Former South Dakota Gold Mine Still Worth Millions

"If our children are to have the kind of jobs we want them to, this type of facility is one of the finest advantages we can give them for many generations," said South Dakota Governor Mike Rounds in his 2004 State of the State Address on Tuesday.

The governor is urging legislators to approve plans to help transform an exhausted 8,000-foot-deep gold mine into a one-of-a-kind national laboratory to study subatomic particles.

Since May 2003, the National Science Foundation (NSF) has considered the Homestake Mine to be the preferred location nationally for the Deep Underground Science and Engineering Laboratory, according to the governor's office. The deal is not closed, however, because of several outstanding issues, including ownership, indemnity, structural integrity and financing. NSF could still decide not to establish the lab at all.

Progress toward creating the underground lab in South Dakota moved a step forward this week when Gov. Rounds signed an agreement in principle with the mine's parent company. The agreement outlines the conditions and timeline for the transfer of the former Homestake gold mine in Lead, S.D., to an authority created by the state. Homestake, which had been in operation for 125 years before closing in 2001, may now be within 18 months of reopening.

Under Gov. Rounds' proposal to the Homestake Mining Company, the to-be-created South Dakota Science and Technology Authority (SDSTA) would acquire, develop and maintain facilities needed for scientific experimentation and technological development. It takes an act of the state legislature to establish the Authority, but once done, SDSTA also would be able to take the steps needed to indemnify Homestake from future potential liabilities caused by the operation of the underground laboratory. The agreement signed with Homestake calls for a combination of commercially-available insurance and the establishment of a long-term escrow account to secure indemnification.

At least $10 million, provided via a federal grant, already is in line for the proposed $146.4 million project, the Associated Press reports. Gov. Rounds has asked the legislature to approve another $10 million. The $20 million will be used to drain the mine and refurbish electrical and air systems, according to the Aberdeen American News. In all, the state would contribute $34.1 million under Gov. Rounds' plan, including $11.4 million for administration, insurance and initial operating expenses during the first three years, the AP reports.

An additional $115-120 million would be required to transform the mine into a world-class lab. New reports suggest the SDSTA would be able to issue bonds for the work. The bonds "would be paid off by NSF as part of the cost of conducting experiments," according to an AP story.

“This cooperative effort sends two clear messages to the National Science Foundation and the scientific community," said Gov. Rounds in a press statement. "First, that the best location in the United States for an underground science lab is available for development, and second, that South Dakota will do what it takes to make the lab a reality.”

The state legislature is to consider the legislation necessary to implement the transfer on Jan. 20. Survey results released earlier this week by the AP show nearly three-quarter's of South Dakota's responding legislators support Gov. Rounds' plan. More information about the Homestake Laboratory Conversion Project is available at http://www.state.sd.us/homestake/.