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                                                                    EXHIBIT 10.9

                             EMPLOYMENT AGREEMENT
                                      OF
                                 ANTHONY SILVA


     This EMPLOYMENT AGREEMENT is made and entered into effective January 15,
1998 by and between Anthony Silva ("Employee") and Kaiser Ventures Inc.
("Kaiser").

                                    Recitals

     A.  Employee is currently employed by Kaiser as Director, Corporate
Engineering and Environmental.

     B.  Effective as of January 15, 1998, Kaiser expanded Employee's duties and
responsibilities and has appointed him as Vice President, Resource Development
and Environmental Services.

     C.  The intent of this Agreement is to set forth the current agreement and
understanding of Employee and Kaiser with regard to Employee's continued
employment by Kaiser.

         NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1.  Employment, Positions and Duties. Kaiser hereby continues the
employment of Employee upon the terms and conditions set forth in this
Agreement. Employee's position with Kaiser shall be Vice President, Resource
Development and Environmental Services. Employee shall have the responsibilities
and duties normally incident to such position, including, but not limited to,
those duties and responsibilities set forth in Exhibit "A" attached hereto and
incorporated herein by this reference and such other duties and responsibilities
as may be reasonably assigned to him from time-to-time by Kaiser's Executive
Vice President or Chief Executive Officer. Employee agrees to devote his full
business time and attention to the discharge of his duties and responsibilities
under this Agreement.

     2.  Term. Employee's employment under the terms of this Agreement shall
commence as of January 15, 1998, and shall continue until terminated as provided
herein; provided, however, upon Employee's termination, Employee shall receive
the severance compensation provided herein.

     3.  Base Salary. Employee's initial annual base salary shall be One Hundred
Ten Thousand Dollars ($110,000) per year.

     Prior to the first meeting of the Board of Directors in any calendar year,
the Human Relations Committee of the Board will review Employee's salary and
report its recommendations for any revision to the full Board at such meeting.

     4.  Annual Bonus. In addition to his base salary, Employee shall be
entitled to participate in the bonus program of Kaiser applicable to senior
executives as it may be amended from time to time. The timing, size and/or
amount of any bonus awarded to Employee during the term of

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this Agreement will be determined annually in accordance with the process set
forth in Paragraph 3 above for the annual base salary review and based upon the
bonus program developed from time to time by the Compensation and Benefits
Committee and approved by the Board of Directors.

     5.  Stock Options and Other Stock Related Incentives. Employee shall be
eligible for the grant of incentive stock options, non-qualified stock options
and other forms of stock related incentives from time-to-time in the discretion
of the Stock Option Committee of the Board of Directors. The timing, size and
amount of any future stock options or other stock related incentives will be
determined generally in accordance with the process used to determine the award
of any bonus to Employee. The grant and exercise of the stock options and other
stock related incentives shall generally be subject to and governed by the terms
of Kaiser's 1995 Stock Plan as it may be amended or any similar or successor
option plan. However, the Stock Option Committee may award stock options,
restricted stock or other stock related incentives outside the 1995 Stock Plan
in its discretion.

     6.  Other Benefits. Employee will be entitled to participate in all
benefits provided by Kaiser to its employees and to senior executives in
accordance with and subject to Kaiser's polices and procedures as they may exist
from time-to-time, including, but not limited to, medical and dental insurance,
life insurance, disability insurance, 401(k) savings plan, any pension plan,
deferred compensation plan, education and seminar reimbursement, car allowance,
and reimbursement of reasonable expenses for company business. These benefits
shall include life insurance for the benefit of Employee with a face amount of
not less than Employee's annual base salary, except that Kaiser may self-insure
if insurance is not available on a commercially reasonable basis. Employee shall
be entitled to three (3) weeks of paid vacation per year until Employee has been
employed at Kaiser for five (5) years at which time Employee shall be entitled
to four (4) weeks of paid vacation per year.

     7.  Restricted Stock. Any restricted stock issued by Kaiser in lieu of cash
payments in connection with Employee's base salary or any bonus, shall be
subject to the terms and conditions of a stock restriction agreement which may
provide, among other things, for the forfeiture of such stock in phases if
Employee should voluntarily terminate his employment with Kaiser within a
certain period of time or upon Employee's termination for "cause", as defined
herein.

