Legislature(2005 - 2006)Anch LIO Conf Rm
08/31/2006 01:00 PM House RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Kensington Mine Issues | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
JOINT MEETING
HOUSE RESOURCES STANDING COMMITTEE
SENATE RESOURCES STANDING COMMITTEE
August 31, 2006
1:06 p.m.
MEMBERS PRESENT
HOUSE RESOURCES
Representative Ralph Samuels, Co-Chair
Representative Jay Ramras, Co-Chair
Representative Paul Seaton
Representative Kurt Olson
Representative Carl Gatto
Representative Gabrielle LeDoux
Representative Harry Crawford
SENATE RESOURCES
Senator Tom Wagoner, Chair
Senator Ralph Seekins, Vice Chair
Senator Fred Dyson
Senator Bert Stedman
Senator Kim Elton
MEMBERS ABSENT
HOUSE RESOURCES
Representative Jim Elkins
Representative Mary Kapsner
SENATE RESOURCES
Senator Ben Stevens
Senator Albert Kookesh
OTHER LEGISLATORS PRESENT
Representative David Guttenberg
COMMITTEE CALENDAR
KENSINGTON MINE ISSUES
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
Presenters were:
REPRESENTATIVE BRUCE WEYHRAUCH
Alaska State Legislature
MIKE MENGE, Commissioner
Department of Natural Resources (DNR)
ED FOGELS, Acting Deputy Commissioner
Anchorage Office
Office of the Commissioner
Department of Natural Resources (DNR)
KURT FREDRIKSSON, Commissioner
Department of Environmental Conservation (DEC)
LYNN TOMICH KENT, Director
Division of Water
Department of Environmental Conservation (DEC)
CRAIG TILLERY, Deputy Attorney General (AG)
Civil Division
Department of Law (DOL)
HOWARD GREY
Alaska Miner's Association
RUSSELL HEATH, Executive Director
Southeast Alaska Conservation Council (SEACC)
TIM ARNOLD, Vice President/General Manager
Coeur Alaska, Inc.
ACTION NARRATIVE
CHAIR THOMAS WAGONER called the joint meeting of the House and
Senate Resources Standing Committees to order at 1:06:27 PM.
Representatives Samuels, Ramras, Seaton (via teleconference),
Gatto, and LeDoux, and Senators Wagoner, Dyson, Stedman (via
teleconference), and Elton (via teleconference) were present at
the call to order. Representatives Olson (via teleconference)
and Crawford, and Senator Seekins arrived as the meeting was in
progress.
[Chair Wagoner handed the gavel over to Co-Chair Samuels.]
^KENSINGTON MINE ISSUES
1:08:02 PM
CO-CHAIR SAMUELS announced that the only order of business was
the hearing on the Kensington Mine Issues.
1:08:40 PM
REPRESENTATIVE BRUCE WEYHRAUCH, Alaska State Legislature, stated
the following:
I'm calling in to voice our district's strong support
for Kensington Mine and the environmental stewardship
it has shown in its permitting process in the work to
date on this mine.
1:10:11 PM
MIKE MENGE, Commissioner, Department of Natural Resources (DNR),
noted that years ago he worked for the Department of
Environmental Conservation (DEC) pertaining to environmental
quality, and, during that service, he had "a passing association
with the permitting process." He stated that [the Kensington
Mine] project has been under the regulator's scrutiny since
1990. Hundreds of studies on the issue have been completed, and
every issue has endured major scrutiny. He said there comes a
point where a fundamental decision must be made as to whether
the state will support mining or not. He said the state has the
most rigorous permitting program in the nation; Alaska's large
project mining plan coordinates with the federal government's.
He said at the end of the stringent process, when the permit
writers have agreed on a plan, the chances of there being a
problem have been reduced "as far as humanly possible."
Commissioner Menge related that quality individuals have been
involved on all sides of [the Kensington Mine] project, and he
expressed pride in the decision that was reached and the role
that DNR played in facilitating the permit process. He said
"these folks" don't support anything that is unethical, and he
asked the committee to keep that in mind while listening to the
ensuing testimony.
1:14:20 PM
ED FOGELS, Acting Deputy Commissioner, Anchorage Office, Office
of the Commissioner, Department of Natural Resources (DNR),
noted that before he served in his present position, he was the
state's mining coordinator and the main agency official on the
Kensington Mine project during the three-year permitting effort.
He offered a PowerPoint presentation on the permitting aspect of
the Kensington Mine [hard copy handout included in the committee
packet]. The second page of the handout shows an aerial
photograph of the Berner's Bay area, Slate Creek Cove - the
proposed dock site, and the proposed tailings disposal area at
Lower Slate Lake. The next page, he noted, shows a closer view
of Lower Slate Lake. He explained that a dam would be
constructed across the outlet of the lake. After ore was
extracted from the ore body, the mining operation would process
the ore, and the tailings - the waste stream from the process -
would be pumped back under ground and backfilled under the mine.
However, not all the tailings will fit underground, so the plan
is to pump the remainder into Lower Slate Lake. As the tailings
settle to the bottom of the lake, the level of the lake would
rise, and ultimately, behind the dam there would be a bigger
lake with a bottom full of tailings.
1:16:56 PM
MR. FOGELS turned to the next page of the PowerPoint, which is
titled, "State Agencies Large Mine Permitting Team," and which
lists the following agencies: DNR, DEC, Alaska Department of
Fish & Game (ADF&G), the Department of Transportation & Public
Facilities (DOT&PF), the Department of Commerce, Community and
Economic Development (DCCED), and the Department of Law (DOL).
He named Tom Crafford as being the State Mining Coordinator,
noting that that is a position that he himself currently held.
He said the permitting team is experienced; many have been
members for over 15 years. Mr. Fogels turned to the next page
of the handout, which shows the major regulatory requirements.
The following permits were issued through DNR: reclamation plan
approval and bonding; Title 41 fish passage permit; water
rights; right of way; dam safety certification; tidelands leases
for dock facilities at Slate Cove and Cascade Point; and the
coastal zone consistency determination. He listed the permits
issued by DEC, which are: Section 401 certification of the U.S.
