EPA puzzled by Coeur Alaska pullout

Scientist says company made decision without consulting the agency

Posted: Thursday, September 25, 2008

The U.S. Environmental Protection Agency permit coordinator for the Kensington gold mine was surprised to hear Coeur d'Alene Mines Corp. blame her agency when it pulled out of the permit process.

While the company announced EPA comments on the environmental review of the mine would trigger months of delay, Patty McGrath was expecting they would be addressed in a couple of weeks.

"They made this decision on their own, without discussing it with us first, which is why we don't understand why they're pointing to our comments as the reason for the delay," McGrath said.

Coeur announced it was canceling the permit process Tuesday, and the EPA on Wednesday scrambled to find out what the problem was. McGrath had a teleconference with other agencies to discuss the permitting schedule. It was on track for public release by Oct. 8, she said.

Surprised, she called the company.

"I asked Coeur what specifically their issues were, and they kept repeating their analysis of our comments as requesting a new alternative be analyzed. And I explained to them, that's not what we requested at all."

Federal law requires that the proposed plan for a tailings facility be compared with alternatives. Each alternative requires thorough study. But the EPA's comments, according to McGrath, simply asked for more information on the four alternatives already presented.

Moreover, so much environmental study has been done on the mine, which has been through several longer environmental impact statements over the years, that McGrath suspected Coeur likely already had the information the agency was requesting, and just needed to document it better.

Coeur Alaska referred calls this week to its parent company, Idaho-based Coeur d'Alene Mines, which announced the permit cancellation. Coeur d'Alene spokesman Tony Ebersole would not give details of the "new alternative" the EPA's comments supposedly required, citing legal advice.

Coeur is returning to a tailings plan that will require the U.S. Supreme Court to rule in its favor. The high court agreed to hear the case but has not scheduled oral arguments yet. The mine now estimates a late 2009 start to production if the court rules favorably.

Three environmental groups will continue to fight the plan to dump tailings into Lower Slate Lake, which they successfully sued to stop. The Southeast Alaska Conservation Council, Lynn Canal Conservation Inc. and the Juneau Group of the Sierra Club say the plan violates the Clean Water Act. They supported the now-abandoned paste tailings plan.

A JP Morgan analyst downgraded Coeur d'Alene's stock Wednesday to "Neutral" from "Overweight" upon hearing the mine had abandoned its paste tailings plan. The analyst estimates the mine accounts for 23 percent of the company's net assets.

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

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