Former Tulsequah mine CEO wants it back

State asks that acid drainage be cleaned up with pending mine transfer

Posted: Wednesday, April 28, 2010

The state of Alaska wants any new owner of the Tulsequah Chief mine to show it can afford to clean up acid mine drainage leaking into the Taku River watershed, as well as have a viable plan with a timetable to do the clean-up.

Michael Penn / Juneau Empire
Michael Penn / Juneau Empire

State officials made the comments in a letter submitted this week to the British Columbia Environmental Assessment Office, after being invited to comment on a pending transfer of the mine to a new company.

The new company, Chieftain Metals Inc., incorporated in Canada late last year under Terence Chandler, the former CEO of Redfern Corp., which tried to open the mine but went bankrupt in March 2009.

BC officials tried to keep the name of the pending new owner secret at the request of bankruptcy receiver Alvarez & Marsal Canada Inc., but Alaska was able to determine the new company's name, according to the state's letter.

The lawyer for the receiver declined to comment Tuesday, and Alvarez & Marsal's Canada office telephone was not answered. Chandler also could not be reached for comment.

The pending transfer has renewed interest among environmentalists, who also submitted a letter outlining concerns over attempts to open the mine, which is located about 40 miles from the mouth of the Taku River along the Tulsequah River in British Columbia. The Tulsequah is a tributary to the Taku, a prized salmon fishery.

In addition to acid mine drainage, there's concern among Alaskans about how ore would be transported to market from the backcountry location. Redfern tried to build an air cushion barge, also called a hoverbarge, to transport minerals down the river but the experimental nature of the vehicle raised wide concern among river users.

In a letter to BC officials Monday, Rivers Without Borders and Taku River Reds describes a history of "past broken promises" by the mine's owner and expressed concern over a new company's potential plan for barging.

"There were documented incidents of groundings of conventional barges and tugs, and the proposal for industrial barging had the very real potential to harm the water quality and fisheries in the Taku," the groups wrote.

In its letter, the state asked BC officials about the status of a wastewater treatment plant that was reportedly removed from the site after Redfern filed for bankruptcy. Past mining activity is causing sulfuric acid to leach heavy metals such as zinc, copper, cadmium and arsenic into the river.

Several state departments have tried to communicate with BC about the acid mine drainage but never received responses, the state wrote.

In addition, Redfern owes Alaska more than $77,850 in unpaid permitting fees for the hoverbarge permitting process. The state also asked about Chieftain's plan for paying the debt.

• Contact reporter Kim Marquis at 523-2279 or kim.marquis@juneauempire.com.



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