Army Corps of Engineers (USACE) wetlands; Section 401
Certification of the U.S. Environmental Protection Agency's
(EPA's) National Pollutant Discharge Elimination System (NPDES)
permit; sewage treatment system approval; and air quality. In
response to a question from Co-Chair Samuels, he explained that
USACE will issue the "404" wetlands permit and, by law, DEC has
to certify that permit; it's a state concurrence for the
wetlands permit.
1:19:32 PM
MR. FOGELS, in response to a question from Representative Gatto,
explained that a wetlands permit allows the permittee to fill
wetlands. He said:
Each time ... [USACE] goes through the process,
they'll make a determination as to what the
environmental impacts are of filling that wetland, and
then in some cases they may require ... mitigation,
and that might be replacement wetlands somewhere else,
that might be a monetary contribution somewhere, so it
... varies case by case.
1:20:02 PM
REPRESENTATIVE LeDOUX asked what contribution or mitigation was
required in the case of the Kensington Mine.
1:20:16 PM
MR. FOGELS answered he is not sure.
1:20:27 PM
MR. FOGELS continued to the next slide in the handout, which
shows [an elevation] map of Lower Slate Lake. He explained that
the heavy black line shows what the contour of the lake is
projected to be at closure, and the straight line at the bottom
of that contour is where the dam would be. He noted that the
contour lines show that Lower Slater Lake is very deep, and
light does not penetrate very far into it. Because of that, he
said, there is very little productive habitat in the lake. Part
of the reclamation plan is to create more productive habitat in
the lake, because as the water line rises, there will be more
shallow areas.
1:22:02 PM
MR. FOGELS outlined the reclamation plan approval, as shown on
the next slide in the handout. He said all mines must have a
plan, which must be approved by DNR. As part of the plan, he
relayed, the mines must post a bond of financial assurance to
ensure that the state or the federal government can reclaim the
property if the mining company "can't do it for some reason."
In response to a question from Representative LeDoux, he said
Alaska Statute allows the state to accept bonds in various
forms. Some examples, he said, are: maturity bonds that are
managed through a third-party company, gold, and letters of
credit. The latter, he noted, is the most common form of
financial assurance. He offered further details.
1:23:32 PM
CHAIR WAGONER asked if there have been any cases in which
letters of credit have been issued to the state and there has
been a default.
1:23:47 PM
MR. FOGELS recalled one example having to do with the Illinois
Creek Mine, in which the Dakota Mining Company went bankrupt and
the state had to call in a letter of credit. He said
unfortunately the bond was established too long ago and, thus,
was too inadequate to "do the job." He noted that the story
turned out okay, because the state found another way to reclaim
the mine, but it learned a valuable lesson about paying
attention to the amount of the bond. He directed attention to
the next slide in the handout, which shows how financial
assurance, or bonding, works. First, he said, a detailed
engineering analysis is done to find out what the cost of
reclaiming the project would be. The mining company provides
information to assist in that analysis.
1:25:45 PM
MR. FOGELS said the bond for the Kensington Mine project
includes capping of the tailings, if needed, which he said is
significant. He said a cap of organic materials would enable
the recolonization of the lake. Mr. Fogels said the bond is
periodically recalculated throughout the life of the mine, which
allows the bond to be adjusted for changing prices, such as the
rising of fuel prices. He said the Kensington bond is
approximately $7.3 million, and it is in the form of a letter of
credit.
1:26:39 PM
MR. FOGELS directed attention to the next slide regarding the
Title 41 fish habitat/fish passage permit. This permit is
required any time work has to be done in fish-bearing waters.
He noted that there are three permits along Johnson Creek;
however, the key permit is the Lower Slate Lakes Tailings
Impoundment, which requires that the lake be reclaimed. He read
a paragraph in the permit as follows:
The tailings in Lower Slate Lake are expected to have
very low toxicity. Following reclamation, the larger
and shallower lake is expected to provide habitat for
macroinvertibrates and forage fish that will support a
population of Dolly Varden [and] char. If monitoring
shows the tailings are not suitable for colonization,
the tailings will be capped with clean material. We
anticipate the reclaimed area will provide
overwintering, spawning, and rearing habitat for Dolly
Varden [and] char.
1:27:51 PM
SENATOR DYSON asked if the rocks that will be put in the lake
will be "very like the native rocks that are in and around the
lake now."
MR. FOGELS answered yes.
SENATOR DYSON noted from the prepared materials that cyanide and
other chemicals would not be used in the refining process. He
asked, "Will there be anything in the process that would
increase the toxicity of those rocks any [differently] than the
native rock in the area?"
1:28:33 PM
MR. FOGELS confirmed that cyanide will not be used at the
Kensington Mine site; however, he said there will be chemicals
used to process the ore. He said the ore is ground finely into
a dust-like consistency, mixed with water, and then mixed with
flotation rations. He continued:
Essentially, they form like soap bubbles, and they
bubble up ... this mixture of ore and water, and the
bubbles will pick up certain minerals. And you can
design the chemistry of the flotation rations to pick
up the minerals that ... you want it to trap. They'll
float to the top, get scrapped off, and what settle
down, that's the waste product and the tailing. So,
these flotation rations are chemicals, and they are
used in the process. They're nowhere near as toxic as
cyanide is. They can be toxic in large quantities,
but they do biodegrade, and all the projections show
that once they're put in the lake, they'll be
entrained within the tailings or biodegrade in the
water above the tailings. It should eventually return
to clean water standards.
1:29:50 PM
REPRESENTATIVE LeDOUX asked if other material is put over the
tailings to ensure that the tailings don't leach into the water.
1:30:12 PM
MR. FOGELS replied yes. He explained that the tailings "settle
out" and form "a discreet layer at the bottom of the lake," at
which point, if needed, another organic layer can be added that
would settle down and completely cover the tailings. He
estimated that last layer would be about six inches deep.
1:30:24 PM
REPRESENTATIVE LeDOUX asked what guarantees that the tailings
don't "get through the capping."
1:30:39 PM
MR. FOGELS responded that the tailings form a solid layer. He
said, "The material that is going to be placed on top is likely
to be some kind of ... organic material - ... ground up top soil
material from the area - so it will form a layer of,
essentially, mud. The tailings should not mobilize; they'll be
deep enough where wave action won't really pick things up. And
so, the projections are that it should settle out quite nicely."
