Mining News: Alaska supports Southeast gold mine

The State of Alaska, Tlingits stand by Coeur Alaska as it fights to legitimize tailings permits for its Kensington gold mine

Shane Lasley

Mining News

Coeur Alaska, developer of the Kensington Project near Juneau, is drawing the ongoing support of Alaska and Alaskans as it continues its legal battle to gain regulatory permission to begin gold production.

The case involves a challenge to a permit issued by the U.S. Army Corps of Engineers that allows the proposed mine to dispose of waste rock created during production in a nearby lake. Coeur hopes the permit will be upheld by the U.S. Supreme Court, which is currently reviewing the case.

Coeur, which has spent more than $300 million to develop the proposed Kensington Mine, hopes the land’s highest court will rule favorably on the permit dispute before the court recesses at the end of June. It is unclear how much longer the court will need to deliberate, but as of the beginning of May, the justices still had unanswered questions.

Southeast Alaska Conservation Council and other environmental groups opposed the miner’s plan for wet disposal of the tailings and sued the federal agency, claiming the permits were invalid.

Coeur Alaska’s parent, Coeur d’Alene Mines Corp., took the case to the nation’s highest court after the Ninth Circuit Court of Appeals overturned a lower court ruling that upheld the permit issued by the Corps.

Much of the oral arguments before the Supreme Court Jan. 12 centered on whether the mine tailings to be deposited in Lower Slate Lake – a small, inland body of water with little aquatic life – should be classified as “fill material” or as “slurry” because water is mixed into them. Under federal law, the classification distinction determines which federal agency would have oversight of the mine’s tailings disposal plan.

The State of Alaska, Coeur Alaska and federal regulators argued that the tailings are properly classified as fill and current 404 permits issued by the Corps are valid.

But opponents argued that the water added to the mine waste so it can be transported via a pipeline to the lake transforms the tailings into an effluent that by law should be supervised by the U.S. Environmental Protection Agency and required to meet guidelines of a 402 permit.

More than three months after those arguments, the high court asked for additional briefs that address the following questions:

• Would a future violation of the Clean Water Act authorize a court to set aside the permits issued by the Corps?

• If a discharge comes within the scope of the U.S. Environmental Protection Agency’s effluent limitations and satisfies the definition of fill material, may the discharger obtain permits under both Section 402 (EPA) and Section 404 (Corps) of the Clean Water Act?

• Must the discharger do so?

The Supreme Court gave participants in the lawsuit 11 days, until May 15, to submit supplemental briefs answering the questions posed by the justices. They also received another week, until May 22, to respond to the briefs submitted by opposing parties in the case.

Alaska files a brief

“The state’s legal efforts, including the supplemental brief filed today, show support for developing our resources responsibly, growing Alaska’s economy and creating well-paying jobs,” Palin said in a statement May 15. “The brief should assist the Supreme Court with rendering a decision that finally allows the Kensington Mine to move ahead.”

The state attorneys answered “no” to all of the questions posed by the justices. The attorneys said they worry that the high court would uphold the permit but leave open the door for future litigation concerning Coeur’s future discharges.

“One of the issues raised by the justices implies that they are considering narrow procedural grounds for deciding the case, without actually determining whether the mine discharge is legal,” said Deputy Attorney General Craig Tillery. “We, and Coeur, want the court to make a definitive ruling on the central issue, so that everyone knows what the rules are.”

The State of Alaska has stood alongside Coeur throughout its legal battle to retain the Corps permit for tailings disposal in the lake. The state’s lawyers are believed to have played an instrumental role in convincing the high court to take up the case. They argued alongside Coeur’s attorneys in both the Ninth Circuit and Supreme courts.

Reps resolve to protect permits

“The Kensington mine project is vital to my community,” said resolution sponsor Rep. Cathy Muñoz, R-Juneau. “Coeur Alaska has committed to responsible, environmentally-sound development of the prospect. They’ve already spent more than $30 million on (1,000) studies, and more than $33 million on preliminary construction.

Muñoz also urged state and federal regulatory agencies with jurisdiction over the project to promptly allow permitting extensions, re-instatements, and re-activations that were in effect when the 9th U.S. Circuit Court of Appeals issued an injunction halting the project.

