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Committee's answer to whether AJ Mine should reopen: It depends on the kind of mine

Posted: March 30, 2011 - 8:46pm  |  Updated: March 31, 2011 - 5:26am

The city’s AJ Mine Advisory Committee has begun to shape an answer to the mayor’s question: Under what circumstances, if any, should the City and Borough of Juneau promote development of the AJ Mine?

The answer from the sub-committee: It depends upon what kind of mine is being considered.

The panel heard a report from members of its economic subcommittee Wednesday night which explored economic issues related to the mine.

The subcommittee studied the economics of a small mine concept, similar to what Echo Bay had last thought about before it abandoned attempts at reopening the mine.

Presenters at past mine committee meetings have said the biggest reason Echo Bay retreated from it’s 1997 attempt at reopening AJ was because gold prices were less than $400 an ounce and it wasn’t economically feasible to operate that kind of mine.

City Engineer Rory Watt said the committee model envisioned a mine employing 200 people, producing 3,500 tons of rock per day, of which 2,000 tons per day would be processed for gold in an underground mill. Gold and concentrate would be shipped outside Juneau for processing.

Tailings would go in open voids within the mine and depending on local and regional markets, rock would also be sold. It estimated ore reserves of 780,000 ounces of gold and, if mined over 10-12 years, the life of the mine could be longer.

The two-page report also lays rough details of royalty payments for ore and stone, lease payments and taxation.

Greg Erickson, who was also on the sub committee, said they also figured 130 new jobs would indirectly be created in the city — 30 would be new government jobs mostly on the local and state level.

Erickson said those jobs would hardly affect any one industry in the city more than 1 percent. He said the overall growth, given 17,600 existing jobs, would be 1.9 percent overall.

“The biggest thing (the mine) depends on is what kind of mine we’re thinking about having here,” Erickson said. “We want to look at what works as a scenario. We could be doing ourselves a disservice by being too specific. ... It’s clear we have to have a scenario. I am hopeful we will come up with a recommendation to proceed. The key thing is going to be setting the sideboards. I for one want to make sure the comments of the community are considered as possible sideboards.”

He said if some concerns of the community can’t be met, that at least there is a clear reason why.

D. David Chambers, with the Center for Science in Public Participation, gave a presentation on responsible mining and how it applies to the AJ mine. Chambers is a geophysicist by training, has spent 50 years exploring the physics of mining, gas and geothermal and spent 20 years working in non-profit sector.

He explained responsible mining, and how that occurs with regulatory agencies and other organizations. Chambers said state and federal rules are the only ones enforceable, all others are voluntary to a company.

Chambers posed three questions as they relate to the AJ Mine: How will community consent for a mine be measured? Will there be an Environmental Impact Statement and equivalent public involvement (power to challenge the findings of an EIS equivalent) if there is no federal permit to mandate that process? How will “guarantees” made to the community before the mine opens (mining lease) be preserved during operation?

Chambers suggested that the mining lease is not the place to do that. The committee was interested in how they would do it outside the lease. He gave the scenario of the mining company coming to the Assembly saying they can’t afford to put tailings underground anymore so it’s either amend the lease to change the tailings practice or lose 200 jobs. Chambers said Assembly members change over time so the next body may not uphold what the initial panel set out to do. Adding something like a public advisory council, which would have some additional authority in the lease, could help prevent that. That advisory council could be made up of members of the public — non profits, the chamber of commerce director, people with expertise in mining. Chambers said permitting also wouldn’t work because if the city is granting the permit to begin with, it also can change the permit.

Chambers also suggested they look at reasonable mining criteria for the AJ including: underground tailing disposal, underground processing, minimizing traffic, minimizing noise and only standby power generation. Other suggestions included no cyanide-based processing, no surface caving due to mining, insuring water quality and the quantity of CBJ water supply, insuring long-term mine discharge water quality (CBJ liability), and a mining lease royalty.

The committee members now will take a worksheet drafted by Watt and individually draft conditions for topic areas of tailing disposal, mine access, milling, drinking water system, economic, sustainability/energy, traffic, noise/light, local/regional hire, and other areas, such as recreation, environmental, and social concerns.

They are to e-mail back their conditions for how those areas must be if the AJ Mine is to become operational, suggestions due by April 5. Watt will compile an initial draft for the April 7 meeting. On April 7, the committee members will for the first time discuss their positions of what the conditions should be. On April 21, the public will have a chance to comment on the committee’s drafts.

The committee has to have a final report to the Assembly by May 1.

• Contact reporter Sarah Day at 523-2279 or at sarah.day@juneauempire.com.

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