1:31:16 PM
MR. FOGELS continued with his presentation, pointing to the
slide in the handout relating to dam safety certification. He
said the dam must be designed to certain standards, which
include seismic standards. Moreover, there has to be financial
assurance for the long-term care and maintenance of the dam. He
brought attention to the next slide, which shows a cross section
drawing of the Lower Slate Lake tailings, and he emphasized the
comprehensive technological engineering review that is used in
the process of creating the dam.
1:32:18 PM
REPRESENTATIVE SEATON said recently the Fort Knox Mine operation
has changed its permit from using the aforementioned operation
to that using a "heap-leach cyanide operation." He asked what
the potential is for the Kensington Mine to decide it is more
economical to use this method.
1:32:53 PM
MR. FOGELS suggested that a mining company representative could
better explain the nature of the ore body and the mining
operation. Notwithstanding that, he shared his view that a
heap-leach operation is more suited to a large, open-pit
operation such as Fort Knox than is would be to [the Kensington
Mine]. Irrespective of that fact, he said, if the Kensington
Mine were to decide it wanted to change its mine plan so
significantly, it would need a whole new set of reviews and most
likely an entirely new environmental impact statement done on
the mine, which would take a number of years to do.
MR. FOGELS turned to the next slide, which lists the other
federal agencies involved in the review as follows: the U.S.
Forest Service, which is the lead agency; the U.S. Environmental
Protection Agency; USACE; the U.S. Fish and Wildlife Service;
and the National Marine Fisheries Service. He brought attention
to the next slide, which shows the major federal regulatory
requirements, and he highlighted the first two on the list: The
first is the U.S. EPA Section 402 NPDES Water Discharge Permit,
related to any water leaving the lake and going over the dam
into the creek below. Mr. Fogels said there is a treatment
plant proposed for that water, which would monitor and test the
water so that it meets water standards required by law. The
second is the USACE Section 404 Dredge and Fill Permit, which is
the wetlands permit subject to current litigation. He explained
that the two key federal permits triggered the National
Environmental Policy Act, which required the environmental
impact statement, and that was the driver behind the most recent
process that resulted in a recommendation of the Lower Slate
Lake tailing facility as the preferred alternative.
MR. FOGELS stated that "the overall Kensington process" began in
1990, with the original application, and the first EIS was
completed in 1992. The company then revised its mine plan and
submitted another operation plan, for which another EIS was done
and completed in 1997.
1:35:45 PM
CO-CHAIR SAMUELS asked if another EIS would have to be done in
the event that SEACC is successful in its court challenge and
tailings are not allowed in the lake and instead must go back to
the dry-stack. In other words, he asked, "Once you've gotten
the second one, is the first one no longer valid?"
1:36:14 PM
MR. FOGELS said the answer to that question is complicated. He
explained that the company changed its entire mine plan
dramatically from that of the last EIS and would have to
significantly change the plan again to utilize the dry-stack
facility.
1:37:11 PM
CO-CHAIR SAMUELS asked the following question of Mr. Fogels,
saying that he would ultimately like those representing the
Department of Law to answer the question as well:
... If capital expenditures had been made on one side
of the mountain because the permits were issued in
good faith and everybody operated in good faith, and
then it is turned around and thrown out by the federal
courts, is there liability that either the state has
or [USACE has] ... if that capital expenditure now has
to be moved?
MR. FOGELS responded that he cannot answer the question and,
thus, he deferred to the Department of Law. Continuing with his
presentation, he brought attention to the PowerPoint slide
showing the "Kensington Process," which notes that the current
application was submitted in November 2001, followed by a public
process in the summer of 2004, and a final EIS and record of
decision (ROD) issued in December 2004. He said the state
permits were issued in May 2005, and the federal permits were
issued in June and July 2005. The next slide shows a row of
binders filled with permit applications and mine studies. He
offered his understanding that if all the studies that were done
in the previous processes were added together, the total would
be over 900.
MR. FOGELS directed attention to the next two slides, which show
aerial photographs of the Red Dog and Fort Knox Mines. He said
those mines are relevant to what is going on with the Kensington
Mine currently. He said the Red Dog Mine pumps its tailings
into Red Dog Creek. He continued:
I show this slide just to point out that I think one
of the fundamental concepts of this litigation is that
these tailings should be permitted under EPA's 402
process as a clean water discharge rather than as
wetlands fill, which would prohibit, basically,
putting those tailings in any water bodies or
wetlands. And so, I think if you draw the litigation
out to its logical conclusion, and if it goes in favor
of SEACC, I doubt very seriously that Red Dog Mine
would have been permittable.
MR. FOGELS, in response to a question from Co-Chair Samuels,
said he does not think such a determination by the 9th Circuit
Court would invalidate the Red Dog Mine's current permit;
however, he said he is not 100 percent certain of that answer.
1:40:09 PM
REPRESENTATIVE LeDOUX asked, "What effect would this have on
[the] Pebble [Mine]?"
1:40:26 PM
MR. FOGELS answered that the Pebble Mine, and any other future
mine, could potentially have a much more difficult time getting
permitted. He proffered that it would be difficult to build a
mine in Alaska without putting tailings in wetlands. In
response to a follow-up question from Representative LeDoux, he
specified that it is his opinion that it couldn't be done.
MR. FOGELS, in response to a question from Co-Chair Samuels,
clarified, "If you had to put tailings in wetlands, I think if
you follow the reasoning behind this lawsuit, you could reach
the conclusion that you shouldn't be putting mine tailings in
wetlands - period."
1:41:40 PM
REPRESENTATIVE LeDOUX asked for a definition of "wetlands."
1:41:57 PM
MR. FOGELS answered that under the Clean Water Act, wetlands are
defined broadly as including: lakes, streams, bogs, and swamps.
He said there is a definition as to the type of soils and
vegetation. Mr. Fogels concluded by emphasizing that there
currently is a strong process between the state and the federal
government that considers projects individually on their own
merits. He said tailings from a mining project vary; every
single mine has a different type of tailing stream that is
produced. The Red Dog Mine, for example, has reactive tailings
that have to be treated carefully, while other mines -
Kensington being one - produce benign tailings that are not
reactive at all. He indicated the importance of studying the
tailings from each mine to discern their character, determining
the type of wetland involved, and analyzing the environmental
impacts. He relayed that agencies need to have the discretion
to base their decisions on those factors, and he said it is the
state's opinion that that process should happen on a project-by-
project basis.
