Small scale mining (dredging, highbanking, sluicing, panning, etc..) cannot even be compared to the effects of large mining operations. They are 2 completely different animals. To group these together is a completely unreasonable accusation.
For example, dredging does not leach harmful chemicals, or ruin waterways. If anything, it actually helps remove heavy metals such as lead and mercury from the areas worked. And in my years of dredging experience, I've seen fish flock to recently dredged areas for feeding and spawning. I've also removed countless lead fishing weights, bullets, miscellaneous metal objects, mercury, etc, all found by dredging.
Most of the residual mercury found in waterways is from old mining operations before there were as many regulations put into place, not from present day small scall mining and hobby prospectors. To try to pinpoint pollution and contaminated water to such activities is a completely invalid argument seeing as how the problem doesn't even correlate to the situation.