Proposed bentonite mine takes next step; Homestake bond raised

A state board approved a step forward for a proposed bentonite mine and increased the required bond amount to protect the state from expenses related to a closed gold mine.

The Board of Minerals and Environment, consisting of nine members appointed by the governor, met in a telephone conference on Thursday.

Texas-based Bentonite Performance Minerals won approval of its contractor for a required socioeconomic assessment of the effects of the company’s proposed bentonite mine. The contractor is the global environmental consulting firm SWCA. 

The Larsen Mine would be 7 miles northwest of Belle Fourche. Meeting materials included a letter from the company that said it will seek a mine permit “in the near future,” which, if approved, would be the fourth South Dakota mine permit granted to the company in the last 10 years.

Bentonite is an absorbent clay used in products ranging from cat litter to drilling fluid. It’s been mined in the Belle Fourche area and nearby areas of Wyoming for decades. Bentonite Performance Minerals owns a processing plant just across the border from South Dakota in Colony, Wyoming, and another plant in Lovell, Wyoming, just west of the Bighorn Mountains.

Bentonite is thought to be the product of volcanic ash that settled into an inland sea millions of years ago and was buried under layers of earth. It’s mined by scraping away the earth, removing the bentonite, and then refilling the pit.

South Dakota has taxes on some mined materials, such as gold. But the state does not have a tax on bentonite production, while some other states including Wyoming and Montana do.

Bentonite Performance Minerals currently has two active bentonite mine permits in South Dakota while another company, American Colloid, has eight, according to state officials. All of the permits are in the Belle Fourche area.

Homestake bond

Also Thursday, the Board of Minerals and Environment approved a change to the bond that the Homestake Mining Company is required to maintain. 

The bond is intended to cover expenses the state would incur if the company — now a subsidiary of Barrick Gold — ever fails to continue water treatment and other activities necessary to contain environmental damage from the former Homestake Mine in Lead. The mine, consisting of a vast system of underground tunnels and a massive above-ground pit, closed in 2002. Part of the mine now houses underground science experiments.

Due to inflation and other factors, the board agreed with a recommendation from the staff of the Department of Agriculture and Natural Resources to increase the required bond amount. This year’s amount will change from $61.2 million to $80.2 million, an increase of $19 million. The board also reviewed a schedule of annual increases planned through 2027, when the former mine’s next five-year review will occur.

EDITOR’S NOTE: This story has been updated since its original publication with additional information from state officials about active bentonite mine permits and production.