Coeur d'Alene Mines Corp. has terminated a permitting process for building a paste tailings facility for the Kensington gold mine project, which is located 45 miles north-northwest of Juneau.

The decision, which leaves the company relying on the U.S. Supreme Court to uphold the Southeast Alaska mine project's original tailings disposal permit, came after the U.S. Environmental Protection Agency issued comments Sept. 16 on the draft Environmental Assessment for an alternative disposal site at Comet Beach on the north side of Berners Bay.

Coeur, working in cooperation with the South East Alaska Conservation Council, had submitted an application to federal agencies in January seeking a permit to store tailings from the mine in paste form at Comet Beach, a site regulators had previously approved for more controversial dry-stack tailings.

Idaho-based Coeur had anticipated having the alternative tailings permit in hand by the end of the year.

The EPA has requested additional information about dry-stack tailing, a move that will potentially cause months of more delays, the company said.

EPA delays spur termination

Storing paste tailings at Comet Beach was not Coeur's first choice. The miner sought and obtained a permit, issued by the Army Corps of Engineers, to dispose of tailings from the mine underwater in Lower Slate Lake, a small land-locked body of water with no aquatic life.

Coeur, which has spent more than $230 million building the mine, had been pursuing both tailings disposal options in an attempt to have the mine in production before the end of 2009.

Coeur spokesman Tony Ebersole told Mining News in July that the objective was is to try to get the mine into production.

"Our goal is to get it going by late next year and either one of these alternatives would allow for that," he said.

The EPA's requests, nine months into process, would delay the permits several more months, Ebersole said Sept. 23.

This prompted the company to cancel its application for the paste-tailings permit in favor of awaiting a U.S. Supreme Court ruling on Coeur's original tailings disposal permit. BBC Human Resource Development Corp., a group focused on training and employing Alaska Natives at Kensington, said the EPA requests are the direct result of a federal agency over-reaching.

"The EPA had the opportunity to focus its attention on the paste tailings plan; a plan that all sides agreed to. But instead it insisted that Coeur Alaska study yet another alternative - EPA is asking too much, too late," the group said Sept. 24 in a statement.

SEACC, however, said it does not see any "showstoppers" in the EPA's requests, and still believes the paste-tailings plan could be permitted before the Supreme Court ruling, which is expected early next year.

Permit battle lands in high court

The court battle began when SEACC and other environmental groups challenged the Kensington Section 404 Permit issued by the Corps several years ago. Though the wet tailings disposal plan had survived federal and state regulatory scrutiny, the anti-development activists filed suit to block the plan on the grounds that it violated provisions of the federal Clean Water Act.

The environmentalist took their case to the Ninth Circuit Court of Appeals after an August 2006 ruling in which the U.S. District Court of Alaska in Anchorage upheld the mine permits. In May 2007 the appeals court negated permits issued by the Corps and the U.S. Forest Service.

In June the Supreme Court, which only hears about 7 percent of the cases that come before it on appealed, agreed to review what could become a precedent-setting case.

State wants certainty

The State of Alaska played an instrumental role in convincing the Supreme Court to review the case. State attorneys argued that the importance of the case goes beyond Kensington. If the high court overturns the appeals court ruling, it would set a precedent with important implications for future mines in Alaska and elsewhere.

Arguments over the legitimacy of the permits center on whether the tailings permit falls under the jurisdiction of the Corps or the EPA.

In the brief filed with the U.S. Supreme Court Sept. 17, Alaska attorneys argue that according to the Clean Water Act, fill material and tailings fall under the jurisdiction of the Corps.

"Indeed, the history of the CWA confirms that Congress intended to continue the Corps' longstanding authority to regulate all fill material, which for more than 120 years has been exercised to regulate discharges of mine tailings. And even if the statute were ambiguous, the agencies' consistent and longstanding division of regulatory responsibilities is reasonable," state attorneys wrote in briefing the high court.

Gov. Sarah Palin said the Supreme Court's decision should provide direction on how certain federal technology standards that are in addition to state water quality standards, should be applied in determining the location of tailing impoundments for future projects.

"We need the Supreme Court to decide once and for all what the federal rules are for dealing with mine tailings," Palin said. "The federal laws have been interpreted differently by different courts at different times. The resulting uncertainty makes it more difficult for everyone involved in the permitting of mines in Alaska."

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Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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