Beneath a rural canyon just outside of Santa Clarita lies an estimated 56 million tons of sand and gravel worth $336 million.

But getting at the bonanza promises to pose a problem for Transit Mixed Concrete Co., which wants to mine the material in Soledad Canyon to make aggregate for ready-mix cement.

In addition to concerns by neighbors about the dust, noise and truck traffic that a mining operation would bring, the project has Santa Clarita officials worried because of its location just two miles east of the city.

Over the past decade, Santa Clarita has annexed six neighborhoods to the east, pushing its border ever closer to the mine site. If the project proceeds, city officials fear it could crimp the city’s ability to develop farther to the east.

“The issue is looking at the big picture and understanding where residential growth is going,” said Jeff Lambert, city planning director. “We expect in time the whole valley will be city.”

The area near the mine could well become a mix of sparse residential and commercial something that won’t mix well with a sand and gravel operation, Lambert said.

But officials with Transit Mixed, a subsidiary of one of the nation’s largest aggregate firms, Houston-based Southdown Inc., say the city is literally overstepping its boundaries.

“The point is, this is county jurisdiction. It’s a county industrial-rural area, not a city residential area,” said Brian Mastin, spokesman for Transit Mixed. “We’ve looked in four different counties for locations and did not find a location with a lower amount of residential (density).”

The site, meanwhile, was designated by the California Division of Mines and Geology as a significant construction mineral resource area, making it more suited for a mine than housing, Mastin said.

Further, the California Department of Conservation estimates that San Fernando Valley’s aggregate supply will run out by 2001. If a nearby alternative source isn’t found, the closest mine will be in Palmdale, and could drive up the price from $6 a ton to $9 a ton because of shipping costs.

“Typically that’s an issue,” said Mark Oldfield, a spokesman for the California Department of Conservation. “The stuff’s heavy, hauling is expensive, and it chews up the road.”

Santa Clarita officials aren’t questioning the need for concrete they just don’t want the mine in a planned residential area.

Lambert said several residential developments are in the planning stages for the area surrounding the proposed mine, and most, if not all, will eventually seek annexation to the city. A surface mine would not only be a visual blight, it would raise concerns about noise and dust.

City officials outlined their concerns in an 18-page letter to the county Regional Planning Board, criticizing the project and its environmental impacts.

While Santa Clarita has no legal jurisdiction over the proposed mine area, the city’s general plan does deal with the entire valley. But the city was already turned down by the Local Agency Formation Commission on its bid to include Soledad Canyon (the site of the proposed mine) in the city’s sphere of influence, Mastin said. And a state report outlining compatible land uses for the area makes no mention of homes.

For now, the Soledad Canyon site is an open sore, with rusted mining equipment remaining from previous gravel companies and an open mountainside that has never been replanted.

Santa Clarita officials worry about the impression a gravel mine at the city’s gateway would give first-time visitors and residents. “It’s a stable, relatively pristine residential community,” Lambert said. “We’re concerned that (the mine is) pretty ugly from an aesthetic perspective.”

But Mastin said the company has worked with county planners to minimize the visual impact. After the company operation is finished, it would replant the area and return it to open space.

The company plans to open the mine in 2000, if it wins county approval.

In 1989, Transit Mixed won a contract from the Federal Bureau of Land Management to mine the 500 acres of federal land, for which it will pay $28 million. Most of the money paid to the bureau will be earmarked for regional projects. The state will receive $1.1 million, half of which would go to Los Angeles County.

Six other mines are in operation within a mile of the proposed Transit Mixed site, though they are all smaller operations. The Soledad Canyon site had been mined previously by Curtis Sand & Gravel from 1968 through the 1980s.

Area residents have joined with the city to oppose the mine. At a recent community meeting in Pinetree, 150 residents showed up to express concerns and ask questions about the mine.

Mastin said the company has agreed to widen the road to reduce traffic, put up a berm to cut noise, and to reduce dust by placing an adhesive chemical on the road surface,

Lynne Planbeck, of the Santa Clarita Organization for the Planning Environment, said she is concerned about the dust and noise the mine will generate and the amount of water Transit Mixed plans to use.

“If they need aggregate, it’s not something you do in a residential area,” Planbeck said. “They haven’t done enough mitigation.”