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Coeur drops tailings plan

In surprise move, Kensington Mine operator gambles on Supreme Court decision

Posted: Wednesday, September 24, 2008

Coeur d'Alene Mines Corp. announced Tuesday that due to delays in the permit process, it is abandoning its paste tailings plan for the Kensington gold mine. Instead, the mine operator is pursuing a plan that will require a favorable decision from the U.S. Supreme Court.

Brian Wallace / Juneau Empire File
Brian Wallace / Juneau Empire File

The move is potentially a new delay for a mine that was supposed to be close to starting production after nearly two decades of development. Earlier this year the mine estimated an early 2009 start. The new estimate is late 2009 - if the high court rules in its favor.

The decision also means that Coeur has chosen to fight environmental groups, instead of going with a plan they support.

"We think the paste facility is the best way to go. It protects Berners Bay, it protects clean water, and it will get Juneau working," said Russell Heath, executive director of the Southeast Alaska Conservation Council.

Last year, the mine was forced to cancel its plan to deposit mine tailings into Lower Slate Lake, after SEACC, the Juneau Group of the Sierra Club and Lynn Canal Conservation successfully argued its permit violated the Clean Water Act.

Tailings are ground-up waste rock that result after metals are removed from ore. Idaho-based Coeur d'Alene Mines Corp. owns Coeur Alaska Inc., the mine operator.

Since the 9th Circuit Court of Appeals decision, the mine company has been pursuing two plans at the same time.

One was for the environmentalist-approved paste tailings plan. The mine submitted a plan in January to remove much of the water from the tailings and deposit the resulting paste on Comet Beach, which lies on Lynn Canal.

Meanwhile, the company has been progressing in its appeal to reinstate the Lower Slate Lake plan. The Supreme Court in June said it would review the case. Oral arguments have not been scheduled but are expected to be in early 2009. The state of Alaska has joined Coeur on the appeal.

The U.S. Forest Service was coordinating an environmental assessment on the paste tailings plan that federal agencies required to permit the project. In late August, Forest Service District Ranger Pete Griffin was expecting the review would be completed by late this month - close to schedules anticipated earlier in the year.

Coeur balked at the U.S. Environmental Protection Agency's Sept. 16 comments on the review, saying they "triggered potentially months of delay and substantial issues."

"They were asking us to essentially look at new and different alternatives for review," said Coeur d'Alene spokesman Tony Ebersole. "And some other issues arose relative to that."

Ebersole would not say what exactly in the EPA's comments would delay the permit so much. The company's letter calling off the Forest Service also doesn't describe the issues.

EPA officials involved in the permit process did not return calls Tuesday.

Heath said he, too, was wondering what caused the delay. EPA's comments were made public yesterday, but the draft environmental review the comments refer to hasn't been released.

"There are no showstoppers in there," Heath said after his analysts reviewed the comments. "Their estimate is that those issues could be cleared up in two to three weeks."

Those who knew the process inside and out were also baffled by Coeur's move.

"As the lead agency, we were rather surprised today, too, by this turn of events," said minerals program manager Jeff deFreest at the Forest Service. "We were looking at having that draft together in the next couple of weeks."

Bill Martin, president of Tlingit & Haida Central Council, was copied on the EPA's comments. After he heard from Coeur that it would delay production, he went to Washington, D.C., last week for a tribal consultation with government agencies involved in the permit process. He said he was disappointed.

Coeur Alaska agreed to hire at least 12.5 percent Alaska Natives, but has so far well exceeded that rate. Martin believes the jobs will be a lifeline to Southeast villages facing hard times.

"To me, it was just a stunning setback," Martin said. "Delays are very costly to us."

Of Coeur's Supreme Court gamble, he said, "They must think they have a good case."

Juneau Mayor Bruce Botelho facilitated discussions last year between the mine and conservation groups, both of which pledged to work together.

He suggested all sides take a time-out "to allow for a careful review of the EPA's concerns and an opportunity for the agency to modify its position."

The city of Juneau, he said, "recognizes that the Kensington project is a vital part of the community's immediate economic future."

• Contact reporter Kate Golden at 523-2276 or e-mail kate.golden@juneauempire.com.



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