By Shane Lasley
Mining News 

EPA wants second look at Kensington plan

The federal agency seeks re-evaluation of gold project's tailings permit; leaders say Supreme Court ruling should be final word


Last updated 7/26/2009 at Noon

The U.S. Environmental Protection Agency has asked the U.S. Army Corps of Engineers to take another look at the tailings disposal permit it issued for the Kensington gold project near Juneau.

In a July 14 letter written by Region 10 Acting Deputy Regional Administrator Michael Gearheard, the EPA advised the Corps to "reevaluate the circumstances and conditions of the permit in view of new information related to the Kensington Mine and Lower Slate Lake disposal site."

The EPA request comes on the heels of a June 22 U.S. Supreme Court decision that upheld the permit that the Corps issued to Coeur Alaska for tailings disposal at Kensington, which is located about 45 miles, or 73 kilometers, northwest of Juneau.

Responding to the high court reversal, the U.S. Court of Appeals for the Ninth Circuit July 8 lifted its injunction against use of the project's permit.

Coeur Alaska, the Alaska subsidiary of Coeur d'Alene Mines Inc., first sought the Lower Slate Lake tailings permit eight years ago and gained regulatory approval for the plan in 2005. The EPA supported the tailings plan throughout the permitting process and for nearly four years afterward, while the permit was tied up in litigation initiated by Southeast Alaska Conservation Council and other environmental groups.

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"Once the Supreme Court speaks, it's supposed to be 'game over,' said Alaska Lt. Gov. Sean Parnell. "We thought we were in the end zone, but the Seattle EPA office is trying to move the goalposts."

Corps initiates public notice

Gearheard, in the EPA letter to the Corps, said changes have occurred since the Lower Slate Lake permits were issued in 2005 that require the agency to modify the permit and put the modified permit out for public notice.

"We believe that there have been significant changes … that not only requires the public notice for the extension request, but also requires the Corps to modify the permit," he wrote.

Among reasons for the request, the EPA cited a reduction in mill capacity (from the 2,000-ton-per-day mill proposed in the 2004 supplemental environmental impact statement to the 1,250-ton-per-day mill currently in place at the project) and exposed sulfide-bearing rock that drained acidic water into a settling pond near Lower Slate Lake as other changes that have taken place since the original permit was issued.

Three days after receiving the EPA request to re-evaluate the Lower Slate Lake tailings permit, the Corps' Alaska District, opened a 15-day comment period on proposed modifications to the permit.

The modifications, requested by Coeur Alaska, would extend the expiration of the permit to July 31, 2014.

The Corps said the changes also include accounting for a topsoil stockpile within a wetland along the Jualin Access Road created as part of 2005 construction activities, proposed placement of an avalanche protection structure and access road, and proposed placement of a topsoil stockpile in the tailings area. This modification, according to the agency, would result in a net reduction of 3.1 acres of fill.

The comment period ends on Aug. 3.

EPA pushes Comet Beach

Though the federal agency's letter initially asks to modify the existing tailings permit, the memo quickly segues to storing paste tailings at Comet Beach.

This tailings plan was proposed most recently by SEACC as an alternative to the Lower Slate Lake option. Ironically, the environmental group had opposed a plan for stacking dry waste rock from the mine at Comet Beach when that idea was approved in 1998.

Coeur d'Alene Mines CEO Dennis Wheeler pointed out the inconsistency in 2007 during a presentation to the Juneau Chamber of Commerce. "SEACC states that they supported Coeur Alaska's previous dry tailings facility option, or DTF, in 1998. This is simply not true. In their comments to the 1997 DSEIS written specifically to evaluate the DTF, Dr. David Chambers (SEACC's consultant) specifically criticized the dry tailings facility proposal."

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The EPA said it now believes that the more expensive paste tailings facility at Comet Beach, not considered by the regulators when the Lower Slate Lake permit was issued, is "a more environmentally protective alternative."

Coeur Alaska explored the Comet Beach alternative a second time after the Ninth Circuit Court ruled against its tailings permit for Lower Slate Lake. But the Idaho-based miner stopped that work when the Supreme Court decided to review the lower court ruling.

The parent company also cited the EPA's apparent preference for a dry stack tailings facility at Comet Beach as one of its reasons for discontinuing work on the paste tailings proposal.

"The agency comments triggered potentially months of delay and substantial issues in completing a timely modified plan review," Coeur said in September 2008.

The EPA said it will commit resources to expedite the permitting process for its new preference, the Comet Beach paste tailings facility. The agency estimated it would take eight months to complete the permitting process.

