bretz Mercury Mine, a contaminated open-pit site from the 1960s, would cost $200 million to develop and uranium extraction could continue for up to 20 years, said Oregon Energy President Lachlan Reynolds.

Plans call for the ore to be crushed and mixed with an acid solution in enclosed vats to leach out the uranium, he said. The acid would bond with the uranium and when dry become a sand-like powder called uranium oxide concentrate, or yellowcake. Yellowcake would bring $52 per pound and could fuel nuclear reactors or be processed into weapons.

Tuttle, spokesman for the Portland-based

, foresees environmental problems.

The likelihood of sulfuric acid being used in processing the ore means it could remain in the mine tailings after milling, he said. The snag is that sulfuric acid tends to continuously leach out heavy metals that occur naturally in waste rock and tailings, contaminating ground water.

"Just because you are through with the processing, years later you still have the issue with that interaction," he said.

But probably the biggest environmental hurdle for the Aurora mine would be the release of mercury, Tuttle said. "The whole Owyhee Reservoir has been affected by naturally occurring background mercury," and uranium mining could release more, he said.

Gold mine proposal

Environmental considerations first thrust Grassy Mountain into the consciousness of Oregonians in the late 1980s and early '90s when Newmont Gold Co. proposed introducing Nevada-style open-pit cyanide heap-leach gold mining there.

Low gold prices ultimately prompted Newmont to write off its $33.8 million investment and abandon plans to mine Grassy Mountain in 1995, but only after the site came to symbolize the conflict between economic development and environmental activism in eastern Oregon.

Calico Resources would take a dramatically different approach, said Andrew Bentz of Ontario, spokesman for Calico. The company proposes to sink an 850-foot underground shaft or tunnel to remove 1,000 tons of ore per day from Grassy Mountain, he said.

The operation expects to remove at least 425,000 ounces of gold from the mountain. The company's investment and exploration costs probably will total $100 million before mining begins, said Calico project manager Andy Gaudielle.

Mineral-bearing rock would be milled for microscopic gold in a closed chemical process that wouldn't include the bird-attracting open settling ponds of diluted cyanide that worried Newmont's opponents, said Bentz, a retired Malheur County sheriff.

Mining and reclamation of Grassy Mountain would take about 12 years, unless new gold discoveries are made, he said.

Bentz believes Calico won't face the level of environmental opposition that attended Newmont's proposal.

Reynolds, the Oregon Energy chief, said mining companies no longer can operate in ways that caused the environmental problems of the past. Improvements in mining technology result in more efficient and environmentally responsible operations, he said.

"We will have to post substantial financial bonds to ensure that there is full reclamation of the site to an approved plan when mining ends," Reynolds said.

Only 5 percent of the nation's domestic-use uranium is produced within U.S. borders, although the United States takes more than 20 percent of its electricity from nuclear power plants, Reynolds said.

The most likely buyer of Aurora uranium would be a U.S. electricity utility, he said. He estimated the mine could become the source of up to 30 percent of uranium produced in the U.S.

What's next

Public hearings will be held after the companies apply for permits to begin mining, said state geologist Vicki McConnell of Portland.

Sixty-one acres of Grassy Mountain is patented, private mining land, but substantial portions of both sites are on federal land administered by the U.S. Bureau of Land Management. Both sites are remnant volcanic regions where geothermal and hydrothermal activity has pulled heavy metals and other substances close to the surface, McConnell said.

Calico hopes to begin taking gold from Grassy Mountain in five years, but the regulatory pathway is likely to be longer for the Aurora mine because uranium is involved.

In addition to the

, the Oregon Energy Facility Siting Council, the U.S. Department of Energy and the federal Environmental Protection Agency must review the uranium mine.

BLM permits will be required for tailing piles and the use of desert roads for both the uranium and gold mining.

Oregon has a process in place to allow mining to proceed if resources can be extracted profitably and in a way that's environmentally safe, McConnell said.

Whether that's the case here has yet to be determined, she said. "Geologically, we know there is gold in Grassy Mountain and we know there is uranium in the McDermitt area," she said.