     8.  Death Benefits. In the event of Employee's death, Kaiser shall pay to
Employee's personal representative or his estate, Employee's salary and benefits
through the end of the month in which the death occurred plus a ratable portion
of Employee's anticipated bonus for the year through the date of Employee's
death. Employee's anticipated bonus shall be measured by the bonus awarded for
the most recent fiscal year. If a bonus has been earned by Employee for the
preceding fiscal year but has not yet been paid prior to the death of Employee,
Employee's estate or personal representative shall be paid the full amount of
the earned but unpaid bonus. The proceeds from any such life insurance shall be
for the sole benefit of Employee's designated beneficiaries or if there are no
designated beneficiaries, Employee's estate. Upon an Employee's death, all
restricted stock issued to Employee for past services (e.g. bonus stock), shall
immediately vest and all restricted stock initially issued for anticipated
future services (e.g. salary stock) will vest ratably through the date of death.
Employee's estate or personal representative shall have at least one (1) year
after the date of Employee's death while in the employment of the Company in
which to exercise all vested Stock Options.

     9.  Disability Benefits. In the event of the disability of Employee for any
reason, Kaiser shall continue to pay to Employee his salary and benefits less
short-term disability payments until long-

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term disability payments are made to Employee but in no event shall such salary
and benefit payments continue for longer than six (6) months from the date of
disability. In addition, upon permanent disability, the vesting of all
retirement and deferral compensation plans and all outstanding options,
restricted stock or other stock related incentives shall continue to occur for a
period of two (2) years after the date of disability in the same manner as if
Employee were still employed by Kaiser during that period.

     10. Deductions. Applicable federal and state income taxes, social security
contributions (FICA), Medicare contributions, medical insurance premiums and any
other appropriate or customary deductions shall be withheld from any
compensation paid to Employee by Kaiser.

     11. Material Change. Upon the occurrence of a Material Change as hereafter
defined and subject to Paragraph 14 below, all options to acquire shares of
Kaiser stock, restricted stock or any other stock related incentive previously
granted to Employee shall immediately and fully vest one (1) day prior to the
Material Change, notwithstanding any other applicable vesting schedule. Upon the
occurrence of a Material Change, Employee shall be entitled, for a period of two
years, to exercise his stock options as to any of such shares. This provision
shall take precedence over any contrary provision in any standard stock option
agreement. For purposes of this Agreement, the term Material Change shall refer
to and mean the occurrence of any one of the following events after the date of
this Agreement:

         a.    any sale, merger or other acquisition of all or substantially all
of Kaiser with or by another entity where the shareholders of Kaiser at the time
of the sale, merger or other acquisition do not own or control at least 51% of
the voting power of such entity immediately after the time of the sale, merger
or other acquisition.

         b.    any acquisition of common stock by a person or "group" (as
defined in section 13(d) of the Securities Exchange Act of 1934), resulting in
the "beneficial ownership" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) by that person or group of more than (i) 25% of the
capital stock of Kaiser accompanied by a change of more than 50% of the
directors of Kaiser within one year after such event or (ii) 35% of the capital
stock of Kaiser with or without such change.

         c.    following the date of this Agreement, there has been an aggregate
of net assets with a cumulative value that exceeds the greater of (i)
$20,000,000 or (ii) 20% of the net equity of Kaiser at the time of the
distribution (whether by dividend or repurchase of stock) distributed to any one
or more Kaiser shareholders.

     12. Constructive Termination After A Material Change. Upon the occurrence
of a Material Change, Employee shall be deemed to have been constructively
discharged upon the occurrence of any of the following events within six months
(6) before or eighteen (18) months after the Material Change:

         a.    The assignment to Employee of duties materially and adversely
inconsistent with Employee's positions immediately prior to a Material Change.
This includes a change in reporting responsibilities, authority including title,
or responsibilities; provided, however, a lateral transfer within Kaiser or to
an Affiliate shall not be deemed a constructive termination;

