Project to move ahead

Environmentalists press court to expedite lawsuit against Corps

Posted: Friday, March 31, 2006

The Kensington Mine is headed back into full construction after the U.S. Army Corps of Engineers reinstated two disputed environmental permits Thursday.

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"We're preparing to bring another 100 people on," said Scott Lamb, a spokesman for Coeur d'Alene Mines Corp., the Idaho-based owner of the mine, Thursday morning.

Already, 200 employees are working at the gold mine construction site 45 miles northwest of downtown Juneau, but their activity has been muted since late November, when the Corps of Engineers pulled the two permits for internal review.

Coeur's top executive, Dennis Wheeler, said last week in Juneau the company lost roughly $30 million during the review, which had been prompted by an ongoing federal lawsuit challenging the permits.

The lawsuit, alleging Clean Water Act violations by the Corps of Engineers, also will kick into high gear again, Juneau environmental groups said Thursday. The lawsuit contends that the federal law does not permit gold mines to dump their waste in lakes or streams.

"We will ask the judge to decide (the case) on an expedited basis," said Mark Rorick, with the Juneau chapter of the Sierra Club.

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"We believe our case is solid. We wish that it could have been resolved in some other fashion," Rorick added.

The Corps permits were challenged by the Sierra Club, the Southeast Alaska Conservation Council (SEACC), and Haines' Lynn Canal Conservation. The major dispute in the case centered on the permit allowing Coeur to put its tailings, or treated rock waste, in Lower Slate Lake.

"The Corps had a chance to protect our clean water and instead it is taking us backwards to the days when it was OK for industries to pollute our lakes, streams and rivers," said Kat Hall, mining coordinator for the Southeast Alaska Conservation Council.

A second permit reissued by the Corps and still challenged in the lawsuit allows Goldbelt, Juneau's urban Native corporation, to build a dock on its land at Cascade Point to ferry Kensington workers back and forth from the mine on the other side of Berners Bay. Goldbelt President and Chief Executive Officer Gary Droubay said his company has "bent over backwards" over the years to please SEACC and is unhappy that the group keeps blocking development of Goldbelt-owned land.

The dock is part of Goldbelt's long-term strategy for development, Droubay said. The reissued permit contains a potentially significant revision in that it will restrict Goldbelt's use of the dock to activities in support of the mine, regulators said Thursday.

Environmentalists are worried that increasing development and traffic at Cascade Point and in Berners Bay could harm fish and federally listed sea mammals that frequent the area. Because of agreements to protect spawning fish, Coeur and Goldbelt will not be able to begin building their docks until after June 30.

Wheeler said Thursday the company believes it can begin producing gold at Kensington in 2007.

"We're confident the Corps of Engineers has done a diligent job in reviewing the permit," he said in a prepared statement.

Gov. Murkowski and the state's commissioner for natural resources, Mike Menge, also lauded the reissuing of permits Thursday. "This is welcome news for the employees currently working at the site, who were facing potential layoffs," Murkowski said.

Coeur had warned last week that it might have to trim its work force at the mine if the Corps didn't reissue its permit within a couple of weeks.

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