County makes little progress on mining lease

Jan. 21, 2010
County commissioners say they want to come to an agreement with Oregon Resources Corp. to allow the firm to mine chromite on county forest lands. But they aren't sure it's worth the toll on county resources.
After several years of negotiating, it doesn't appear the county and company have made much progress on resolving negotiations.
"It's far more important that we take our time," Coos County Commissioner Nikki Whitty said. "I have no idea when we will have something finalized."
Whitty said she's concerned the county will lose revenue from lost timber sales on strip-mined land. Commissioner Bob Main doesn't think Oregon Resources is offering a fair share of the profit. Commissioner Kevin Stufflebean wants to make sure the firm intends to mine minerals and isn't just trying to attract investors.
Oregon Resources wants permission to explore and possibly mine chromite on 6,000 acres of county-owned forest in the Beaver Hill area between Charleston and Bandon. If the company decides to mine in areas already being harvested, it probably wouldn't affect timber sales, however, if it clears forest prematurely it could impact the county's sustainable yield.
The Oregon Department of Geology and Mineral Industries issued Oregon Resources a permit last month to mine 1,800 acres of land it's leasing from Weyerhaeuser, which owns 203,000 acres in Coos County. The permit comes with specific conditions the mining firm must follow to ensure the land is able to grow marketable timber again.
The county owns 15,000 acres of forestland, which bring in $3 million to $4 million a year in revenue from timber sales. Although, it did not have a sale last year and may not again this year.
"There are a lot of ifs," Main said in reference to timber sales.
Main said Oregon Resources has offered to pay the county 3 percent of receipts from minerals mined on county land. Commissioners want to get paid on the gross sales, not net receipts. Still, Main is not convinced that is a fair price.
Stufflebean, who worked on road-use negotiations with the company, has declined to be interviewed by The World about this latest issue. He would only comment by e-mail, saying exactly:
"I won't make my decision on we 'think' it is going to produce this much income and if they do lease land j would like a clause that they have to start mining by a specific time frame and not just trying to tie up land in leases to attract investors," Stufflebean wrote.
Main said it doesn't make sense to forfeit timber if minerals are not found.
"What would stop the county from hiring our own miners?" Main said. "It seems light to me. Why couldn't we just do it ourselves?"
Since 2006, the two entities have been playing pingpong, bouncing draft proposals back and forth.
"Every time they send one we make changes then send it back," Main said. "It really hasn't progressed very far."
The county has hired Roseburg lawyer Ron Yockim to handle negotiations.
"Different language is being battered back and forth," Yockim said, who did not discuss specifics. "It's a lot of policy stuff and what is the best use of the county's resources."
In 1991, the county and Oregon Resources signed a three-year exploration agreement giving the company the option to lease 1,447 acres. The company never did any digging, but it renewed a similar contract for an additional three years in 1994. Still, there was no exploration.
There were never any royalties associated with the agreement, only flat lease fees.
Oregon Resources originally only asked for access to 2,000 acres when it reopened negotiations several years ago, but last February increased that request to 6,000.
A previous article in The World reported that Dan Smith, the company's chief operating officer, told the commissioners at the time, "If we don't get this, we're heading south to Curry County."
But Curry County Commissioner Bill Waddle said no one has contacted him and he hasn't heard of any mining proposals involving private land owners.
Smith refused to comment, and Oregon Resources' president Cheryl Wilson did not return The World's phone calls.