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The Socioeconomic Impacts of Small Scale Mining

The following information is excerpted from the Final Environmental Impact Report on the Adoption of Regulations for Suction Dredge Mining of April 1994. This report was prepared by the State of California Department of Fish & Game. An Environmental Impact Report examines not only effects on the natural environment, but economic impacts as well.

SOCIOECONOMIC IMPACTS

The proposed project would result in a physical change to the environment. Where a project will result in physical change, CEQA allows a Lead Agency to examine economic effects of the project in order to determine whether or not the environmental effect of the project is significant (CEQA, Guideline Section 15131). In addition, State law requires state agencies proposing to adopt administrative regulations to assess the effects on jobs and businesses within California (Section 11346.54, Government Code). Thus, the following discussion is provided.

Prior to development of the ADEIR the Department developed two survey questionnaires to obtain information related to the economics of suction dredging in the State. The first questionnaire was sent to over 4,000 individuals. Nearly 2,000 of these were returned completed. These surveys provided information on many aspects of suction dredging including time and money annually spent on the activity, the location where people suction dredge, whether they were recreational or professional suction dredgers, the amount of money invested in suction dredging, what size nozzle(s) they used on their suction dredges and other pertinent information. The other survey was sent to county Boards of Supervisors, city Chambers of Commerce and mining businesses to determine the relative importance of suction dredging on local and manufacturing economies. Some of the information included in the following discussion was taken from those surveys. The surveys are referred to as the DEIR surveys. A sample of 1257 of the individual surveys were used to complete the statistical analysis.

Individual Income

An unknown percentage of suction dredgers may derive all their income from suction dredging for gold. McCleneghan and Johnson, (1983) found that approximately one half of the miners considered themselves professional as opposed to recreational. In the DEIR surveys 9.6 percent of those surveyed considered themselves commercial and 90.4 percent considered themselves recreational suction dredgers. The professional designation could mean that all or a portion of their incomes derived from mining activities or that the activities are designated as a business for tax purposes. Most recreational suction dredgers do not pursue the activity of suction dredging to supply a portion of their annual income. Such income comes from other sources. They simply enjoy the activity itself.

Suction dredging is an activity that requires a substantial investment. The DEIR surveys determined the average investment in suction dredge equipment by those surveyed was approximately 6,000 dollars. Suction dredgers spent an average of 35 days a year suction dredging. During that time they spent about 6,250 dollars each on expenses which included groceries, restaurants, motels, camp fees and other living expenses. In addition, they reported spending about 3,000 dollars each on gas, oil, equipment maintenance and repairs to suction dredge equipment.

Information obtained from public comments indicated the proposed suction dredge regulations in the first DEIR would have caused a significant impact to individuals, local communities and manufacturing and retail. The proposed regulations restricting nozzle size to 4 inches, prohibiting power winching, closing Wild Trout Waters, closing areas due to lack of enforcement capabilities, and phasing out special permits were all cited as the regulations which would cause undue economic impact. The Department responded to this issue by reevaluating the proposed regulations and proposing new regulations which would reduce the economic impact of the proposed regulations while still protecting fish and wildlife resources. The new proposed regulations restrict the maximum nozzle size nozzle size to 6 inches except on some large rivers where 8 inch nozzles would be permitted. From the DEIR surveys, the Department determined that less than 15 percent of suction dredgers surveyed use a nozzle size of larger than 6 inches. Most of these operators suction dredge on the large rivers on which an 8 inch nozzle would be permitted. Thus, there would not be a significant economic impact caused by the nozzle size restriction. In addition, the Department developed conditions which would allow power winching while still protecting fish and wildlife resources. The Department would only open Wild Trout Waters if suction dredging would not be deleterious to fish. The Department would issue special permits under circumstances where site specific suction dredging operations would not be deleterious to fish. Site inspections and site specific conditions for environmental protection associated with Special permits allow a higher level of environmental review than standard suction dredge permits. Finally, waters would not be closed to suction dredging based on a lack of enforcement capabilities. Thus, the new proposed regulations would not have a significant impact on the socioeconomic environment.

Local Communities

Suction dredging affects local communities by providing additional income to businesses located near popular dredging areas because miners from outside the local area would visit the local town to purchase goods and services from local merchants. Some suction dredgers live year round in these local communities while suction dredging, and therefore provide income to businesses in these communities throughout the year. This additional spending generates retail sales, income and employment in motels, restaurants, and retail stores. Given the figures cited above regarding the amount the surveyed suction dredgers annually spend, suction dredging can have a significant impact to small communities located in areas of high suction dredging activity.

Some individuals, usually from local communities, have businesses where they rent out their claim sites. The DEIR surveys indicated that 27 percent of those suction dredgers questioned are registered claim holders. These claim sites could represent the only open waters available to professional and recreational suction dredge miners. One individual may have claim to dozens of sites. These same businesses also rent equipment, conduct spot testing for gold, and hire out workers to work other claims for absentee investors.

Restrictions on suction dredging would affect the economy of local communities if all rivers located near these communities where suction dredging has historically occurred were closed. There may be a shift in use of rivers by suction dredgers and the businesses that support their operations.

Manufacturing and Retail

The manufacture and sales of equipment to conduct gold dredging operations produces an unknown amount of income to the persons and corporations involved in this industry. These activities occur away from the dredge site and their environmental effects are not discussed in this document. The proposed project would not substantially change the numbers or kind of equipment produced. Therefore, the adverse economic impact on this industry would be less than significant.

Growth Inducing Impacts

By its nature, and because of the mobility of suction dredge miners this activity does not usually result in the development of permanent facilities or significant changes in human populations. Although economic benefits do accrue and jobs are generated through suction dredge mining there are no directly identified growth inducing effects from suction dredge mining. The implementation of the proposed project would not result in additional needs for public services or facilities.