“Due to the August 2006 injunction imposed by the 9th Circuit, some 70-plus permits authorizing the mine that were in place are now in jeopardy,” Muñoz added. “Coeur’s appeal to the U.S. Supreme Court is imminent, and should the Court rule in favor of the mine, the necessary state and federal agencies should be ready to assist the company in seeking continuations on the permits. The mine and the 300-plus well-paying jobs for Juneau are too important to risk losing due to bureaucratic issues.”

Tlingits take practical approach

Goldbelt Inc., an Alaska Native village corporation representing Juneau shareholders, filed a brief with the U.S. Supreme Court in support of Coeur and upholding the tailings permits issued by the Corps.

“Throughout the Kensington permitting process the views of area Tlingit Indians were heard and respected by the federal agencies and by the permittee, Coeur, in particular,” Goldbelt wrote in its brief. “The end result of the Kensington permitting process is a project that fully protects the subsistence uses and resources of Berners Bay.”

“In the case of Coeur Alaska’s Kensington Gold Mine north of Juneau, the expressed environmental fears are for an isolated 23-acre muskeg lake in a state that has more than 3 million lakes,” wrote Randy Wanamaker, council member of the Tlingit and Haida Central Council, in an article printed in the Fairbanks Daily News Miner. “This lake contains an insignificant number of non-endangered fish common to the region. The mine is in a historic mining district and has been permitted by the Environmental Protection Agency, the Army Corps of Engineers and all state and local agencies. This mining district — where similar mines operated for more than 40 years with no environmental regulation — is an area described as pristine by contemporary mining opponents.”

In its brief, Goldbelt explained that the 404 tailings permit issued by the Corps is not a standalone permit, but is complemented by EPA’s National Pollution Discharge Elimination System permit.

“While SEACC and the other respondents question the decision to permit the Kensington Mine under Section 404 as a matter of law, they have not challenged the adequacy of any of the countless environmental reviews, or any of the specific findings made by the Corps, the Forest Service, the EPA, or the myriad other federal, state and local agencies that exhaustively evaluated the Kensington project and concluded that it would not result in substantial harm to the environment, including waters of the United States,” Goldbelt wrote in its brief.

Juneau Assembly addresses future threats to Kensington permits

The Juneau Assembly passed a resolution April 6 opposing the U.S. House bill H.R. 1310, the “Clean Water Protection Act,” by a margin of 5-4. The assembly’s opposition to H.R. 1310 – which would amend the Federal Water Pollution Control Act to redefine fill material – is a result of the effect the bill could have on the proposed Kensington gold mine located about 45 miles northwest of Juneau.

The resolution, drafted by Assembly members Sara Chambers and Randy Wanamaker, says the definition of fill as proposed in H.R. 1310 “would override a favorable decision of the Supreme Court of the United States in favor of the Coeur Alaska Kensington Gold Mine, as currently permitted by the U.S. Environmental Protection Agency and the Army Corps of Engineers.”

“Now, at a time of great financial difficulties and enormous job losses, we find that radical oppositionists, fearful that Coeur Alaska will prevail before the Supreme Court, are in league with East Coast congressmen to introduce legislation that would make it nearly impossible to open the Kensington mine. While targeted at a gold mine in Southeast Alaska, the consequences would be national, as thousands of mining jobs are exported to other countries,” Wanamaker said.

The authors of the assembly resolution said they are confident that the Kensington Project has been properly permitted, and “H.R. 1310 will overturn 35 years of well-established nationwide procedures used by the Army Corps of Engineers and the Environmental Protection Agency.”

The assembly members said a mine at Kensington is of vital economic importance to Juneau and to Southeast Alaska.

Wanamaker wrote in the Fairbanks Daily News Miner, “As an assemblyman, I now struggle with Juneau’s budget problems. In each of the last past two years, the city has lost about $25 million in payroll, $3 million in sales and property taxes and $9 million in local goods and service purchases. Juneau is struggling with projected annual budget shortfalls estimated at $5.5 million.

Citing a 62 percent unemployment rate among Alaska Natives in Southeast Alaska, the resolution says the Kensington project has and will continue to recruit, train and employ Alaska Natives.

The assembly members also expressed concern about how the proposed definition change would affect other construction projects and municipal landfills, not only in Juneau, but across the nation. The proposed Kensington gold mine, and other projects that would require disposal of excess rock and soil in areas designated as wetlands, would be affected by the bill.

Implications of H.R. 1310 are especially profound in Alaska, where about 174.7 million acres, or 43.3 percent of the state’s surface area, is considered wetlands. That compares with an average of 5.2 percent of the surface area of the lower 48 states.

—Shane Lasley