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         b.    Any requirement that Employee permanently relocate to an office
more than 50 miles from the then location to which he is assigned; and

         c.    Any failure to provide Employee with compensation and benefits in
the aggregate on terms not materially less favorable than those enjoyed by
Employee under this Agreement immediately prior to a Material Change, or the
subsequent taking of any action that would materially reduce any of Employee's
compensation and benefits in effect at the time of the Material Change unless
such compensation and benefits are substantially equally reduced for executive
officers of Kaiser as a group (as measured by a percentage) or there is less
than a ten percent (10%) reduction in compensation or benefits.

         then, at Employee's option, exercisable within ninety (90) days of the
date Employee knew, or should have known exercising reasonable care, of the
occurrence of any of the foregoing events and the expiration of any applicable
cure period, Employee shall have the right to terminate his employment by
written notice to Kaiser, and on the date of such termination Kaiser will pay
Employee the compensation and benefits described in Paragraph 13 below.

     13. Compensation Payable Upon Actual or Constructive Termination Related to
a Material Change. In the event Employee is terminated for any reason except for
death, permanent disability or for cause, as defined below, within six (6)
months before or eighteen (18) months after a Material Change or upon the
Constructive Termination of Employee before or after a Material Change as
defined and provided in Paragraph 12 above, Kaiser shall pay to Employee the
following compensation as severance benefits in addition to the severance
compensation that Employee shall receive pursuant to Paragraph 15 regardless of
any Material Change:

         a.    if the termination is effective after March 31 of any year, an
amount equal to the pro rata portion of the bonus that Employee would have been
eligible to earn for the year of termination as measured by the preceding year's
bonus;

         b.    an amount equal to one year's average annual bonus (cash and
stock, but not including stock options or stock grants outside of the annual
bonus) averaged over the two (2) immediately preceding years; and

         c.    Employee shall have the right to participate proportionately in
stock buyback or dividend distribution in proportion to shares owned together
will all other shareholders.

     All amounts due Employee shall be payable in one lump sum or, at Employee's
option, over such period of time not to exceed twelve (12) months.  Employee
shall have no duty to seek other employment during this period of time and there
shall be no offset for any compensation paid to Employee from any other source;
provided, however, if Employee is paid a consulting fee or receives compensation
from Kaiser or an Affiliate of Kaiser for services actually rendered during a
one (1) year period from the date of termination, unless otherwise agreed in
writing, such amount shall be offset against the payments made or due Employee.

     14. Possible Reduction in Certain Benefits.

         (a) Except as provided in Paragraph 14(b) below, Employee shall in no
circumstances receive "payments in the nature of compensation" from Kaiser which
would result in

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"excess parachute payments" (as that term is defined in Sections 280G and 4999
of the Internal Revenue Code of 1954, as amended, or any equivalent or analogous
term as shall in the future be defined in any law or regulation governing the
amount of severance compensation that may be paid without penalty to an officer
of a company upon a change in control of Kaiser). In the event either Employee
or Kaiser shall be advised in writing by his or its counsel that Employee would
receive excess parachute payments if all payments under all contacts between
Employee and Kaiser were made, such opinion shall be confidentially disclosed to
the other party. If it is mutually determined that such payments would trigger
the excess parachute payments provisions, Employee shall receive only such
compensation and benefits under his contracts with Kaiser (not to exceed those
permitted without constituting excess parachute payments) which he, in his sole
discretion, has designated in written notice to Kaiser. Employee shall have a
minimum of thirty (30) days in which to make such written designation. In the
event of a disagreement between the counsel of the respective parties as to
whether a payment would result in excess parachute payments, such counsel shall
jointly designate an independent tax counsel (whose fees shall be paid by
Kaiser) within 10 days who shall promptly make a conclusive determination of the
matter.

         (b)   Notwithstanding anything else to the contrary, in the event
Employee is terminated pursuant to Paragraph 13 above, Employee shall have the
right, in his sole discretion, to elect to receive all or any part of the
compensation payable to him upon termination (or which would have been due under
Section 11 but for a previous election under Section 14(a)) without regard to
whether any such amounts may constitute "excess parachute payments." If Employee
fails to provide the Company a written designation within thirty (30) days, he
shall be presumed to have elected to receive all compensation and benefits due
him without regard to whether any such compensation or benefits shall constitute
"excess parachute payments."

         (c)   Nothing in this Paragraph 14 shall be construed or deemed to be a
forfeiture of any compensation or benefits that Employee may elect not to
accelerate due to any concern about the receipt of "excess parachute payments."

