The U.S Supreme Court heard oral arguments Jan. 12 in a case that challenges Coeur Alaska Inc.'s federal permit to dispose of tailings from the Kensington gold mining project into a nearby lake. Though the wet disposal plan had won approval from federal and state regulators, environmental groups sought to block it, arguing that it violated provisions of the federal Clean Water Act.

Coeur Alaska's parent, Coeur d'Alene Mines Corp., took the case to the nation's highest court after the Ninth Circuit Court of Appeals overturned a lower court ruling that upheld the U.S. Army Corps of Engineers permit. Southeast Alaska Conservation Council and other environmental groups that opposed the miner's plan for wet disposal of the tailings had sued the federal agency, claiming the permits were invalid.

The Kensington gold project is located 45 miles or nearly 73 kilometers northwest of Juneau. Coeur has spent more than $230 million building the Southeast Alaska gold mine on the premise that it had all the permits in hand to go into production. Construction is finished on all of the project's facilities except for a tailings disposal system. For a few months last year, Coeur Alaska considered building a paste tailings disposal system that the environmental groups endorsed but gave up the idea when the U.S. Environmental Protection Agency requested additional information, a move that Coeur said would cause months more of delays.

The argument before the Supreme Court centered on whether the tailings to be deposited into Lower Slate Lake - a small, inland body of water with little aquatic life - should be classified as a fill material or a slurry because water is mixed into them. The classification would determine which federal agency would have oversight of the tailings disposal under federal law.

Individuals who attended the Jan. 12 hearing told Mining News that the Supreme Court justices peppered lawyers from both sides with tough questions for an hour.

Fill or effluent?

Much of the oral arguments centered on defining how to classify tailings from Kensington.

The State of Alaska, Coeur Alaska and federal regulators argued that the tailings are properly classified as fill and the current permits issued by the Corps are valid.

Opponents of the plan argued that the water added to the mine waste so it can be transported via a pipeline transforms the tailings into an effluent and should be required to meet guidelines of a 402 permit issued by the EPA.

Chief Justice John Roberts, Jr. asked Solicitor General Gregory Garre, "Can a pipe both emit sludge, fill, and effluent?"

Garre, who represented the federal agencies, said the agencies defined the discharge as fill.

Justice Anthony Kennedy asked the environmental groups' lawyer, Thomas Waldo, whether or not a single pipe could contain both effluent and fill material.

"The position that EPA has taken in this case, unfortunately, is that, if the discharge meets that definition of fill material, no matter how bad the consequences are for water quality, its fill material, and it's therefore exempt from effluent limitations," Waldo replied.

Consider the source

Justice Antonin Scalia rhetorically asked Waldo if the justice were to pump sand off his property into a river, would that violate the Clean Water Act.

After the environmental lawyer confirmed that the discharge indeed would be a pollutant, Scalia said he could dump the sand into a lake and it would be considered fill.

Waldo backed slightly away from his assertion that Scalia would be allowed to fill the lake with sand, saying the source of the sand would need to be considered.

"Effluent limitations are adopted for industrial sources, so you would have to look at what the source of that discharge was," Waldo added.

Does adding water matter?

The chief justice grilled Waldo about why adding water to the discharge makes a difference in the permitting process.

"Is there a point at which it's proper to speak of it as a solid rather than a suspended solid?" Roberts asked.

After slipping in the point that in this case the discharge of wastewater is prohibited, Waldo conceded that "there might be some point at which the liquid content of a solid waste is so small that EPA wouldn't regard it as processed wastewater anymore."

On a roll, the chief justice then asked Waldo, "So, if they were just putting whatever it is that doesn't have any water, concrete, into this lake, then you agree that it would be just the Corps of Engineers through the fill provisions that would govern that?"

When the environmental lawyer agreed, Roberts asked, "And so, if they chop up the concrete and put a little water in so that it's easier to move, then all of a sudden it comes under 402 and the EPA's jurisdiction?" "It would depend on if EPA has adopted an effluent limit for it," Waldo replied.

"I guess I'm just curious how that makes any sense, since we are talking about putting something into water," said Roberts. "Does it really matter whether you add the water before it goes into the lake or just the lake adds the water when you put in the solid?"

Roberts did not wait for a response to his query.

When does EPA step in?

Theodore Olson, an attorney for Coeur Alaska and the State of Alaska said that in addition to the 404 permit for material going into the lake there is a 402 permit for the material coming out of the lake into the waters of the United States.

Justice Stephen G. Breyer, in an attempt to determine at what point the EPA steps in to enforce its standards, posed a hypothetical situation of using the worst pollutant known to man, which turned out to be cholesterol for the sake of demonstration, to fill the bottom of the lake.

"It just can't be that simply because they poured a lot of it in and it fills up the bottom of the lake that suddenly the EPA can't regulate it any more," Breyer commented.

Replied Olson: "If its fill, the administrating, permitting agency is the Army Corps of Engineers. But in granting that permit, in evaluating that permit, they must follow the 404(b)(1) guidelines that were drafted and written by the EPA, and EPA has all sorts of provisions. It can't have an adverse effect on the water."

Breyer continued to question Olson about the difference between being regulated under the Corp (404) regulations or under the EPA (402) regulations.

Scalia boiled down the difference. "(Under 402) you can violate the effluent guidelines by pouring into the waters of the United States even nontoxic materials, and under 404, it's only toxic."

Olson told the justices that the discharge from the Kensington mine is sand and rock and will not change the chemistry of the lake.

The fish

By filling up the lake, it would kill all the fish, Waldo said.

"All the fish; there are a thousand fish in this lake, right?" the chief justice asked. "And those aren't endangered fish; there are millions of them somewhere else, right?

Justice David Souter asked Olson, "It is going to kill everything in the lake, right?"

"They are going to re-introduce the fish," Olson replied. "It will be a bigger lake with a better aquatic system when it's finished."

Justice Ruth Ginsburg asked, "And how do we know that life will ever be restored?"

"Many different agencies are involved in this permitting process. The permits in this case followed 900 studies, the expenditure of $26 million, an evaluation by the EPA, the Corps of Engineers, the department of conservation of Alaska, and finally before the permit could be issued, it had to go to the EPA and the EPA had the power to veto the permit," Olson explained.

EPA has the right to veto

Garre had pointed out that the EPA has the authority to veto a section 404 permit.

When Waldo was asked about the EPA's veto authority, the environmental lawyer said the EPA would only use the authority if it found unacceptable adverse consequences.

Waldo's response prompted Justice Stephen Breyer to ask, "And wouldn't an unacceptable adverse consequence be that it puts all this effluent into the water?"

Though the EPA may not have found unacceptable consequences, the discharge had a high PH level, about 10, which makes it toxic, Waldo replied.

This prompted Justice Samuel Alito, Jr. to ask Waldo how far from the discharge the water was diluted to normal levels. The lawyer conceded that it happens just outside the pipe.

Unclear how justices will decide

Individuals present during the hearing told Mining News that it remains unclear how the court will decide this precedent-setting case.

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.

"We need the Supreme Court to decide once and for all what the federal rules are for dealing with mine tailings," Gov. Sarah Palin said when the Supreme Court agreed to hear the case.

While the case may have implications for the mining industry in Alaska and across the nation, Coeur Alaska would like to be able to operate the Kensington Mine. With all the facilities complete, except for tailings, the company awaits the high court's decision.

Though it is unclear when the Justices will make a ruling in the Kensington case, most anticipate it in the second quarter of the year. Coeur hopes to begin production by the end of 2009.

Author Bio

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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