1:43:37 PM
SENATOR ELTON asked for a definition of wetland fill, mine
waste, and mine tailings.
1:44:02 PM
MR. FOGELS stated that mine waste can include a number of
different products from a mine, including development rock from
the mine adit or, in the case of an open pit mine, the
overburden that is on top of the ore body. The tailings, he
explained, are the waste product that come out of the milling
process and are subject to some kind of treatment, for example,
cyanide or a floatation process. He said it is sometimes hard
to handle, to get it to stack up - an expensive process. He
said waste products essentially are either development rock or
tailings, and both, in certain circumstances, have to be handled
with care. Mr. Fogels said wetland fill is defined in federal
law and statute and the current definition lists mine tailings
as being included in possible fill product.
SENATOR ELTON remarked:
There has been an evolution over a long period of
time. Just to let the members know, ... the original
proposal for tailings was to go straight into Lynn
Canal off the beach. The second was the dry-stacking,
and then Slate Lake obviously is the third.
1:47:01 PM
KURT FREDRIKSSON, Commissioner, Department of Environmental
Conservation (DEC), said the department has issued 401
certification related to the Kensington Mine project. He
directed attention to page 3 of the DEC handout, describing the
information as useful in guiding DEC's review of the project.
He explained that DEC's permit authority is exercised in
conjunction with the federal agencies, in this case primarily
with USACE, under the 404 fill permit, and with EPA, under 402
of the Clean Water Act. The latter, he said, relates to the
discharge off the dam into the lake creek. He said the issue
with DEC is a question of where the point of compliance occurs
related to water quality standards. The federal government
regulates the activity and DEC undertakes 401 permits for both
the federal 404 and 402 permits.
1:49:37 PM
LYNN TOMICH KENT, Director, Division of Water, Department of
Environmental Conservation (DEC), offered further details on the
topic of the permits.
The committee took a brief at-ease to address some technical
difficulties.
MS. TOMICH KENT continued with her presentation. She relayed
that it is the federal permit framework that is at the center of
the challenge that has been filed by SEACC and "others." She
said the previously mentioned 402 and 404 permits are known by
the authorizing sections under the federal Clean Water Act. She
noted that a 404 permit is required for the discharge of fill
material to waters of the U.S. She said the federal definition
for discharge of fill material includes the discharge of almost
any substance that has the effect of changing the bottom
elevation of a water body. The definition specifically includes
the placement of mine tailings. The federal definition for
waters of the U.S. is broad and includes: lakes, rivers,
streams - including intermittent streams, mud flats, sand flats,
wetlands, slues, prairie potholes, wet meadows, "file" lakes or
natural ponds, and the territorial sea. Basically, she
summarized, the definition includes anything on the surface that
is wet. Essentially, she explained, a 404 permit is required
"when almost anything is placed into almost any kind of a water
body or a wetland." She said that in the particular case of a
mine tailings impoundment, a Section 404 permit is typically
required both to fill an area to construct a dam and to "place
the tailings within the impoundment that occurs behind the dam."
MS. TOMICH KENT, addressing the Section 402 permit, said it is a
permit that is required of a point source discharge, which she
described as "things that come out the end of a pipe." The
permit covers discharge of any pollutant other than fill that
goes to a "surface water body." Section 402 permits are also
known as national pollutant discharge elimination system (NPDES)
permits, she noted. Federal framework requires a Section 402
NPDES permit for discharge of wastewater from the impoundment
into the receding waters. Whether or not a fill material can be
placed into a wetland or water body hinges on the results of a
series of tests that are established in federal regulation, and
those tests are referred to as the 404(b)(1) guidelines. These
guidelines require a comparison between the practicable
alternatives for tailings disposal and a finding by both USACE
and EPA that the permitted alternative is the least
environmentally damaging of the practicable alternatives. In
the case of the Kensington Mine, she noted, the 404(b)(1)
process concluded that the Slate Lake tailings impoundment would
be the least environmentally damaging practicable alternative.
Thus, USACE issued its Section 404 permit to place the fill, to
construct the dam, and to discharge the tailings behind the dam
into the impoundment that's resulted there in Lower Slate Lake.
She said the EPA then issued the Section 402 permit - the NPDES
permit - for the discharge from the dam into Slate Creek down
below the dam.
MS. TOMICH KENT stated that the role of DEC in the Clean Water
Act permitting of the mine falls under yet another section of
the Act, which is Section 401. That section says that the Corp
of Engineers cannot issue one of its permits under 404 or 402
unless the state has either waived its opportunity to review
those permits or has certified that those permits will comply
with state law. In Alaska, she related, DEC is the
certification authority for the Clean Water Act permit. The
operative state law is the state's water quality standards which
are established in state regulation under 18 AAC Chapter 70.
The water quality standards are limits on allowable changes in
water quality, and are designed to protect a variety of uses of
water. She stated that the federal Clean Water Act permits
issued under Sections 404 and 402 are reviewed by DEC to
determine if there is "reasonable assurance" that the federal
permits will result in compliance with Alaska's state water
quality standards. The state may, and often does, include
conditions in its certification of those federal permits to
provide additional assurance that the state water quality
standards are going to be met, she said. In response to a
question from Co-Chair Samuels, she confirmed that the state may
add additional provisions, but cannot detract from the base
minimum standards.
1:56:29 PM
REPRESENTATIVE GATTO asked if there is a federal standard that
requires that any water life killed off as a result of the
tailings be replaced by a biological equivalent, or if the
federal government will say, "Nope, you're going to kill off
this group, then you've essentially violated the rules."
1:56:59 PM
MS. TOMICH KENT responded that USACE maintains requirements for
mitigation related to wetlands fill projects. She said she does
not know the answer to the previously asked question as to
whether or not there are mitigation requirements for [the
Kensington Mine] project, but she suggested that the question be
asked of the representative from the Kensington Mine. She
continued with her presentation as follows:
In the case of these major mine developments or other
large, new projects, DEC conducts that certification
in concert with the overall project permitting team
that's managed or supervised by [the] Department of
Natural Resources, and it's that coordination that
helps ensure that DEC's permits or - in this
particular case - our certification of those federal
permits, is done on schedule in conjunction with the
other activities for the project development.