     15. Termination Without Cause. In the event Kaiser elects to terminate
Employee's employment without cause (as defined below) during the term of this
Agreement, then Kaiser agrees to pay Employee an amount equal to one year's
annual base salary (based on Employees then current annual base salary) and
continue to provide and pay its portion of all of Employee's health, welfare,
insurance and other benefits for a period of twelve (12) months following the
date of termination, including Kaiser's portion of any retirement and deferred
compensation plan such as Kaiser's 401(k) plan. After such termination, Employee
shall be entitled, for a period of two years to exercise his stock options as to
any then vested, including any options vesting within one year of termination as
provided in the next sentence, notwithstanding any other applicable provision
contained in any option agreement. In addition to the foregoing related to stock
options, with respect to any restricted stock or other stock related incentives,
Employee shall continue to vest in such securities for a period of one-year
following termination. If Employee is terminated before or after a Material
Change as provided in Paragraph 12, Employee shall receive the additional
severance compensation provided in Paragraph 13.

     16. Termination for Cause. If Kaiser elects to terminate Employee's
employment for cause (as defined below), Employee's employment will terminate on
the date fixed for termination by Kaiser and thereafter Kaiser will not be
obligated to pay Employee any additional compensation, other than the
compensation due and owing up to the date of termination and as may be required
by law.

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After such termination, Employee shall be entitled, for a period of ninety (90)
days, to exercise any stock options or other stock related incentives that are
vested as of the date of termination.

     17. Definition of "Cause." "Cause" for the purposes of this Agreement shall
mean any of the following:

         a.    Willful breach by Employee of any provision of this Agreement,
provided, however, if the breach is not a material breach, Kaiser shall give
Employee written notice of such breach and Employee shall have thirty (30) days
in which to cure such breach. No written notice or cure period shall be required
in the event of a willful and material breach of this Agreement by Employee;

         b.    Gross negligence or dishonesty in the performance of Employee's
duties or responsibilities hereunder;

         c.    Engaging in conduct or activities or holding any position that
materially conflicts with the interest of, or materially interferes with
Employee's duties and responsibilities to Kaiser or its Affiliates; or

         d.    Engaging in conduct which is materially detrimental to the
business of Kaiser or its Affiliates.

     18. Voluntary Termination. Employee's employment by Kaiser may be
terminated at any time upon the parties' mutual written agreement or voluntarily
by either party upon prior written notice to the other. In the event of a mutual
written agreement, Employee's severance benefits shall be as set forth in such
agreement. In the event of Employee's voluntary termination of employment,
Kaiser shall not be obligated to pay Employee any additional compensation, other
than the compensation due and owing as through the date of termination and as
may be required by law. After such termination, Employee shall be entitled for a
period of ninety (90) days to exercise any stock options or other stock related
incentives that are vested as of the date of termination.

     19. Confidentiality.

         a.    Employee's Obligations. Employee agrees that (a) except as
               ----------------------
provided in this Agreement Employee shall maintain the confidential nature of
any Proprietary Information received or acquired by him, and (b) Employee shall
use such Proprietary Information solely for the purpose of meeting his
obligations under this Agreement and not in connection with any other business
or activity. "Proprietary Information" means all oral, written or recorded
information about or related to Kaiser or any of its Affiliates or its or their
technology, assets, liabilities, or business, whether acquired before or after
the date hereof, and regardless of the manner in which it is acquired, together
with any documents or other materials prepared by Employee which contain or
reflect such information. After termination of employment upon demand of Kaiser,
Employee agrees to return or destroy any and all materials containing any
Proprietary Information.

         b.    Kaiser's Obligations. Kaiser agrees that it shall maintain and
               --------------------
provide information regarding Employee in accordance with generally accepted
industry and business practices.

