Kensington Mine wins final permit

Regulatory milestone allows Coeur Alaska to launch construction at site

Posted: Thursday, June 30, 2005

Preparations for building the Kensington Mine north of Juneau will begin Friday, developer Coeur Alaska says.

The mining company jumped over its last major hurdle on Wednesday - a water discharge pollution permit from the U.S. Environmental Protection Agency - and will begin moving equipment to the site.

"We are glad that we have received our final major permit and are excited about beginning the project," said Tim Arnold, Coeur Alaska's vice president and general manager.

"Clearly, this is a milestone" for Southeast Alaska, said Gov. Frank Murkowski in a press conference, noting that the project has been in the works since 1987.

Though lawsuits or administrative appeals could ensue, Coeur Alaska plans to bring 300 construction workers to build the mine this summer. A subsidiary of Idaho-based Coeur d'Alene Mines Corp., Coeur Alaska will employ 225 workers when the gold mine begins operations, likely in 2006.

Some Juneau businesses exulted in the upcoming construction Wednesday.

"This will be a great economic engine for the town of Juneau," said Tom Satre, manager of Northland Services' Juneau barge operations.

Northland is one of many companies - from hardware stores to heavy equipment renters - that could directly benefit from the massive construction project, estimated to cost Coeur Alaska $92 million.

A Look at the Kensington mine permit

The Environmental Protection Agency on Wednesday released the Kensington Mine's National Pollutant Discharge Elimination System (NPDES) permit.

The permit, required by the Clean Water Act, will control pollution discharges to three water bodies:

• Sherman Creek

• East Fork Slate Creek

• Lynn Canal

The EPA will regulate heavy metals and other industrial pollutants in the two creeks. The regulated discharge to Lynn Canal includes pollutants from the mine's wastewater treatment plant.

Coeur Alaska will collect weekly samples of its discharges and report monthly results to the EPA, said Patty McGrath, EPA's project manager for the mine.

McGrath said she plans annual mine inspections but will also visit the site if people raise complaints.

Northland plans to bid on a barging contract for the mine. "The two barge companies in town are both in a good position to provide services for (Kensington)," Satre said.

Not everyone is happy.

The mine will bring new jobs and disposable income to spend in local stores, but many Juneau residents who make recreational visits to Berners Bay - where Coeur Alaska plans to build a dock and transport workers and raw materials - say it will damage their quality of life.

Critics also say the mine will harm the bay's unique marine ecosystem, and that its disposal methods violate the Clean Water Act.

Environmental groups, including Juneau's Southeast Alaska Conservation Council (SEACC), will meet on Friday to discuss whether to sue federal agencies that granted the mine's permits.

Mine tailings will be dumped into Lower Slate Lake, near the mine's future processing area. This method is cheaper and reduces energy consumption, according to Coeur Alaska.

Patty McGrath, EPA's project manager, said the permits allowing the company to dump its waste in the lake are based on a policy paper issued by EPA headquarters last year that redefined mine waste as fill material.

"It's really the first time ... that (the new) definition is getting implemented," McGrath said.

In contrast to the U.S. Forest Service, which approved the mine's overall plan of operations, EPA officials say the "environmentally preferable" alternative would have been to put mine rock waste in a dry tailings stack facing Lynn Canal, as the company proposed in the late 1990s.

"We continue to believe it is preferable. However, we have a (different) permit application in front of us and that is the action we are taking," McGrath said.

"Instead of protecting Alaska's clean water, the agencies are sacrificing it for the short-term profits of a private corporation," responded Kat Hall, mining coordinator for SEACC.

"This is the first time since the Clean Water Act came into being that the federal government has basically allowed the dumping of mine waste into a freshwater lake," Hall added.

If they chose to do so, environmental groups could file a lawsuit and injunction request in federal court asking a judge to block activity at the mine site.

Coeur Alaska has some lesser hurdles to cross before it starts construction.

For example, the company must post financial assurances for its $7.3 million reclamation bond.

Also, the Forest Service has to let a timber sale contract on adjacent national forest land that will be cleared to make way for new buildings and a road.

The EPA announced its water discharge permit two days before the mine is allowed to begin in-water construction.

The company was barred from working in the water between April 15 and June 30 to protect Berners Bay's spawning herring.

Arnold, Coeur Alaska's vice president and general manager, said the company will start moving tools, equipment and supplies needed for construction on Friday.

The construction workers will stay in temporary camps at the mine.

"Clearing the areas for the mill and improving the road to the (mill) will be the first priority, along with setting up the temporary construction camp. Following that, the construction of the (buildings) and underground construction will begin," Arnold said.

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