MS. TOMICH KENT, regarding DEC's role in the Kensington Mine
water and water quality permitting, said DEC analyzed both the
federal permits and found that with some additional
stipulations, those permits would provide Alaska with reasonable
assurance that the water quality standards would be met. She
reported that DEC certified the Section 404 permit in May 2005,
after adding 15 additional conditions to the permit.
Furthermore, DEC certified the Section 402 permit in June 2005,
after adding 8 conditions. She noted that the Department of Law
is prepared to provide an overview of the legal issues in the
court case.
1:58:42 PM
SENATOR DYSON requested information from a neutral and objective
source that would outline the attributes of select chemicals
used in flotation processes, including information regarding how
the chemicals degrade in fresh water at various temperatures and
what kind of delusion is necessary to ensure no significant
biological damage.
1:59:57 PM
MS. TOMICH KENT said she would be happy to provide that
information to the committee.
2:00:08 PM
SENATOR DYSON asked how often the capping process on tailings
happens.
2:00:25 PM
MS. TOMICH KENT answered that it is a one-time process done at
the end of the mine's life.
SENATOR DYSON asked why the capping wouldn't be done every six
months to a year if there is some environmental byproduct
present that is less than ideal.
MS. TOMICH KENT answered that because the operation will be
actively placing additional tailings into the pond during the
life of the mine, it doesn't make sense to put a cap down and
then put more tailings on top of it.
SENATOR DYSON responded that that seems like a strange answer.
He said, "If what's going into the water with the tailings has
some bad effect, why would we wait for 30 years to cap it?"
MS. TOMICH KENT explained that the discharge that comes from the
impounded area through the treatment system has to meet certain
water quality standards.
SENATOR DYSON asked if it would be logical to infer that there
are no concerns about an impact on biological life in the water,
upstream of the dam towards the pipe.
MS. TOMICH KENT answered, "During the life of the project, we're
not concerned about the water quality in the pond at the time
they're still operating the mine."
SENATOR DYSON concluded that "it will be probably somewhat
biologically inert," which is what he said he thought the answer
would be.
2:02:47 PM
CO-CHAIR SAMUELS asked Ms. Tomich Kent to confirm that the order
of the process is to test the tailings, then test the slurry
that goes into the water, and finally to test the water coming
out of the lake.
MS. TOMICH KENT answered that's correct.
2:02:58 PM
REPRESENTATIVE GATTO asked if the purpose of the cap is to
protect substances below it and keep them from escaping, or if
the cap actually modifies the substances below to "let time
enough pass so they become inert."
2:03:20 PM
MS. TOMICH KENT replied that the cap would confine the tailings
below, as well as create a substrate suitable for
recolonization.
CO-CHAIR SAMUELS pointed out, "The tailings are tested before
they're put into the water."
MS. TOMICH KENT said that's correct.
CO-CHAIR SAMUELS continued, "If there are toxins, then ... it
becomes a bit of a moot point, because you're going to stop
immediately. The cap isn't for toxins leaking up into the
water; the cap is ... so you can have more biological growth in
there."
MS. TOMICH KENT indicated that the cap is a "contingency" having
to do with the following circumstances occurring at the end of
the mine life: water quality not meeting the water quality
standards or substrate not being suitable for recolonization.
2:04:19 PM
REPRESENTATIVE LeDOUX asked for clarification regarding the
purpose of the cap.
2:04:30 PM
MS. TOMICH KENT said the cap serves two purposes: one, to cap
the tailings, so that the materials in those tailings do not get
back into the "water column"; and two, to create a substrate - a
suitable surface - for recolonization.
2:04:51 PM
REPRESENTATIVE LeDOUX asked if the department anticipates
earthquakes as a potential problem.
2:05:30 PM
COMMISSIONER FREDRIKSSON addressed Representative LeDoux's
concern. He said a cap is not a guarantee; there are other
events that can cause it to be breached. He noted that
throughout Alaska there are caps on landfills that, at times,
due to slope instability or earthquakes, can crack and have to
be restored, and he said he would assume the same would apply to
a tailings cap.
2:06:53 PM
CRAIG TILLERY, Deputy Attorney General (AG), Civil Division,
Department of Law (DOL), discussed issues surrounding the
litigation. He noted that in using the Section 404 permit,
USACE relied upon a revised definition of fill material that it
and the EPA had jointly promulgated in 2002. That revised
definition, he noted, had eliminated some prior contradictions
related to the definition of "spill," and specifically listed
mine tailings as spill materials to be regulated under Section
404. He continued as follows:
In September of 2005, the three plaintiffs, which
[are] SEACC, the Sierra Club, and the Lynn Canal
Conservation Group - which I would just refer to
generally as SEACC here - brought this law suit in
federal court. They sued the [U.S. Army] Corps of
Engineers and they sued the [U.S.] Forest Service;
they did not sue the State of Alaska. Coeurs Alaska,
[Inc.] - the company, Alaska, and Goldbelt, [Inc.] - a
local [Alaska Native Claims Settlement Act (ANCSA)]
corporation - moved to intervene in the suit as
defendant. Goldbelt was in there because they had a
proposed project to build the dock that would be part
of the ferry terminal for the mine.
SEACC's complaint, as it was originally done, had two
counts. The first one raised a purely legal issue of
whether the disposal of mine tailings should be
regulated by the [U.S. Army] Corps of Engineers, under
the Clean Water Act, Section 404, or whether it should
be regulated by the EPA, under Section 402. The
second count challenged the [U.S. Army] Corps of
Engineers' then underlying rationale in selecting this
disposal option. And among other arguments, SEACC
alleged that the [U.S. Army] Corps of Engineers should
have considered the impact of Goldbelt's proposed
marine terminal, as part of [the] Kensington Mine
project. They asked the court to declare that the
[U.S. Army] Corps of Engineers' 404 permit was
inconsistent with the Clean Water Act, and to reverse
the [U.S.] Forest Service's approval of Coeur's plan
of operation.
