Knowles plans to fight Red Dog mine decision

Posted: Wednesday, August 14, 2002

ANCHORAGE - The state will fight a federal appeals ruling that requires the Red Dog mine to use more expensive anti-pollution technology for its power, Gov. Tony Knowles said Tuesday.

State attorneys will appeal the ruling to the U.S. Supreme Court while Knowles asks the head of the federal Environmental Protection Agency to drop the case, he said.

The 9th U.S. Circuit Court of Appeals sided with the EPA in a dispute with state environmental regulators and the mine operator over its diesel generators.

Tech Cominco Inc., which operates the zinc and lead mine owned by the NANA Corp., had planned to begin operating a seventh diesel generator for additional power.

The company had permission from the state Department of Environmental Conservation to refit all its generators with a lower-cost method of reducing nitrogen oxide emissions.

But the EPA overruled the decision, instead favoring a newer "selective catalytic reduction" technology on the new generator. The EPA was not proposing the other generators be modified.

State officials argued that their plan would reduce overall emissions and that the "selective catalytic reduction" technology was unproven in arctic conditions.

State officials filed a lawsuit two years ago after they were unable to reach an agreement with the EPA. The federal appeals panel ruled in July that the EPA had the right to require the more effective technology.

The ruling would require Teck Cominco to spend an additional $10 million to comply with the EPA rules and an additional $1.5 million annually without reducing pollution, the Knowles administration said.

"This is a mine operating at the edge of viability, with low world zinc prices," Knowles said. "For two years, we've been trying to negotiate a resolution with the EPA that recognizes common sense and Alaska's unique conditions and protects Alaskan jobs."

This week, Knowles plans to ask EPA Administrator Christie Whitman to drop the case. Whitman was appointed by President Bush and took office after the lawsuit was filed.

The Red Dog mine, 90 miles north of Kotzebue, is the largest zinc mine in the world and employs 400 people.

The mine is the Northwest Arctic Borough's major economic engine, providing 14 percent of total employment there and a quarter of the region's total wage base.

Teck Cominco announced in May that it expected to lose between $40 million and $50 million in 2002 after reporting a $25.3 million loss the previous year.

That announcement came after zinc prices plummeted to 35 cents a pound, the lowest price in 17 years.

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