Mine Owner Prospects for Federal Dollars : Santa Clarita: He wants to use $6 million from the government for roads and equipment to mine a valuable ore. The U.S. Bureau of Mines has other ideas.

Phil Gillibrand guides his big white Ford sedan over unpaved San Gabriel Mountain roads like an old hand--even when the roads turn to rutted paths, or when trucks loaded with 100 tons of gravel come roaring around blind corners.

That’s no surprise: Gillibrand’s sand, gravel and asphalt company, P.W. Gillibrand Co., has been operating in the Santa Clarita Valley at the foot of these mountains for 23 years.

It is a surprise, though, that Gillibrand seems nearly as deft steering bills through Congress. The 52-year-old , whose company is headquartered in Simi Valley, is responsible for getting Congress to earmark $6 million of the $286-billion fiscal 1990 defense appropriations act for one of his pet projects.

The money, for a demonstration project to mine titanium from his claims in the mountains about 25 miles northwest of downtown Los Angeles, shows how even a fairly obscure company like Gillibrand’s $25-million-a-year operation can use grass-roots politicking to move the federal government.

But Gillibrand’s quest for what he calls a government “hand not a handout” isn’t over yet. In fact, there’s a hitch.

Saying he has borrowed as much money as he can in order to spend $10.5 million on the project to date, Gillibrand proposes to use the $6 million from the government to build roads and equipment to make the mining possible at the claims near his rock and gravel operations.

But the U.S. Bureau of Mines has other ideas: It wants only to study the ore deposits and decide whether they can be profitably made into various titanium products. The agency isn’t in the business of helping mining companies make capital improvements, a spokesman said.

Titanium has two main uses. Turned into a metal, it is used in planes and spacecraft to make them light and durable. Processed another way, titanium is an important component of white paint and pigments that are used to coat the pages of glossy magazines.

His political odyssey--reported by the Washington Post about two weeks ago--began after Gillibrand approached the California State Commission for Economic Development for help with the mining project in 1988. The state agency, however, told Gillibrand that his best shot for assistance was with the federal government.

In 1988, with the agency’s help, Gillibrand drew up an unsolicited proposal for $15.8 million in aid from the U.S. Department of Commerce.

Gillibrand said his 537 mining claims, which are within the boundaries of Angeles National Forest, could contain 100 million tons of ilmenite, an ore that can be processed into titanium. He figures he could mine and process about 100,000 to 400,000 tons each year. Gillibrand said recently that 100,000 tons of ilmenite would be worth about $7 million a year in revenues.

Before the funding proposal went to the Commerce Department, it went to U.S. Rep. Vic Fazio (D-Sacramento) and a few other congressmen.

Gillibrand got Fazio’s interest in the project when the congressman learned that the United States is heavily dependent upon foreign sources of the ores that titanium is extracted from, a Fazio spokesman said.

And since titanium metal is important for military aircraft, Fazio persuaded the then-chairman of the military appropriations subcommittee in the House to insert $12 million for the project in the 1989 House military budget. After negotiations with the Senate, the amount was halved to $6 million.

But that was hardly the end of the process. According to the $6-million line item, the U.S. Department of Defense was supposed to administer the mining project. But the DOD couldn’t find any titanium metal producers interested in using ore from the Gillibrand claims for their titanium metal plants, according to John D. Morgan, acting director of the Bureau of Mines. The Defense Department didn’t push the project forward.

So in the next Defense Appropriations Act--passed in the fall of 1989--Fazio added language calling on the Bureau of Mines to administer the money. Now the problem, from Gillibrand’s point of view, is actually getting his hands on the aid.

Pointing out that the United States imports about 81% of the titanium ores it uses, and saying that his other potential sources of financial assistance are all foreign, Gillibrand makes a nationalistic argument that the Bureau of Mines should press forward quickly.

But the Bureau of Mines doesn’t think that the importation of titanium ores is a problem. “There are ample raw materials and processing in this country,” Morgan said.

Gillibrand has had more luck convincing elected officials of the importance of his titanium mining claims.

Gillibrand, for instance, has had help from Rep. Elton Gallegly (R-Simi Valley). Some of Gallegly’s staff have been in contact with the Bureau of Mines “in an attempt to bring all sides together,” said Gallegly spokesman John Frith. “This is a national security issue,” Frith said.

Gillibrand hired O’Neill & Athy, a Washington law firm, to help him find his way through the government and political maze. And he’s long retained a local firm, Frank Cullen & Associates, to help him deal with local and county governments.

Gillibrand has made three trips to Washington to press his case: once to see Department of Defense officials, once to visit the Bureau of Mines, and once to meet with Gallegly, Fazio and congressional staffers.

And other officials--from then-President Ronald Reagan’s interior secretary, William Clark, to Sen. Jeff Bingaman (D-N.M.), who chairs the Senate subcommittee on mineral resources development and production--have come to see his rock and gravel operations.

Gillibrand, meanwhile, contributed $1,700 to Gallegly’s campaign and $500 to Fazio’s for the 1988 elections, according to documents on file with the Federal Election Commission (FEC). And he gave Gallegly’s campaign $1,000, and Fazio’s $500 for the most recent 1990 elections, according to the FEC. Gillibrand also gave a total of $2,000 in the last three years to the campaign of New Mexico’s Bingaman, the documents show.

Spokesmen for Fazio and Gallegly said there was no connection between the contributions and the congressmen’s help for Gillibrand. A spokesman for Bingaman told the Washington Post that the senator has done nothing more than visit Gillibrand’s Santa Clarita operation.

And Gillibrand said he merely sends money to the campaigns of the politician best suited for the job.

He also points out that he makes lots of other contributions. In fact, FEC documents show he made more than $11,000 in contributions to federal elected officials from 1987 to date--to politicians including U.S. Sen. Pete Wilson (R-Calif.) and Sen. John H. Glenn Jr. (D-Ohio). Gillibrand said he has also contributed to campaigns for Mayor Tom Bradley and to supervisors in Los Angeles and Ventura counties.

But all of Gillibrand’s ventures into politics and government--which he doesn’t like to call lobbying--haven’t yet brought him the aid he wants.

“There’s an argument between the Congress on one side and the Administration on the other,” said Gillibrand. “I’m sitting in the middle.”