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         c.    Limitations on Confidential Obligations and Use Restrictions. The
               ------------------------------------------------------------
restrictions in Paragraph 19(a) above do not apply to information which the
Employee can demonstrate (i) is then in the public domain by acts not
attributable to such disclosing party or (ii) is hereafter received on an
unrestricted basis by such Employee from a third party source who, to Employee's
knowledge after due inquiry, is not and was not bound by confidentiality
obligations to Kaiser or any Affiliate thereof. In addition, Employee and Kaiser
are permitted to disclose any Proprietary Information as necessary in the
defense or prosecution of any legal action.

         d.    Actions if Disclosure Required. If Employee is required by law to
               ------------------------------
make any disclosure otherwise prohibited hereunder, such party shall use its
best efforts to provide the other with prompt prior notice where possible so
that (a) the other party (with the reasonable cooperation of the party required
to make such disclosure) may seek an appropriate protection order or other
remedy and/or (b) the parties can seek in good faith to agree on the appropriate
scope and approach to disclosure. If a protective order or other remedy is not
obtained, the party required to make such disclosure may furnish only that
portion of information protected hereby which it is legally compelled to
disclose and shall use its reasonable efforts to obtain confidential treatment
for all information so disclosed.

         e.    Injunction. Each party agrees that remedies at law may be
               ----------
inadequate to protect against breach of this Paragraph 19, and hereby agrees to
the granting of injunctive relief without proof of actual damage.

     20. Indemnification. Kaiser agrees to continue to indemnify employee in
accordance with the Indemnification Agreement between Employee and Kaiser dated
October 10, 1996, a copy of which is attached hereto as Exhibit "B" and
incorporated herein by this reference.

     21. Arbitration of Disputes. If Employee and Kaiser cannot resolve a
dispute (whether arising in contract or tort or any other legal theory, whether
based on federal, state or local statute or common law and regardless of the
identities of any other defendants) that in any way relates to or arises out of
this Agreement, the termination of Employee's employment relationship with
Kaiser or any Affiliate thereof, (without limiting the generality of any other
Paragraph herein), then such dispute shall be settled as follows:

         a.    Kaiser and Employee agree to jointly select a judicial officer
who is affiliated with the Judicial Arbitration and Mediation Service, or such
other equivalent organization as Kaiser and Employee may mutually select, to act
as the trier of fact and judicial officer in such dispute resolution;

         b.    If Kaiser and Employee are unable to agree upon a particular
judicial officer, then the decision shall be made by the chief executive officer
of the Judicial Arbitration and Mediation Service, after consulting with Kaiser
and Employee;

         c.    Kaiser and Employee shall have the same rights of discovery as if
the dispute were being resolved in the Superior Court of the State of
California. However, the judicial officer shall, on his own motion, or the
request of either Kaiser or Employee, have the authority to extend or reduce the
time periods therefor; and,

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         d.    The judicial officer serving hereunder shall be designated as a
referee under the provisions of Title VIII, Chapter 6 of the California Code of
Civil Procedure (Sections 638 through 645. 1, inclusive). Payment for the
services of the judicial officer and the rights and procedure of appeal, and/or
other review of the decision, shall be made as provided in such sections.

     The judicial officer shall have the right to grant injunctive relief,
specific performance and other equitable remedies.

     22. Miscellaneous.

         a.    Entire Agreement; Amendments. This Agreement and the exhibits
               ----------------------------
attached hereto state the entire understanding and agreement between the parties
with respect to its subject matter supercedes the Employment Agreement between
Employee and Kaiser dated October 10, 1996 and may only be amended by a written
instrument duly executed by Employee and Kaiser.

         b.    Assignment. This Agreement and the rights and obligations of
               ----------
Employee may not be sold, transferred, assigned, pledged or hypothecated by
Employee.

         c.    Non-Waiver. Failure to insist upon strict compliance with any
               ----------
provision of this Agreement or the waiver of any specific event of non-
compliance shall not be deemed to be or operate as a waiver of such provision or
any other provision hereof or any other event of non-compliance.

         d.    Binding Effect. This Agreement shall be binding upon and inure to
               --------------
the benefit of Kaiser, its successors and assigns and, Employee's heirs,
successors, and legal or personal representatives.

         e.    Headings. The headings throughout this Agreement are for
               --------
convenience only and shall in no way be deemed to define, limit, or add to the
meaning of any provision of this Agreement.

         f.    Context. Whenever required by the context, the singular shall
               -------
include the plural, the plural the singular, and one gender such other gender as
is appropriate.