The court sort of took this one at a time, and said,
"let's start with count one, the purely legal issue."
Very shortly thereafter, the [U.S. Army] Corps of
Engineers asked for a voluntary remand of its permit
so that it can conduct a further review. The court
granted that motion, and essentially everything
stopped for several months while the court did this
review. Then, in March 29 or 2006, the court issued a
revised record of decision. They reaffirmed their
original conclusion that the selected tailings
disposal options complied with the regulatory
guidelines that governed the issue of the 404 permits,
and then they added some more matters to deal with
some of the other issues that had been raised.
The Corp of Engineers then reinstated the 404 permit,
allowing the tailings to be placed in Lower Slate
Lake. In response, SEACC then filed an amended
complaint, which was similar to the original, except
that it now was composed only of count one - just
strictly the legal challenge on whether you ... should
deal with these under Section 404. The court ordered
expedited briefing, and all of that was completed in
May of 2006.
A few months later, on August 3 of 2006, the court
ruled in the case, and it ruled in favor of the
defendant, and upheld the [U.S. Army] Corps of
Engineers' permit. The state, of course, along with
Coeur, had intervened as defendants at this time. In
so ruling, the court recognized that under supreme
court case law, it should use a deferential standard
of review - and I'm not going to go through and sort
of bore you with the standards of review - but it was
fairly key with the decision, and it said that
basically we should defer to an agency in interpreting
a law and interpreting its regulation.
In approaching the Kensington case, the court looked
at whether Congress had specified how the disposal of
tailings should be permitted, that is, should it be
permitted by the [U.S. Army] Corps [of Engineers] or
... by EPA? The court noted that Congress had not
defined fill material. Instead, Congress left it to
the [U.S. Army] Corps of Engineers and EPA to figure
it out, and that is what they had done in 2002 through
their joint rule-making.
The court then considered whether that revised
definition was correctly applied, and in that they
quoted from the preamble to the ... 2002 rule-making
where it was stated, and I'll quote here, that "the
placement of overburden, slurry, or tailings, or
similar mining-related materials have been added to
the definition of discharge or fill material." And
this provided further clarification, and that was very
much its intent.
Given these clear statements in the preamble to the
rule, the court rejected the argument by SEACC that
the agencies never intended for mine tailings ... -
like these generated at Kensington - to be included
and regulated as spill. In short, then, they found no
merit to the lawsuit and dismissed the complaint on
August 3. SEACC immediately appealed the District
Court's decision to the 9th Circuit Court of Appeals,
and then moved for an injunction in front of that
court on activities, pending a decision on the merits
of the appeal. All of the defendants, including the
interveners and including the state, opposed that,
arguing that first of all it lacked merit, that the
answer was clear, and that in any event there would be
no irreparable injuries for the types of activities
that would be occurring, pending a decision on the
appeal, which we fully expected to be expedited.
2:13:42 PM
MR. TILLERY continued:
Now, pursuant 9th Circuit [Court of Appeals]
procedures, that motion was considered by a two-judge
motion panel, which is not typically, but can be I
believe, the same panel that would actually consider
the case. ... The ... two-judge motion panel granted
the injunction and then also entered an order setting
an expedited briefing schedule to be completed by mid-
October. We anticipate that the case would then be
ready for decision by the 9th Circuit [Court of
Appeals] in November 2006, unless an oral argument
scheduled; and if that happens, then it stands upon
... the 9th Circuit [Court of Appeals'] and the
panel's availability.
We're at a position where, in looking at this
injunction, we went to the court rules to see what our
prospect would be for seeking reconsideration for
trying to get a larger panel - sort of an en banc
reconsideration of this - and we determined that that
really was not feasible. Under the court rules it
says in one place that such filings are discouraged,
it says in another place that they are rarely granted,
and our practice and experience tells us that that is
the case.
What we have concluded is that legally the best option
at this point is for us and for the defendants and the
plaintiffs to move forward with the expedited briefing
schedule and try to complete this and get a decision
as quickly as possible.
2:15:29 PM
MR. TILLERY summarized the view of the department in regard to
the state's perspective of legal issues going forward, as
follows:
The definition of fill, adopted by the federal
agencies charged with administering the Clean Water
Act, clearly includes mine tailings such as
Kensington. That is what we think is the most
important issue. Secondly, we believe that the Corp
of Engineers therefore acted properly in permitting
them under Section 404. SEACC will have a different
view of the result of those issues. But again, at
this point, one of our major concerns is to move
forward ... quickly.
2:16:23 PM
MR. TILLERY, in response to a question from Co-Chair Samuels,
stated that he sees no realistic chance that the state would "be
on the hook." First, he explained, the permit is a federal one.
Second, he said, even if it were a state action, the department
believes that it would be protected under discretionary
immunity. As to whether the federal government would have any
liability, he said, "they would have to speak for themselves."
However, he added, "But as a veteran of some amount of
litigation against the federal government, they have a raft of
reasons why they are never liable for anything."
CO-CHAIR SAMUELS asked, "If this permit is found to be illegal
or invalid, is there a possibility that you go back on them and
revoke theirs and have to have them go through a whole EIS all
over again?"
2:17:33 PM
MR. TILLERY responded that this would not be a retroactive kind
of decision. Furthermore, he said, this issue is being decided
under rules promulgated in 2002; the Red Dog [Mine] was "under a
prior set of rules." He stated, "It ... is highly unlikely that
there would be anything that would come back on Red Dog because
of this. As to future mines, it ... definitely would impact
mines ... upcoming the next few years."
2:18:05 PM
REPRESENTATIVE LeDOUX asked, "Does the decision of the 9th
Circuit [Court of Appeals] give enough leeway that certain
activities of the mine - of Kensington - could have continued
without shutting the whole thing down?"
2:18:32 PM
MR. TILLERY deferred to a representative of the Kensington mine
to answer that question.
