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April 1992

State Roundups
South Dakota

Heartland expressway closer to a reality

When President Bush signed a $151 billion transportation bill earlier this year, many South Dakotans cheered. Included in the bill is initial funding for the Heartland Expressway that would link Interstate Highways 90 and 80.

The proposed route would run from Rapid City, through Scottsbluff, Neb., and south to I-80 via an existing two-lane road upgraded to a four-lane, limited access highway.

Funding includes $640,000 for a corridor study to determine the best route. Scheduled to get under way this summer, the study will take about a year to complete.

In addition, Congress approved $29.6 million for construction spending over the six-year life of the appropriations bill. While this is just a fraction of the $170 million to $210 million needed to complete construction, Chuck Vanderziel, Black Hills Council of Local Governments economist and coordinator of the expressway task force, says it is a good start. And he adds that South Dakota and Nebraska are cooperating in planning and funding.

"It's going to develop a whole new area of commerce," says Robert DeMersseman, president of the Rapid City Economic Development Partnership. The new expressway will expedite distribution of South Dakota's agricultural products. Vanderziel says it will be a boon for shippers to the cattle feedlots and slaughter facilities in Ft. Morgan, Neb., located on I-76 directly south of Rapid City and I-80.

Black Hills tourism will likely benefit from the new expressway, too. "Right now the AAA in Denver doesn't route travelers directly to Rapid City," Vanderziel says. "They almost have to say, 'you can't get there from here' because there is no easy route."

A new highway is not the only piece of transportation on the drawing board. Actor Kevin Costner and his brother have unveiled plans for a $35 million resort and conference center in Deadwood that includes a 53-mile rail link to the Rapid City airport.

—Kathy Cobb

Black Hills gold production dips

"Black" typically describes the hue of the mountains in western South Dakota, but these days it may be more descriptive of the mood that hangs over the state's gold industry.

Production figures for 1991 indicate South Dakota gold production dropped about 8 percent, from 570,648 ounces produced in 1990 to 525,479 ounces in 1991. Added to the decline in production was a decrease in the gross value of mined gold.

According to Thomas V. Durkin of the state Department of Environment and Natural Resources, the drop in production, coupled with a decline in the yearly average price of gold, amounted to a 12 percent decrease in the estimated gross value of the gold produced in the state. In 1991, an estimated $190 million was produced compared to the $215 million produced in 1990.

"The decline places South Dakota fourth among the gold producing states behind Nevada, California and Utah," Durkin says. Last year South Dakota ranked third, and at one time was the nation's leading producer of gold. All the state's gold mines are located in the Black Hills.

The effort needed to extract the gold ore has increased dramatically over the years for Black Hills miners. In the late 1800s, miners were able to pull over 170,000 ounces of gold from the Hills using only shovels and picks. Even in the 1960s, the grade of the ore remained relatively high. But today, finding the lower-grade ore demands more costly mining methods.

And world gold prices have not aided Black Hills gold miners. From a recent high average of $446.45 per ounce in 1987, prices dropped to $360.69 in 1991. For most companies, a gold price of $400 per ounce is the target on which plans and estimates are predicated. Pete Goodwin, personnel and governmental affairs director for Brohm Mining Corp. in Lead, says, "Since gold is a commodity that can widely fluctuate, we will have to adjust our mining programs. Mining companies will have to learn to live at about $350 [per ounce] and make do."

In order to survive, mining operations are tightening their belts. Homestake Mining Co., the area's largest operation, will continue expansion of existing mines but is waiting to proceed on an operation to reprocess old tailings. Goodwin indicates that Brohm Mining has put its expansion plans on hold. "We'll give greater attention to maintenance of existing machinery rather than purchasing new equipment, and we'll tighten our belt, consolidate our position and watch expenditures to get by."

Nevertheless, gold mining in the Black Hills will not remain at a standstill. Durkin's report indicates that in 1991, 2,236 test holes were permitted to be drilled, a 16 percent increase over the previous year.

—Dean Davis