         g.    Notices. All notices, request, demands, consents and other
               -------
communications hereunder shall be transmitted in writing and shall be deemed to
have been duly given when hand delivered or sent by certified United States
mail, postage prepaid, with return by certified requested, addressed to the
parties as follows:

               Kaiser Ventures Inc.
               3633 E. Inland Empire Blvd., Suite 850
               Ontario, CA  91764


               Anthony Silva
               7 Capri
               Foothill Ranch, CA  92610

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         h.    Costs.  In any action taken to enforce the provisions of this
               -----
Agreement, the prevailing party shall be reimbursed all reasonable costs
incurred in such legal action including reasonable attorney's fees in such
action.

         i.    Severability. If any provision or clause of this Agreement, as
               ------------
applied to any party or circumstances shall be adjudged by a court to be invalid
or unenforceable, said adjudication shall in no manner effect any other
provision of this Agreement, the application of such provision to any other
circumstances or the validity or enforceability of this Agreement.

         j.    Definition of Affiliate. The term "Affiliate" for purposes of
               -----------------------
this Agreement shall mean any person or entity now or hereafter in control,
controlled by or in common control with Kaiser. It shall also include any direct
or indirect subsidiary of such Corporation and any company in which Kaiser has
more than a ten percent (10%) ownership interest.

         k.    Acknowledgment Regarding ISO's. Employee acknowledges that he is
               ------------------------------
responsible for the tax consequences of all severance compensation he may
receive and that certain actions may need to be taken by Employee within limited
periods of time to preserve the tax status of any incentive stock options.
Kaiser makes no representation or warranty that any past or future grant of a
stock option to Employee qualifies as an incentive stock option.

         l.    Governing Law. This Agreement shall be governed by and construed
               -------------
in accordance with the laws of the State of California.

     IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement to be effective as of the day and year first written above not
withstanding the actual date of signature.


                                   "Employee"
                                   Anthony Silva


                                   /s/ Anthony Silva
                                   ------------------------------
                                   Anthony Silva


                                   "Kaiser"
                                   Kaiser Ventures Inc.


                                   By: /s/ James F. Verhey
                                      -----------------------------------------
                                      James F. Verhey, Executive Vice President



                                   By: /s/ Lyle B. Stevenson
                                      -----------------------------------------
                                      Lyle B. Stevenson, Chairman of the
                                      Compensation and Benefits Committee

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                                  SCHEDULE "A"

                                 ANTHONY SILVA
                  Vice President Environmental and Engineering


     This position reports to the Executive Vice President and the Chief
Executive Officer of the Corporation.

Responsibilities

     The position has the primary responsibility for developing strategies and
options for addressing and resolving all of Kaiser's outstanding environmental
remediation liabilities and for managing cost-effective implementation of those
environmental remediation strategies and options approved by Kaiser's management
and the Board of Directors.

Employee's Particular Responsibilities Include:

     .    Assisting the Chief Executive Officer and others with developing
          environmental remediation strategy(ies) and managing the
          implementation of the approved strategy to comply with consent order
          and additional Department of Toxic Substances Control requirements.
     .    Managing the development of all long-term strategic environmental
          remediation planning and monitoring for the Company.
     .    Selecting, managing and supervising, as appropriate, all environmental
          and related other consultants and contractors.
     .    Providing Senior Management review on various redevelopment/planning
          projects and environmental/engineering projects.
     .    Ensuring correct environmental and engineering information is
          disseminated to Senior Management, Board of Directors and Regulatory
          Agency Representatives.
     .    Implementing operational systems (e.g. computer information systems
          and project management systems) to assist in the management of
          assigned projects and associated budgets.
     .    Providing professional expertise to in-house counsel and retained
          counsel for claims, litigation and judicial arbitration.
     .    Participating as an Integral Member of Corporate Strategic Planning
          Team.
     .    Developing and managing corporate engineering and environmental annual
          budgets.
     .    Develop and implementing audit and monitoring programs to insure
          Kaiser's compliance in complying with statutory and corporate
          requirements.
     .    Providing regular briefings/reports on key issues to Senior
          Management, Board and Directors and regulatory agency report
          representatives.
     .    Conduct in-house training as necessary to ensure all employees are
          aware of their responsibilities with regard to corporation
          environmental policies and practice.

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