Corps to suspend mine permit for internal review

Federal attorneys want judge to put Coeur Alaska lawsuit on hold

Posted: Thursday, November 10, 2005

The U.S. Army Corps of Engineers intends to suspend a legally disputed permit for the Kensington gold mine's planned discharges into a subalpine lake to re-evaluate the permit, according to court filings.

Department of Justice and Corps attorneys said in a federal court motion filed late on Tuesday that the Corps of Engineers may "reinstate, modify or revoke the permit."

But before suspending it for review, federal attorneys would like U.S. District Judge James Singleton to put on hold a lawsuit that seeks to block the lake discharges by mine developer Coeur Alaska.

Three environmental groups - the Southeast Alaska Conservation Council (SEACC), the Sierra Club and Lynn Canal Conservation - had planned to file written arguments in the lawsuit today.

The federal attorneys told Singleton in their motion that "it is possible that some or all of the allegations of the (lawsuit) may be rendered moot or otherwise resolved" because of the Corps of Engineers' review.

The Corps' legal maneuver was a surprise to state officials, environmentalists and Coeur Alaska, who are all embroiled in the lawsuit over the permit.

For now, construction of the mine about 45 miles northwest of downtown Juneau is continuing.

"Until we know otherwise, or have more information, we are continuing to build as permitted," said Luke Russell, vice president for environmental operations for Coeur d'Alene Mines Corp., of Idaho, which owns Coeur Alaska.

"We were surprised, but we remain confident that the Corps did the right thing ... that the permit they issued was done correctly," Russell added.

Environmentalists disagreed. "I certainly think the Corps' action confirms our contention that the permits are flawed ... that they are not legaI," said Russell Heath, SEACC's executive director.

State officials and environmentalists speculated Wednesday that the Corps will most likely revise and reissue the permit in the near future.

Federal agency officials in Alaska declined to be interviewed Wednesday about the Corps' plans.

Those officials deferred all questions to Department of Justice personnel in Washington, D.C., who did not respond to phone calls.

The disputed permit, called a Section 404 permit, involves the disposal of millions of tons of rock waste into Lower Slate Lake northwest of Juneau. It allows the waste to be defined as "fill" and it is an integral part of mine developer Coeur Alaska's current plan of operations.

State officials and environmentalists consider the lawsuit challenging the water permit a litmus test for future regulatory mining decisions across the United States.

For now, the parties involved are left wondering how the Corps' action Tuesday will affect construction at the mine. Russell said the mining firm hasn't had any word from the Corps of Engineers on how to proceed. He said his company awaits the judge's decision.

"We're obviously optimists," Russell said. But he added, "There certainly is need for more clarity."

In addition to allowing the disposal of tailings, or rock waste, into Lower Slate Lake, the permit also authorizes Coeur Alaska to fill wetlands as part of its construction of the mine.

Coeur contractors have already filled wetlands as part of their roadbuilding and prep work for the mine's future processing mill.

A second Section 404 permit would also likely be suspended when Singleton issues his decision on whether to suspend the lawsuit.

In a secondary legal complaint, environmentalists have alleged that the Corps failed to consider potential harm from the construction of a mine-related dock and ferry terminal at Cascade Point by Goldbelt, Juneau's urban Native corporation.

The federal attorneys stated in their motion Tuesday that if Singleton agrees to remand the first permit, the Corps of Engineers will also suspend Goldbelt's permit for the Cascade Point dock.

Most of the mine's major permits were issued this summer, and construction began in early July.

Environmentalists filed their lawsuit on Sept. 12. Singleton recently agreed to expedite the case and final briefings are scheduled for Dec. 19.

Goldbelt, the state of Alaska and Coeur Alaska have petitioned to intervene in the lawsuit on behalf of the Corps and the U.S. Forest Service, which is also named in the case.

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