North of 60 Mining News - The mining newspaper for Alaska and Canada's North

A Fairbanks-based environmental group that appealed a federal water discharge permit issued to developers of the Pogo gold project in mid-March has agreed to withdraw its permit challenge, following meetings with regulators on May 4 and 5. The announcement of the appeal withdrawal came May 5 during a press conference at the governor's office in Fairbanks.

Initial meetings between the Northern Alaska Environmental Center and the Environmental Protection Agency May 4 spurred a late night meeting with others involved in the Pogo gold project permitting process. During the meetings, an agreement was hammered out for the environmental group to withdraw its appeal filed in mid-April of a water discharge permit issued by EPA in mid-March for developers of the Pogo gold project, 40 miles northeast of Delta Junction, Alaska.

In exchange, Teck-Pogo Inc., the company which secured permits and started pre-construction work at the Pogo gold deposit this spring, agreed to add two water monitoring wells at the off-river treatment works and to fund a $20,000 annual fish study of the Goodpaster River for the next 10 years.

Teck also agreed to support a stakeholder group that will review the project. Seven members, representing fishing, mining, neighboring residents, hunting, subsistence and the environment, will make up the advisory board. In addition, Teck-Pogo "codified" an agreement to monitor changing trends in water quality measurements and to evaluate those trends and potential causes before water quality standards are exceeded, said Karl Hanneman, the developer's manager of public and environmental affairs and special projects manager.

Teck-Pogo plans to meet "immediately" with its contractors and put together a plan for construction, he added. The number of workers dropped from its peak of 340 down to 183 workers, Hanneman said on May 5. The company will wait for the EPA water discharge permit to be finalized, which should happen within a week, he said. "We're very pleased to be going back to work," he said.

The Northern Center must submit a letter to EPA's Environmental Appeals Board, requesting their appeal be withdrawn, said Ed Fogels, DNR's project manager for the Pogo gold project. He was uncertain on May 5 how long the appeal withdrawal will take.

Water discharge permit needed during construction

Without a water discharge permit, Teck-Pogo could not service its water and sewage treatment plants used for its temporary camp facilities to house construction workers.

Since the appeal was filed in mid-April, the company has been laying off construction workers already on the project, a move that angered local labor unions. Dozens of union members protested the environmental group's actions outside the Northern Center's office in Fairbanks on April 30.

Withdrawing part or all of the permit would require another round of regulatory review, including public comment periods, which require mandated periods of time, noted David Thompson, deputy chair and CEO of Teck Cominco, during an April 27 investor conference call about the company's first quarter results. "Any amendments to the permit would cause significant delay," he said. "If it is amended, it must go back through the EIS process. We have to have that permit."

List of conditions

During the last week of April, the environmental group requested a third-party moderator for its talks with regulators and the developer. Brian Rogers, a Fairbanks-based businessman, served as that moderator.

On April 30, the environmental group submitted to the developer a list of conditions for its appeal withdrawal.

"The company spent Saturday (May 1) trying to figure out if the things on the list are doable," Fogels said, on May 3. "We have not seen the list." Such an action is not typical of a permit appeal process, he said. "This is an effort to short circuit the appeal process and ultimately have them withdraw their appeal. The appeal process could take from six months to a year to complete."

Other companies respond

Unfortunately for Alaska's mining industry, damage from the environmental appeal has already hit. Two exploration projects planned in the Pogo area were cancelled, said Curt Freeman, a Fairbanks-area consulting geologist. "Two projects just evaporated overnight - they put everything on hold until further notice," said Freeman, owner of Avalon Development. That exploration work was in excess of $500,000, he said.

"That money is going elsewhere, where those companies feel a little more comfortable about where their investment is going." Pogo's successful permitting process this spring had sparked additional interest in Alaska's mineral industry, Freeman said. "Everyone was fired up, and it looked like the district would pick up."

Northern Dynasty, which plans to spend $20 million this year to develop the Pebble deposit near Iliamna, Alaska, said the appeal does not "affect our commitment of resources to advancing our project," said Bruce Jenkins, director of corporate affairs. "But it is a cause for concern to receive all the permits and then have an 11th hour appeal is problematic. We realize it is always possible and we will factor that into our planning."