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By Shane Lasley
North of 60 Mining News 

Corps gives go-ahead for Kensington Mine

After years of litigation, Coeur Alaska prepares to construct tailings facility; EPA tells state agency it will not oppose permit

 

Last updated 8/30/2009 at Noon



The U.S. Army Corps of Engineers Aug. 14 re-issued a long-disputed tailings permit to Coeur Alaska for the Kensington Mine. Modifications to the permit extend its expiration to 2014, offsetting the four years it was tied up in litigation.

A letter from the Region 10 acting deputy regional administrator of the U.S. Environmental Protection Agency in July advising the Corps to "re-evaluate the circumstances and conditions of the permit in view of new information," raised many questions as to whether a recent U.S. Supreme Court decision upholding the permit's validity would be the final word in the dispute.

The EPA's actions also caused some to question whether the federal agency would exercise its right under the Clean Water Act to veto the Corps' decision to re-issue the tailings permit.

Alaska Department of Environmental Conservation spokeswoman Weld Royal told Mining News Aug. 21 that staff from EPA Administrator Lisa Jackson's office called DEC Commissioner Larry Hartig and informed him that the "EPA has decided not to veto the Corps decision."

That decision apparently removes the final obstacle to Coeur Alaska completing construction of the Southeast Alaska gold mine.

Construction begins

Coeur said it will resume construction immediately at the mine located about 45 miles, or 73 kilometers, northwest of Juneau. The subsidiary of Idaho-based Coeur d'Alene Mines Corp. expects to finish construction of the tailings facility in time to begin production in the third quarter of 2010.

Kensington is expected to produce about 120,000 ounces of gold per year over a 12.5-year mine life, based on current proven and probable mineral reserves. Cash operating costs are projected to average US$475 per ounce.

Coeur has already spent about US$300 million developing Kensington, and it estimates remaining construction and mine-related capital costs to bring the mine into production will cost another US$70 million.

"There is an extensive list of groups and individuals to thank for their efforts and continued support of Kensington. The company looks forward to getting back to accomplishing the main objective, which is to construct and operate a world-class gold mine that all stakeholders will be proud of," said Coeur d'Alene President and CEO Dennis E. Wheeler.

A joint venture between Alaska-based contractor AIC and Kake Tribal Corp., one of Alaska's 220 Native village corporations, has been awarded the civil and piping contract for the tailings facility. Electrical work for the project went to Juneau-based ALCAN Electrical & Engineering Inc.

Coeur said both ALCAN and the AIC-Kake Tribal joint venture are available for immediate mobilization of personnel.

"We are pleased to make this award to these highly skilled Alaska-based union contractors and look forward to bringing Kensington into production next year," said Kensington General Manager Tom Henderson.

Senators applaud decision

U.S. senators Mark Begich D-Alaska and Lisa Murkowski, R-Alaska, who quickly contacted the EPA's Jackson to get answers regarding the agency's July letter to the Corps, applauded the Corps' decision to grant the modified permit.

"I am pleased to hear that, after reviewing the facts and more than 8,500 public comments, the Army Corps of Engineers made the right decision," Begich said. "The Corps has extended the permit issued in 2005 to Coeur Alaska authorizing the company to construct a mine tailings storage facility in Lower Slate Lake at the Kensington gold mine in Southeast Alaska."

"This is a decision that's both good for the environment and Southeast's struggling economy," Murkowski said. "Kensington will provide hundreds of badly needed jobs and tax revenue, while having a minimal affect on the environment."

Nearly 300 workers will be needed to complete construction the tailings facility, and once in production, the mine will employ about 200.

 

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