2:19:06 PM
HOWARD GREY, Alaska Miner's Association, told the committee that
the association represents Alaska's mining industry statewide
and works to promote mining and advocate responsible development
to provide an economic base for Alaska. He reviewed that the
Kensington Mine project was the subject of a rigorous, 3-year
environmental review, at the conclusion of which the State of
Alaska, USACE, and the U.S. Forest Service selected an
alternative that included [Lower] Slate Lake as the location for
a tailings facility. He said this was an environmentally
preferred alternative. He related that recently the U.S. Bureau
of Land Management awarded Coeur Alaska, Inc. the prestigious
2006 Hardrock Mineral Commodity Outreach and Economic Security
Award, presented to those hardrock mining projects that have
shown both responsible mineral resources development and an
understanding of sustainable development.
MR. GREY said Kensington Mine is a small, underground mine in an
area with a long history of mining. Mining there would not
require a new area to be opened, and there is little land and no
wilderness affected by the operation. The project will not be
visible from the water surface of Berner's Bay, he said, with
the exception of a modest dock facility at Slate Cove. He
echoed previous testimony that Kensington Mine will not use
cyanide or other harsh chemicals on site; the concentrates will
be shipped offsite for final processing. The rock material left
after gold removal is relatively inert, he said. In fact, the
material could likely be used for recreational beaches. The
proposed use of Lower Slate Lake is temporary; the company will
rehabilitate the lake at the end of the project.
2:22:35 PM
MR. GREY said the agencies and the association believe that the
Kensington Mine is an environmentally responsible project. The
environmental impact statement clearly demonstrates that the
project will protect the public resources of Berner's Bay,
protect fish habitat in Slate Creek, and will ultimately enhance
the fish habitat in Slate Lake. Mr. Grey stated that the
lawsuit by the environmental plaintiffs threatens to eliminate
approximately 200 jobs for Alaskans and put in jeopardy millions
of dollars that could be spent in Southeast Alaska's economy.
He emphasized that both the legal briefs and the Clean Water Act
are equally applicable to all types of U.S. waters. If the
court were to adopt the environmental plaintiff's view of the
Clean Water Act, placement of tailings would not only be
forbidden in Lower Slate Lake, but also in many other waters of
the U.S. Tailing ponds, he relayed, are almost always
constructed in the point of a valley, and the dams in this
location, by definition, must cross a stream. In other words,
he explained, tailing ponds and facilities almost always affect
waters of the U.S. Because so much of Alaska is identified as
wetlands, he noted, that interpretation would eliminate the
ability to place tailing facilities in most location in Alaska.
If the plaintiff's view of the Clean Water Act had been adopted
years ago, he said, it would have probably been impossible for
federal agencies to have authorized Red Dog Mine, Greens Creek
Mine, and possibly Fort Knox and True North, among others.
Tailings placement for each of those mines, he related, received
a USACE Section 404 permit. He pointed out that arguments being
advanced against the Kensington Mine are similar to those
advanced against the Pogo Gold Mine "until community pressure
sort of saved the day."
MR. GREY stated that this lawsuit is a threat to mining
throughout Alaska and could affect communities and citizens
throughout the state, as well as [negatively] impact "other
types of operations outside of mining."
2:27:14 PM
RUSSELL HEATH, Executive Director, Southeast Alaska Conservation
Council (SEACC), told the committee that SEACC is a conservation
group that is a coalition of 17 citizen conservation groups
throughout Southeast Alaska. He stated that the mission of
SEACC is to protect the region's extraordinary resources and to
ensure a wise and sustainable use of those resources. He said
many important issues are at stake related to jobs, economic
development, the future of mining in Alaska, and the management
of natural resources. He stated, "The more broadly and the more
fully that ... these issues are understood, the better we
Alaskans can make the ... correct decisions regarding them."
MR. HEATH clarified that SEACC's legal challenge is against the
U.S. Army Corp of Engineer's permit authorizing Coeur Alaska,
Inc. to dump its chemically processed mine tailings into Lower
Slate Lake. He stated that it's not a challenge against the
Kensington Mine itself, and he relayed that the injunction that
was issued by the 9th Circuit Court of Appeals does not require
the construction of the mine to shut down, but rather to
maintain a status quo around the tailings facility.
MR. HEATH, in response to a previous statement that all federal
and state agencies consider the Kensington Mine's tailings
facility alternative as the preferable one, stated that the EPA
does not. He read a statement by the EPA as follows:
Alternative A is the only alternative that will avoid
the habitat loss in Lower Slate Lake during mine
operations and the uncertainty in terms of Slate
Lake's long-term recovery. It is also the only
alternative that avoids significant impact to
sensitive habitat and resources in Berner's Bay.
Alternative A is EPA's preferred alternative, because
in addition to being environmentally preferable, it
appears to be a practical and feasible alternative.
The dry tailings facility proposed under Alternative A
is a standard industry technology in use at other
mines in Alaska.
MR. HEATH, in response to the comment that the lawsuit will shut
down mining in Alaska, said that is not SEACC's intent, nor is
it the understanding of SEACC or its lawyer that that would be
the outcome. He said the practice of the Pogo and Greens Creek
mines is to take out the wetlands, put fill on top of the
bedrock, and then place the tailings on top of that layer. He
indicated that that is Alternative A, and although it may be a
"bureaucratic kind of way around how you put tailings [in]
wetlands," that is a practice that would not be in any way
limited by the lawsuit.
2:31:03 PM
MR. HEATH offered SEACC's history of involvement with this
issue. He stated that in 1998, Coeur Alaska, Inc. received all
necessary permits for "the project that ultimately the
corporation chose on its own not to pursue." Instead, it
redesigned the mine and reinitiated the review and permitting
processes to arrive at the current mine proposal. He noted that
SEACC has participated in every step "of these processes." He
named SEACC's two chief concerns about the new design: the
impact on Berner's Bay and the implication the tailings design
has in regard to water quality both in Alaska and in the rest of
country. In an attempt to address and resolve the concerns and
avoid litigation, SEACC negotiated with Coeur Alaska, Inc. for a
number of months [in 2005]. In terms of the impacts on Berner's
Bay, he stated his belief that SEACC found ways to adjust the
design of the mine or its plan of operations that would protect
the bay. However, he noted, SEACC was unable to find common
ground with Coeur Alaska, Inc. related to the tailings disposal.
An attempted mediation sponsored by the City and Borough of
Juneau also failed to resolve the issue, he said.
