Providing coverage of Alaska and Northwest Canada's mineral industry
July 2009

Vol. 14, No. 30 Week of July 26, 2009

Mining News: Teck expects Aqqaluk permits by 2010

Red Dog expansion will extend mine’s life 20 years; Native Elder says gaining permission for adjacent deposit should be simpler

Shane Lasley

Mining News

RED DOG MINE – Teck Resources Ltd. and NANA Regional Native Corp. are waiting, with cautious optimism, for the U.S. Environmental Protection Agency to provide final approval for development of a huge zinc-lead deposit that would extend the life of the Red Dog zinc mine by about 20 years.

The partners in the world’s largest zinc mine began their quest for approval to mine the Aqqaluk deposit, which is adjacent to the Red Dog Mine near Kotzebue, more than two years ago. Though mining the new deposit, which borders the north side of Red Dog’s Main deposit, will not substantially change operations at the mine, the EPA determined that a Supplemental Environmental Impact Statement is needed before it can approve the expansion.

NANA Elder Roland T. Booth Sr. said he believes that the long and extensive process for gaining regulatory approval to develop a deposit directly adjacent to the one currently being mined has been made more complicated than it needs to be.

“I am just a regular, everyday, Native board member for our Native regional corporation. From a Native standpoint I would think it would be just a simple thing,” Booth told Mining News during a June 30 visit to Red Dog.

“From this pit (main pit), which we would think would be the same thing to over there (Aqqaluk), is a totally different thing, a totally different battle, totally different issues, which I didn’t really envision some 30 years ago when we were just starting out,” said Booth, who has served as a director of NANA since 1972.

Economy built on mining

Red Dog has become an important job source and a significant cash generator for NANA’s shareholders and local governments in the remote northwest region of Alaska where the zinc mine is located.

“Mining has brought a lot of benefits to our region; our shareholders have benefited, the (Northwest Arctic) Borough has benefited. The revenues that have come from the mine are substantial. They have gone into the borough, NANA, to our shareholders through jobs and dividends. Also, the borough has been able to bond and help build new schools in five of our villages,” NANA Resources and Operations Manager Rosie Barr said.

More than 40 percent of the estimated 7,500 residents of the Northwest Arctic live in Kotzebue. The rest of the population lives in 10 remote villages scattered across the 38,000-square-mile, or 98,420-square-kilometer, borough.

Barr, who is originally from Noatak, said school construction alone provides a mini-economic boom in the remote villages.

The newest school to be constructed with revenues from Red Dog is the Napaaqtugmiut School in Noatak, the closest village to the zinc mine. The Northwest Arctic Borough has recorded unprecedented growth spurred by employment at Red Dog as reasons the community needed a larger school.

“Noatak, unlike many other villages, is experiencing rapid growth, with young families returning to the community. There is steady employment at the nearby Red Dog Mine. Within just five more years Noatak School will be at 320 percent of capacity if something is not done,” the borough posted on its Web site.

This fall the Noatak Lynx will be attending a modern school with plenty of room to grow. The new facility, built on land donated by NANA, comes complete with a library, full-court gym, new computers and state-of-the-art communication system linking the remote Arctic students to the rest of the world.

“These schools are not being built by Alaska taxes. These schools are being paid for primarily from revenues generated by Red Dog Mine,” Barr said.

Concern in the Northwest

Booth, an elder from Noatak, worries about the economic future of his family and friends if the permits to extend the mine are not granted.

“Permitting that needs to be done for this pit right here does not apply to that one that is over on the other side. So, that is where our battle is now,” Booth explained. “If a permit is not given to us, (it) kind of ends our mining endeavors.”

This is a common concern among NANA shareholders, many of whom have worked at the mine, and all of whom have benefited from dividends and the economic boost Red Dog has provided to this far-reaching region of Alaska.

“The possibility that mining could stop in this area, obviously it is really distressing to a lot of our shareholders,” Barr said. “We have a lot of folks that support Red Dog Mine and very strongly supported us during the draft SEIS (Supplemental Environmental Impact Statement).”

