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Vol. 13, No. 30 Week of July 27, 2008
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News:Leaders voice concerns about initiative

Vaguely worded Ballot Measure 4 poses significant danger for mining, Native corporations, rural communities and Alaska economy

By Shane Lasley

Mining News

In a July 3 decision, the Alaska Supreme Court confirmed that the ballot initiative 07WTR3 is not an appropriation and can be placed on the ballot for the August 26 Alaska primary election.

Ballot Measure 4 is currently listed in the Division of Elections 2008 primary election media packet. According to that listing, the ballot measure facing Alaska voters will read:

Ballot Measure 4 - Bill Providing For Regulation of Water Quality (07WTR3)

This bill imposes two water quality standards on new large scale metallic mineral mining operations in Alaska.

The first standard does not allow such a mining operation to release into water a toxic pollutant that will adversely affect human health or the life cycle of salmon.

The second standard does not allow such a mining operation to store mining wastes and tailings that could release sulfuric acid, other acids, dissolved metals or other toxic pollutants that could adversely affect water that is used by humans or by salmon.

The bill defines a large scale metallic mineral mining operation to mean a metallic mineral mining operation that is in excess of 640 acres in size. The bill defines toxic pollutants to include substances that will cause death and disease in humans and fish, and includes a list of substances identified as toxic pollutants under federal law.

Alaska leaders speak out

Ballot Measure 4 is broadly written and lacks specific regulatory standards.

In a report prepared for Rep. Paul Seaton, R-Homer, regarding the ballot measure’s potential effect on Alaska’s current statutory and regulatory standards, Alaska Legislative Legal Services attorney Alpheus Bullard wrote: “The mining initiative is not a model of drafting clarity. The initiative’s use of language creates questions as to the scope and applicability of the initiative’s provisions.

“Interestingly, in representing what the initiative will do, the neutral summary may increase the chances of the initiative’s legal effect being interpreted by a court in a manner not consistent with the summary’s interpretation, yielding a result that might be different from either what an interpretation of the initiative’s text, in isolation, might have provided or what the measure’s sponsors might desire,” Bullard said.

Thus, Alaska voters may be voting on a measure without knowing what effect it will have on water quality or the future of Alaska’s mining industry. This lack of clarity and the potential effects the measure could have on mineral exploration, existing mines and future mines is worrying many of Alaska’s business and political leaders.

Here is what some of them had to say:

Marie Greene

President of Alaska Native regional corporation NANA Inc.

“The end result of the ballot initiatives would be a shutdown in jobs, a shutdown of a rapidly growing sector of Alaska’s economy and, for many communities, a shutdown of hope. These initiatives would have a devastating effect on Alaska’s mining families, and be a serious economic blow to rural communities and the economy statewide.”

Jason Metrokin

Vice president, shareholder and corporate relations of Bristol Bay Native Corp.

“Our board has not taken a position on Ballot Measure 4. There is a lot of media play on both sides of the issue. From our perspective, there is a lot of misunderstanding about the Clean Water Act that we are still trying to gather the facts on.”

Wayne Stevens

President of the Alaska Chamber of Commerce

“The State Chamber is opposed to the ballot initiative. Our concern is the way it is presented makes it sound so innocuous. What is not stated is that each mine doesn’t have just one permit, there are dozens of permits with differing dates of renewal and differing areas of authority issued by a multitude of different agencies.

While no one, I repeat no one, wants to see fish or water impacted. The regulatory environment in this state is very, very rigorous and very, very thorough. There are some wonderful success stories in our state of mine operations. Particularly, the mines impact on providing economic opportunity for citizens in communities that have historically high levels of unemployment and low rates of opportunity for jobs beyond a clerk at the post office, a clerk at the grocery store or a clerk at the gas station.

After visiting exploratory operations in past years and talking with young people who are trainees for their positions as an entrance into the mining field; the sense of pride, the sense of responsibility, and understanding that acquiring a skill set working in the mining industry provides them a ticket to work anywhere in the world and still an opportunity to live and work in their communities and participate in the traditional activities that make living in their communities so important to them and their lifestyle. At the end of the day those people do not want to see their subsistence lifestyle impacted by a poorly designed or poorly regulated mining industry.

When there is hope in a community the incidents of drug and alcohol abuse goes down. All of that myriad of social issues that come with not having a future, not having a belief that I can do something productive and provide for my family, friends, myself and still be valued in my community. There is hope when you have a job. I think that gets missed in some of these debates about the pros and cons of development.”

Rosie Barr

Spokeswoman for Alaska Native regional corporation NANA Inc.

“If the initiatives are voted into law, we, along with other Alaskans, will never be able to develop our mineral resources. We have other mineral prospects located on NANA land, including the bornite deposit that our shareholders are very excited about. In the Calista Corp. region, the Donlin (Creek) Mine would most certainly be affected. Additionally, existing mines such as Red Dog would be shut down. The effects across the entire state would be absolutely devastating.

The concerns that I have heard are primarily about protection of resources such as water and fish. These protections are written into the regulations that govern mining. Mining is one of the most regulated industries in the United States, and Alaska has stringent standards that the mining industry must meet in order to begin or continue operations.

