Hard rock, hard choices

Kensington gold mine nears permit deadlines

Posted: Sunday, July 25, 2004

On a recent Monday afternoon, Rick Richins fished a large piece of quartzite ore studded with glittering particles from the floor of a dark, dripping tunnel at the Kensington gold mine.

Richins pointed to where the rock came from - the ceiling of the tunnel, where a several-foot-wide gold deposit called the Horrible Vein emerged like a ghostly underground river of chunky white rock.

"It really blows my mind," said Richins, the project manager for Coeur Alaska's proposed Kensington mine. "And we don't really know the whole extent of this deposit."

Just a few years ago, the proposal to reopen the mine, perched near one of Juneau's favorite recreational spots, Berners Bay, was idling. Gold prices were in the pits and Coeur decided to hold off on the project because it wasn't profitable.

But then gold prices rose and Coeur Alaska came up with a new plan it says will allow it to ride out price blips and make a good profit off its rich Kensington deposits. This summer, Coeur Alaska is awaiting final environmental permits for the mine. Hearings on a number of draft permits are being held in Juneau and Haines on Monday and Tuesday, respectively.

Coeur says the new Kensington proposal is smaller and better for the environment. But because it has a much greater effect on Berners Bay than the previous plan and includes dumping mine tailings - the crushed rock from which gold has been extracted - into an alpine lake, environmentalists heartily disagree.

"They (the government) have redefined Kensington's mine waste as fill and the precedent that could set nationwide is horrible. What we'd like to see is for the Environmental Protection Agency to put the public's interest in clean water over corporate profits," said Kat Hall, a grassroots coordinator with the Southeast Alaska Conservation Council.

Lance Miller, executive director of the Juneau Economic Development Council, said the Kensington mine will help diversify the local economy and add to the tax base.

"The important thing is that it creates wealth in a responsible manner. We have the opportunity in Juneau to capitalize on our natural resources," he said.

Compounding environmentalists' concerns about the mine, state officials are preparing a proposal this summer for a road that would connect the state capital to Skagway and could require bridges over three rivers in the Berners Bay watershed.

Also, U.S. Sen. Lisa Murkowski is attempting a land exchange in Congress that would put several thousand acres of national forest land in Berners Bay into private ownership by Native corporations.

"There is a big issue of what Juneau wants Berners Bay to be," said Ed Fogels, the state's project manager for review of the Kensington mine. "The real impacts from the mine are negligible. It's the other stuff that comes along with it that is the harder issue."

One private development project on the edge of the bay may begin this summer. Goldbelt, Juneau's urban Native corporation, which owns land at Echo Cove and Cascade Point, has received approval to build a 2.5-mile gravel road to Cascade Point, an undeveloped rocky shore, where it plans to operate a dock and ferry for daily use by Kensington mine workers.

Goldbelt also hopes to pique state interest in a daily commuter ferry service from Cascade Point to Haines, and its own master plan includes building a community of homes and businesses, said David Goade, the corporation's executive vice president. For now, these are just ideas, he said.

Goldbelt's plans for development depend heavily on the Kensington mine or other opportunities that lie in the future as Juneau grows.

"It could be 50 years from now, or it could be tomorrow," Goade said.

New mine versus old mine

In contrast to its 1997 plan for the Kensington mine, Coeur Alaska now hopes to run a project that costs less, consumes less energy and takes up a smaller amount of land.

The drawbacks, according to environmentalists, are that the project has now expanded its major operations from the Lynn Canal side of Lion's Head Mountain to wildlife-rich Berners Bay.

The processing mill and a dam for Lower Slate Lake would be built in the forest on the west side of Berners Bay. The Kensington mine and mine camp would face Lynn Canal.

According to Coeur's calculations, dumping tailings in Slate Lake will cost one-fortieth of the original plan to stack them in covered cells behind a 100-foot-high berm at Lynn Canal. The cost estimate of building a Slate Lake dam and related infrastructure is $91.5 million and a dry tailings storage is $227 million. The operating cost for hauling tailings to Slate Lake is 25 cents, whereas dewatering and stacking the tailings at Lynn Canal is $10.37 per ton, according to Coeur figures.

