Kensington decision to be early test of Obama on mining issues
The public comment period closes Aug. 3 on minor revisions to the
U.S. Army Corps of Engineers' Section 404 fill permit for the
Kensington Mine near Juneau.
However, the big uncertainty hanging over the project is whether
the Corps will accede to the U.S. Environmental Protection Agency's
July 14 request for an extended delay in the permit.
If the Corps doesn't go along with the EPA, the environmental has
authority to veto the Section 404 permit, according to the Corps of
Engineers' Alaska spokeswoman, Pat Richardson.
Kensington is a medium-sized underground gold mine near Berners Bay, about 40 miles north of Juneau.
The controversy is shaping up to be an early test of policies of
President Barack Obama's administration on mining and environmental
issues because it will ultimately be resolved in Washington, D.C.
There are no deadlines for decisions by the Corps or the EPA, so
the issue could drag unresolved into the fall, jeopardizing hopes by
Kensington developer Coeur d'Alene Mines to get the mine finished and
into production this year.
EPA's Region 10 wrote the Corps July 14 asking for the delay,
citing new information that was not available when the Corps approved a
permit allowing mine developer Coeur Alaska Inc. to dispose of
Kensington mine tailings in a small lake. That permit was hotly
contested, and the case wound its way up to the U.S. Supreme Court.
In June, the high court ruled 6-3 that mine tailings could be disposed of in Lower Slate Lake near the mine.
The court issue revolved around whether the tailings are viewed as
fill material like gravel or whether tailings are a form of waste that
cannot be placed in a water body, as conservation groups and the EPA
Despite the legal win for the company, the battle flared anew when
the EPA sent its letter. If the Corps judges the new information cited
by EPA as important enough, it may have to agree to the agency's
request. Or, if the Corps doesn't agree, EPA may use its veto authority
over the federal permit. Section 404c of the Clean Water Act gives the
EPA that authority.
Alaska's congressional delegation is wading into the fight. The
state's two senators, Lisa Murkowski and Mark Begich, criticized the
EPA's action and met with EPA Administrator Lisa Jackson July 24.
Then-Gov. Sarah Palin and current Gov. Sean Parnell also expressed
concern about potential further delays.
"In June, the U.S. Supreme Court ruled that the U.S. Army Corps
of Engineers has the authority to permit Kensington mine to deposit
rock waste into Lower Slate Lake in the Tongass National Forest. EPA's
letter appears to do an end run around the Supreme Court," Murkowski
said in a statement.
Parnell said, "This is frustrating. Once the Supreme Court speaks
it's supposed to be 'game over.' We thought we were in the end zone,
but the Seattle EPA office is trying to move the goalposts."
Ironically, Coeur may have helped create the problem the project
now faces. The most substantial new information is a proposal that
Coeur developed for an alternative dry-land tailing disposal method,
which environmental groups supported, and which the company put forth
when it looked as if the lake disposal plan would founder in the
Coeur backed away from the dry-land disposal after it had applied
for permits, and took a gamble that the Supreme Court would approve its
earlier plan to use the lake, which it did.
The company feels it has now a valid federal permit for the lake
disposal and that it should be allowed to finish the mine and get it
"The company has a valid and legal 404 permit (Army Corps of
Engineers Section 404 permit) as ruled by the U.S. Supreme Court in a
6-3 decision, and as supported by the EPA and the corps in nine years
of permitting and nearly three years of litigation," Coeur spokesman
Tony Ebersole said in a statement.
In its July 14 letter, EPA Region 10 Deputy Regional Administrator
Michael Gearheard said that Coeur's alternative on-land disposal plan,
a paste tailings facility, which was put forth by the company in 2008,
was well along in the process of being approved by federal agencies,
including the EPA, when the company withdrew its application.
"The Corps did not evaluate the paste tailings facility in its
analysis of alternatives at the time it issued the current Kensington
404 permit in 2005," Gearheard wrote.
The alternative plan had not yet been proposed by Coeur at the time.
"EPA believes that the paste tailings facility could have less
environmental impact than the Lower Slate Lake disposal site that was
permitted, and therefore the permit should be reevaluated in view of
the new information concerning this alternative," Gearheard said in the
July 14 letter.
Gearheard cited two other new factors, one that the mining rate
now proposed - 1,250 tons per day - is less than the rate studied in
the project's environmental impact statement - 2,000 tons per day -
which translates into a change in the amount of tailings produced and
the environmental effects.
A second new factor is the recent excavation of sulfide-bearing
rock near Lower Slate Lake that resulted in acid rock drainage into a
settling pond near the outlet from Lower Slate Lake and East Fork Slate
Creek. The presence of this potential environmental harm needs to be
assessed, Gearheard said.
Both of those will be weighed by the Corps in its decision on the
404 permit but Southeast community officials say they believe it is the
existence of the paste and fill proposal made by Coeur, and which was
not evaluated by the Corps, that may loom larger in the final outcome.
Murkowski said she believes the EPA's objection is legally and
factually flawed, and that the EPA is now trying an end run around the
"The Slate Lake disposal option was first developed in
cooperation with the EPA. The Corps issued a Clean Water Act Section
404 permit to the project in 2002. Environmental groups sued Coeur in
2006, claiming the mine's owners should have applied for a permit from
the EPA," Murkowski said in her statement.
"EPA was part of the federal government's defense of the
validity of the Corps' Section 404 permit. At no time in the
development of the proposal during the Clinton administration, during
the Bush administration when the suit was filed, or during the Obama
administration while the high court's decision was pending, did the EPA
object to the Slate Lake disposal plan," Murkowski said.
The mine is basically finished but completion and production are being held up over the controversy of the mine tailings.
Coeur has about 40 workers on staff now doing maintenance-related
work and has told Juneau city officials it would put about 100 to work
right away to complete the project if it gets the go-ahead. In
production, the mine would add more than 200 new jobs in Southeast
Originally published in the Alaska Journal of Commerce on July 31, 2009