A three-judge panel upheld Summit County 's rule against the technique, rejecting a challenge by the Colorado Mining Association.
The ruling means similar bans can remain in place in Conejos, Costilla, Gilpin and Gunnison counties, said Colin Henderson, president of the Alliance for Responsible Mining, which joined Summit County in defending the ban.
He said other counties are also considering bans.
Stuart Sanderson, president of the Colorado Mining Association, said the group has not yet decided whether to appeal. He said he believed the judges' reasoning was wrong.
Sanderson said only one mine in Colorado -- the Cripple Creek & Victor in Teller County -- uses cyanide-mining technology to extract gold.
The Summit County commissioners had enacted the ban in June 2004, citing extensive pollution downstream of the Summitville and Battle Mountain mines in south-central Colorado . The county also set standards for the use of other chemicals.
The mining association sued, and a trial judge ruled in August 2005 that the state Mined Land Reclamation Act takes precedence over any county or local standards for restoring mining-damaged land.
Summit County and the alliance appealed, saying the ruling was too broad. The appeals court agreed.
In a 2-1 decision, the appeals panel ruled the Mined Land Reclamation Act takes precedence over any county or local rules but said Summit County 's ban on cyanide had nothing to do with land reclamation.
"Had the General Assembly intended expressly to pre-empt areas of mining other than performance standards for mined land reclamation activities, we assume it would have done so," the majority opinion said.
The ruling said the county's cyanide ban was not prohibited because state law requires mines to comply with local land use and zoning regulations.
The appeals panel upheld the trial judge's conclusion that the state law pre-empted the county's ban on other chemicals or hazardous materials.
In a dissent, Judge Arthur Roy concluded that Summit County regulations on both cyanide and other chemicals were pre-empted by state law.
Sanderson said he agreed with Roy 's contention that mining is a matter of statewide concern so mine operators should be regulated uniformly, rather than with a patchwork of local rules.
"In effect the court has offered a rationale that is a self-contradiction: Counties may prohibit the use of chemicals but not regulate their use if and when the mining operation is approved," Sanderson said.
Henderson said other counties had been waiting for the appeals court ruling to decide whether to try to pass similar bans.
Henderson lives near the Alamosa River , which was severely polluted by discharge from the Summitville gold mine, now a Superfund site.
"What we found is that when we provide our experiences of living downstream of open-pit cyanide gold mines and our take on the facts of its history in Colorado and the West, Republicans and Democrats on the county level and people in Colorado do not want this kind of mining," Henderson said. "It's a failed technology."