Alaska regulators say that this element of the new plan has been much more controversial than the 1997 plan.

"There are a lot of people who think it's fundamentally wrong to put tailings in the bottom of a lake," said Fogels, a geologist in the Alaska Department of Natural Resources.

"The impact will be the lake will change. ... It will be full of tailings. But the biologists agree that the tailings are benign. You can restore that lake," Fogels said.

On the other hand, EPA regulators and Coeur officials said they haven't reached agreement about how to handle the discharges of tailings water over the Lower Slate Lake dam into a lower creek.

"They aren't regulating what's going into the lake, only what's coming out," said Hall of SEACC.

Another major difference between the new plan and the 1997 plan is the transport of workers and materials to Berners Bay's Slate Creek Cove rather than Lynn Canal's Comet Beach. Mine workers would travel to work daily in a 78-foot, 150-passenger catamaran from a dock at Cascade Point, on the east side of the bay, to Slate Creek Cove, on the west side of the bay. They would ride a bus to their job sites. About four barges per week would transport fuel, supplies and concentrate to and from the mine.

The cove is better protected from bad weather than Comet Beach, but it is heavily used by endangered Steller sea lions who chase eulachon into the cove during their spring feeding in Berners Bay.

"If the construction of the Slate Creek marine terminal occurred in April-May, a significant impact on Steller sea lions could take place," according to the Kensington Gold Project's Draft Supplemental Environmental Impact Statement, issued in January.

The report says it is unclear how sea lions and other sea mammals would respond to routine vessel traffic in the bay, but it states traffic on the west side of Berners Bay at Slate Creek Cove could disturb sea lions and humpback whales. Those disturbances could range from significant to "no effect."

Addressing the effect on sea mammals "is the part of the project that has been least defined," said Carl Shrader, a habitat biologist who has worked on the project for the Alaska Department of Natural Resources.

He said another important factor that needs further analysis in Berners Bay is the potential effect of the mine and other future developments on Pacific herring and eulachon.

"These are very, very important to marine birds and mammals," he said, adding. "We've agreed with Coeur to begin a monitoring program."

What's next

A number of draft environmental permits are under review for the Kensington mine, with a final public comment date of Aug. 5.

The city also must issue an allowable-use permit for the mine, 45 miles northwest of downtown Juneau.

Before most final permits will be issued, however, the Juneau District of the Tongass National Forest will complete its final Supplemental Environmental Impact Statement for the mine, which selects a final alternative for proceeding with the mine. District Ranger Pete Griffin said he hopes to complete the statement in November.

The Forest Service has been involved with the project since 1990. Griffin said he hopes the draft statement, which has received more than 100 comments split in a 3-2 ratio for and against the project, "should make a fairly reasoned choice easier."

Once it issues a final impact statement, the Forest Service will make a final decision on the project, and the other agencies will issue or deny permits. Then, the project is subject to an appeals period.

If Sen. Murkowski's proposed land transfer, which would affect several thousand acres of federal land around and below the Kensington project, is approved by Congress this year, the Forest Service will no longer be involved in the project. Instead, the project would be managed by the Alaska Department of Natural Resources and other state agencies.

Coeur officials said they are optimistic they can start construction of the mine in the fall.

"Maybe it's good that it's taken so long to get to this point, because the project is better," said Richins, Coeur Alaska's project manager for the mine.

Goldbelt's Goade said he thinks the mine and development at Cascade Point won't significantly harm the bay.

"I think it's going to be OK. I really do. People are going to be able to kayak into the bay and have a good time. It's still pretty quiet and untouched," he said.

But he said the proposed road out of Juneau and resulting outcry from many Juneau residents "has kind of compounded everything. It just seems like a lot. But who knows if the road is going to go through there?"

John Hudson of the environmental group Friends of Berners Bay thinks that unless Coeur and the state significantly revise their current plans for mining and road building, Berners Bay is "a place that's more or less pristine heading to industrial development."



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