Land swap could help open mine

Exchange of USFS acreage would consolidate land near Kensington

Posted: Friday, April 26, 2002

A proposed land trade involving U.S. Forest Service property near Berners Bay could help plans to reopen the Kensington mine, according to developer Coeur Alaska.

Coeur, a subsidiary of Idaho-based Coeur D'Alene Mines Corp., said the Cape Fox Land Entitlement Adjustment Act of 2002, introduced this week by U.S. Sen. Frank Murkowski, would make it easier to develop the multi-metal mine about 45 miles northwest of downtown Juneau, between Lynn Canal and Berners Bay.

The land trade bill involves the U.S. Forest Service, the Saxman-based village Native corporation Cape Fox Corp. and the Juneau-based regional corporation Sealaska.

The proposal would exchange land held by Sealaska and Cape Fox near Ketchikan for Forest Service land around the mine site. The agreement would allow Coeur to consolidate lands already held in the area with privately held lands near the mine site.

Murkowski said the bill will help Cape Fox diversify its portfolio of income-producing lands by facilitating a transition from the corporation's dependence on timber harvests.

Murkowski's office said the bill has not been scheduled for a hearing, but it expects prompt movement on the proposal.

Coeur said development of the mine would last at least 15 years and employ 325 workers during construction and 225 during the mining process. The company also projects Coeur would spend at least $7.5 million locally a year during construction of the project and $1.5 million during regular operation of the mine.

"Southeast Alaska's economy needs this project," said Coeur d'Alene Mines CEO Dennis Wheeler in a prepared statement. "This region's fishing and logging businesses are eroding and its economy is vulnerable to tourism and government cutbacks."

The land trade has come under fire from environmental groups because of plans by Coeur to place mine tailings, or waste rock, in a muskeg lake in the area.

"Dumping mine tailings in lakes near Berners Bay is a bad idea," said Southeast Alaska Conservation Council Executive Director Katya Kirsch. "Giving away pristine Tongass National Forest lands to a private corporation to do this is still worse."

Kirsch said a plan submitted last year proposed dumping mine tailings in Slate Lake, which falls within the Berners watershed. She argued the mine tailings would have a negative impact on recreational opportunities and area fisheries.

Coeur said the new plan is more environmentally sound than one released in 1998, which included on-site cyanide processing of ore.

"We want to make this the best environmental project we can," Coeur Alaska Sr. Vice President Rick Richins said in a prepared statement. "We believe our plan does just that."

Coeur has been trying to reopen the historic mine for years. It was last given permits by environmental regulators in 1998, but the falling price of gold made the project economically unfeasible.

Richins said the revised project will impact 25 percent less land than a plan permitted in 1998.

"There would be no long-term loss of wetlands and minimal impact on fish and wildlife. And no salmon would be affected," Richins said.

But Haines resident Gershon Cohen said dumping mine tailings in Slate Lake would violate the federal Clean Water Act. He said the plan will be challenged in court if it wins approval.

Cohen, a national project director on water pollution issues for the conservation group Earth Island Institute, said Coeur aims to impound the body of water and declare it a wastewater facility.

"It would allow them to say that the water is no longer a water body of the United States," Cohen said. "Those are supposed to be fishable and swimable waters."

In a related announcement, Coeur said Thursday that it has approved the selection of the Colorado-based company Tetra Tech Inc. to conduct an environmental impact study for the project.

Timothy Inklebarger can be reached at timothyi@juneauempire.com.



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