Seeking permits

In May 2007 the Red Dog partners sought the required modifications to the National Pollutant Discharge Elimination System permit to include the development of the Aqqaluk project, which borders the northern edge of the Red Dog main pit.

The modified plan proposed by Teck and NANA is to fill in the pit currently being mined with waste rock from the Aqqaluk deposit. The Aqqaluk ore will be mined and processed using the same techniques and facilities used during the past two decades.

“The best example is: We are going to stop digging here and going to start digging there. Nothing else changes in the process,” said James Kulas, Red Dog’s manager of environmental and public affairs.

The request to update the NPDES permit triggered a National Environmental Policy Act review of the project. The EPA, which is the lead agency in the NEPA process, determined that a Supplemental Environmental Impact Statement needed to be completed to assess the environmental impacts of the proposed mining plan.

The SEIS will replace the Environmental Impact Statement issued for the main pit in 1984, which the EPA has characterized as stale.

“Some things have happened over the life of the operation. We now have a better understanding of the impacts on water. We now have a better understanding of the impacts of dust. So, justifiably there were reasons to say, ‘OK, this EIS needs to be updated,’ ” Kulas said. “I applaud the agency for the work they’ve put behind it. They have done a very thorough and robust job of evaluating this. This is a full blown environmental impact statement. It has turned out to be a very big deal.”

With reserves in the main pit running low, NANA and Teck hope to have permits in hand to develop Aqqaluk during the second half of this year. Mining of the adjacent deposit needs to begin in 2010 for operations to continue without interruption. Aqqaluk will provide enough ore to keep Red Dog in operation until about 2031.

Kulas told Mining News July 16 that Teck is anticipating receipt of the final SEIS by the end of July and EPA is targeting Sept. 1 to issue its permit for the miner to begin work at Aqqaluk. The draft permit is subject to a 30-day public comment period.

Concerned about litigation

Though the Red Dog partners are in the final stages of receiving the comprehensive SEIS and the accompanying permits that will allow them to begin mining the extension, they worry that individuals or special interest groups will challenge their permits. Given the limited reserves remaining in the main pit, a delay caused by litigation could cause operations at Red Dog to grind to a halt.

“This litigious and contentious society that we live in now has got us very concerned. We are watching this thing closely and working as hard as we can to make sure we get this right,” Kulas said.

Teck and NANA are all too familiar with the affects of a “litigious and contentious society.”

In 2004 attorney Luke Cole of the San Francisco-based Center on Race, Poverty and the Environment, represented six residents of Kivalina in a US$20 million lawsuit against Teck Cominco Alaska Inc. for alleged violations of the U.S. Clean Water Act at the Red Dog Mine.

Plaintiffs claimed that Teck Cominco, the mine’s operator, discharged illegal amounts of total dissolved solids into the Wulik River. The mine discharges treated wastewater from the mine into Red Dog Creek, which then flows into the Wulik. Residents of Kivalina – a village 66 miles, or 106 kilometers, downstream from the mine – use the river for drinking water and subsistence fishing.

The solids at issue are produced by lime, which the mine uses to remove metals from its wastewater. The Alaska Department of Environmental Conservation studied the effects of the treated water discharged from Red Dog and concluded that it is not harmful.

“Ten years of aquatic surveys have demonstrated that aquatic productivity in the main stem (of Red Dog Creek) has increased from pre-mining conditions due to effective water management practices and treatment,” DEC researchers said.

Though the water discharged from the mine is up to drinking water standards and less harmful than the metal-laden runoff that naturally drains into Red Dog Creek, Teck settled the suit for an undisclosed sum, and agreed to seek permits to build a 54-mile-long pipeline to discharge its treated wastewater directly into the ocean.

The company also agreed to provide and maintain water filtration for Kivalina residents while it permits and constructs the proposed US$120 million pipeline.

Kulas said Teck will begin pursuing the pipeline permits after it has finished permitting Aqqaluk.

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