"We will work on an expedited basis and collaborate with the Corps and other agencies to complete the permitting process for the PTF in an expedited manner. While we appreciate that this will not allow work to resume this summer, we believe that in the long run everyone will be better off if we follow our regulations and go through the prescribed processes," Gearheard wrote.

Delays could cost millions

Coeur spokesman Tony Ebersole said additional delays could cost the company millions of dollars. Ebersole observed that the permit has already been under review for nearly nine years and has faced multiple public comment periods.

"Our country is mired in the worst recession since the 1930s. We need more jobs, not more bureaucratic review," said Gov. Sarah Palin said. "This permit has been studied and discussed and litigated to death. It's time to get to work."

Parnell will take over as governor of Alaska when Palin steps down on July 26. "We've been debating and litigating this for years. The U.S. Supreme Court has spoken decisively in favor of the authority of the Corps to issue this permit. It's time to put those 300 Alaskans back to work - now," he said.

The State of Alaska has supported Coeur throughout its legal battle to retain the Lower Slate Lake tailings permit, and Alaska's lawyers are believed to have played an instrumental role in convincing the high court to take up the case. They argued alongside Coeur's attorneys in both the Ninth Circuit and Supreme courts.

"State officials intend to do everything possible to expedite the issuance of this last required permit," Palin and Parnell said in a joint statement.

Corps favors Lower Slate Lake

While the EPA prefers the Comet Beach tailings plan, the Corps' expert analysis determined that Lower Slate Lake was the "least environmentally damaging practicable" way to dispose of tailings from a gold mine at Kensington.

"The Corps determined that placing slurry in the lake will improve that body of water making it wider, shallower, and so more capable of sustaining aquatic life. The Corps determined furthermore, that the alternative - a heap of tailings larger than the Pentagon placed upon wetlands - would cause more harm to the environment," wrote U.S. Supreme Court Justice Anthony M. Kennedy for the high court justices who voted in favor of the Lower Slate Lake permit.

While the Corps is in charge of the permit for material being dumped into Lower Slate Lake, the EPA requires Coeur Alaska to comply with the standards of a 402 permit for any water being discharged from the lake.

The Court said this compromise is reasonable and fits within regulatory framework.

"I cannot say whether the EPA's compromise represents the best overall environmental result; but I do believe it amounts to the kind of detailed decision that the statutes delegate authority to the EPA, not the courts, to make (subject to the bounds of reasonableness,)" Justice Stephen G. Breyer said, concurring with the majority. "Among other safeguards, EPA has the right to veto any 404 permit that it finds has an unacceptable adverse effect on municipal water supplies, shellfish beds and fishery areas . . . , wildlife, or recreational areas."

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"By declining to exercise its veto, the EPA, in effect, deferred to the judgment of the Corps on this point," Kennedy wrote.

Former Alaska Department of Natural Resources Commissioner and current CEO of the Pebble Partnership John Shively believes a High Court decision should be the final word, but worries the U.S. judicial system is in such disarray that this may not be the case.

"To me a decision that has gone all the way to the U.S. Supreme Court would seem to be the law of the land," Shively told Mining News. "One would think that if the Corps went ahead with something that had been blessed by the U.S. Supreme Court they would be on solid ground. But our judicial system is so screwed up, I'm not sure what will happen."

Alaska Senators meet EPA Administrator

U.S. Sen. Mark Begich, D-Alaska, also believes the Supreme Court ruling decision should put an end to the debate over the Kensington tailings permit.

"All the questions have been answered and the Supreme Court has ruled. Sen. Begich believes this project needs to move forward, (and) we need to put Alaskans to work," Begich spokeswoman Julie Hasquet told Mining News.

While the High Court answered questions concerning the validity of the tailings permits issued by the Corps, Alaska's U.S. senators Begich and Lisa Murkowski, R-Alaska, have scheduled a meeting with EPA Administrator Lisa Jackson to get answers regarding the EPA letter to the Corps.

"EPA Administrator Jackson is coming in on (July 23) to meet with both of the senators. We are hoping to get some clarity and figure out what their role is and what their intention is," Hasquet said.

The senators planned to question the EPA Administrator on where the agency's letter to the Corps originated.

Hasquet said the senators want to know, "Just where did this letter come from? Is it a Washington, D.C. letter that got written on a region level? Where did this start, and is everyone on the EPA level on the same page? "We are hoping (July 23) will be an opportunity to get some of these questions answered and hopefully just move forward and get this project going," Hasquet said.


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