The sponsors have basically stated that they understood at the onset that these initiatives were unconstitutional, yet subjected our state to a barrage of misleading ads and attempted to create controversy where it was unnecessary. They’ve stated in their ads that these initiatives won’t affect existing mines. Yet Alaska law states that you cannot target a specific project through the initiative or legislative process. The initiatives had to be written broadly and because of this, they will affect both existing and new mines in Alaska. We cannot allow this to happen. I am very thankful that Alaskans are speaking out, loudly and clearly, against these deceptive initiatives.”

Matt Ganely

Vice president, land and resources of Bering Straits Native Corp.

“Not all of the regional corporations are involved in mineral exploration and development but those of us who are stand a chance of being pretty gravely affected. It is important to note the (Native) regional corporations as well as the Alaska Federation of Natives oppose Ballot Measure 4.

One of the things that I think people fail to understand in regards to the regional corporations and development is the requirement under section 7(i) to redistribute the income gained from any type of mineral development. This really has far ranging effects. That 7(i) redistribution goes not only to the regional corporations but also to the village corporations, and it can be a fairly significant amount that can help out with operations all the way down to the village corporations.

We see that this ballot initiative as something that could affect both current mines, obviously future mines and also could affect exploration, which in the Bering Straits region has been ongoing for 30 years on corporation land and is an economic engine in the region both for local hire and business. If the initiative passes (I hope it isn’t the case.), but it may affect the enthusiasm of exploration companies for working within Alaska if it looks like they cannot develop a mine because of the initiative. A lot of this boils down to the vagueness of the language in the initiative.”

Will Anderson

President and CEO of Alaska Native regional corporation Koniag Inc.

As one of the Alaska Native regional corporations, Koniag benefits from the mining industry through the revenue sharing of 7(i) of the Alaska Native Claims Settlement Act. Even though we don’t currently have any mining operations in our region, we benefit directly from operations in other regions, therefore any ballot initiative that limits any of the Native regional corporations from developing natural resources on ANCSA lands will have a profound effect on Koniag because it will reduce that amount of revenues being shared.

Coming from a region that is dependent on marine fisheries I certainly understand the concerns groups might have that the fisheries might be threatened, but I really have a great deal of confidence in the current system of regulations that prevent that damage. I don’t see that Ballot Measure 4 provides any additional safeguards. It is obvious that it is meant to stop the Pebble Mine, but it is happening at the expense of the entire state.

I speak with a lot of our shareholders across the island (Kodiak), and I think their gut reaction is; we need to make sure we protect the fishery without really understanding that the fisheries are protected, and there are very stringent regulations in place. It almost concerns me. We need to do a better job of educating the people in our region so they understand that this isn’t about protecting the fishery, it is about stopping the Pebble project. I think that really is a challenge – people react to the buzz-words, the ballot initiative, the rhetoric and the advertising without really understanding what the point of it all is.”

Norm Phillips Jr.

President and CEO of Alaska Native regional corporation Doyon Ltd.

We think that Ballot Measure 4 will have a negative impact on our rights as a private landowner here in Alaska. We are very good stewards of those resources important to residents of Alaska – be it the salmon; be it the water; be it the land and plant life; and the people that live in rural Alaska. We take it as an insult to us that a special interest group has decided that we don’t have the ability to do that. So we oppose it.

We do understand natural resource development. We understand the importance of issues that have been raised. Bristol Bay is a unique region. Pebble has the potential to be a very large project. Already in place in state statute and regulations are meaningful thresholds that mining companies must demonstrate related to the development of mineral resources and its impacts on adjoining needs. This state is not going to issue the permits to move forward on a project like this unless all of those thresholds have been addressed.

I don’t think that it is a project that should be raising the concern that it is. This is a special interest – the fish down there and the opportunity to go to those lodges and enjoy that setting without having to fly over a mine site is what’s driving it. I respect that! But there is a process already in place that allows the public to comment and participate.

This ballot measure does more than address that; it is very far reaching, it is very poorly worded, and as a private land owner, it raises basic land ownership rights being taken away from us without any consideration of whether we can do the job or any compensation. We are talking about compensation that is region-wide. The development of our natural resources in the Interior provides significant benefits for our rural communities.”

John Williams

Mayor of the Kenai Peninsula Borough

“Ballot Measure 4 is aimed directly at one potential mining operation, and that is the Pebble Mine. What it does have the propensity of doing though, is affecting virtually every mining operation in the state.

What is the intent of Ballot Measure 4? We have water quality standards in Alaska right now that are some of the most stringent in the nation. The opponents of the Pebble Mine are approaching this thing from a destructive, pollution-type issue; what they are really trying to do is preserve their own lifestyle, their own way of life. The one-man force that is behind it of course is a big lodge owner who doesn’t want anyone over there but him, and he has sworn to spend every dime he has – which incidentally he has made a tremendous amount of his money off of investment of the Alaska Permanent Fund in his bank. It is a one-man war for his own purpose.”

The entire advertising campaign as I see it is fraught with innuendoes and falsehoods. This whole thing about the 700-foot-high dam with a gigantic lake behind it that will explode and wash out the entire countryside is all propaganda. There is so much innuendo being put out there. Albeit, it may be on both sides, but I see so much more of it from the opponents of the mine. Mining has been a traditional industry in Alaska since the beginning, and it will continue to be. Mineral extraction is our main economic force here. We are using our resources to develop our future.

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