MR. HEATH stated that in 1972, when President Nixon signed the
Clean Water Act into law, the American people committed to
stopping the disposal of industrial waste into America's waters
and to clean up those waters that had been damaged by past
practices. He said that as a result of that massive task, fish
have returned and children are swimming in many lakes and rivers
that were once dead and poisonous.
MR. HEATH related that one of the problems SEACC sees related to
the management of natural resources is that their economic value
is often overlooked. Clean water, for example, supports the
commercial and sport fishing industries, tourism, and the
recreation system. He offered an example of gillnetters
marketing their fish as "rain forest wild."
MR. HEATH stated that the Kensington Mine will be the first mine
since the Clean Water Act was signed in 1972 to dump its
chemically treated mine tailings into a natural water body,
which is a big step backward, undercutting the hard work that
U.S. citizens have done in the past 30 years and setting a bad
precedent for other mines in the future.
2:36:07 PM
MR. HEATH said Mr. Tillery gave a good overview of the legal
issues; however, he said SEACC's opinion differs from that of
the Department of law, in that it thinks it has a legitimate
challenge to the permit. He said he thinks the 9th Circuit
Court of Appeals, in issuing the injunction, sees the merits in
SEACC's case. He mentioned a regulatory change that occurred in
2002, having to do with the definition of "fill," and he said
clearly there were mines prior to 2002 that were adequately
permitted and went forward without this regulatory change, and
SEACC believes that mining can continue in Alaska using a
realistic definition of fill. Tailings, he remarked, are not
fill; they are chemically processed waste from the mines.
MR. HEATH said it is SEACC that has requested an expedited
hearing, because the issue is so important to Juneau and mine
workers. He offered his understanding that oral arguments are
scheduled for the first week of November. He reiterated his
point about the efforts that had been made to settle the issue
out of court. He said the corporation claims that any other
option is too expensive, and SEACC thinks that the dangers of
the current approach are too great. He stated that safeguarding
Alaska's water is worth the investment, and he expressed the
organization's willingness to work with the agencies involved
and with Coeur Alaska, Inc. to expedite the implementation of
alternatives.
2:39:10 PM
CO-CHAIR SAMUELS asked, "If the testing is all done and the
water's coming out fine, then what's the problem?" Furthermore,
he asked if SEACC supported Alternative A, using the dry
stacking method, and if there would be the possibility of yet
another group filing suit over that option.
2:40:13 PM
MR. HEATH, to the first question, stated that he has been
impressed with the state's regulatory procedure and has no doubt
it will conduct adequate testing. However, he said that to this
day, the testing of the toxicity of the tailings is
inconclusive. He noted that the effluent that comes out of the
pipe is toxic; there's no dispute about that. He stated that
all aquatic life in the lake will be killed under the proposed
procedure during the time that the mine is in operation. Mr.
Heath indicated that regarding a 1998 plan, the mining company
withdrew its proposal; the permits were on the table, but the
company decided not to pursue the project. In response to Co-
Chair Samuel's question related to the possibility of another
group filing suit in the event that Alternative A is used, he
mentioned a possibility of putting a dry stack tailing facility
on the other side of a ridge in the Berner's Bay site. He
continued:
We would be willing to work with the company to site
this in such a way that SEACC would not file a law
suit. ... It is not that any environmental group can
come in and file a lawsuit. ... To have standing in a
court, you must have demonstrated that you've actively
participated in the planning and the permitting
process in the beginning. It's not a random thing
here. SEACC has put hundreds and hundreds of staff
hours into examining this process to be sure that it's
being done in the best possible way. So, no one can
come in without having participated in the process.
CO-CHAIR SAMUELS suggested that if the SEACC board chose not to
take action, one of SEACC's 17 members could come forward on its
own and, having been part of SEACC, announce that it will now
individually file suit.
2:43:14 PM
MR. HEATH deferred to the lawyers for a definitive answer.
Notwithstanding that, he offered his understanding that an
individual group that is a coalition member of SEACC can't "jump
on" SEACC's work to achieve standing.
2:43:40 PM
SENATOR DYSON, regarding Mr. Heath's comment that the effluent
would kill the aquatic life, asked him if he meant the whole
lake or "just upstream of the new dam."
MR. HEATH responded that the entire lake is upstream of the dam,
and he stated his belief that all aquatic life will be killed
during the operation of the mine. He suggested confirming that
belief with Mr. Fogels. He noted that there is a stream that
comes from Upper Slate Lake to Lower Slate Lake, and he said he
doesn't believe the effluent will make any difference in Upper
Slate Lake.
2:44:10 PM
MR. HEATH, in response to a question from Chair Wagoner,
estimated that there are probably few if any fish in Lower Slate
Lake currently. He said the lake has been partially
"dewatered." He explained that the photograph of Lower Slate
Lake that the committee was shown previously was taken before
any mine activity began. He said the trees around the lake have
been cleared; there is a road there, and there is a partial dam.
CHAIR WAGONER shared how he became aware of the issue at hand
when he first was elected. He said he is a commercial fisherman
who has been involved with a group that brands his fish and
sells them, and he considers himself an environmentalist. That
said, he questioned SEACC's motive in waiting until the mine
company had done all its preparation work and invested millions
of dollars - probably close to $100 million in the permitting
process - before filing the lawsuit, rather than addressing the
issue four years ago before the project got so far advanced. He
asked, "Are you really trying to make sure the project goes
according to the way you want it to go, or are you trying to
kill the project?"
MR. HEATH reiterated that SEACC has been part of the process and
has stated its concern from the beginning. He said SEACC could
not and would not file a law suit until it saw the actual
permit. He offered his understanding that the permit was issued
in June 2005, at which time SEACC was still in negotiations with
the company. He explained that SEACC withheld the lawsuit at
that point until it realized that the negotiations with the
company were not going to resolve the problem. He said he
believes it was in late July that SEACC filed the lawsuit,
asking at that point for an expedited briefing; however, the
lawsuit was put on hold because USACE voluntarily remanded the
permit. He offered his understanding that the day before the
briefs were to be issued, USACE withdrew the permit, at which
point the lawsuit "was essentially on ice" for almost five
months. He echoed Mr. Tillery's summary, stating that when the
permit came back, SEACC reevaluated it and withdrew one count,
but pursued the most important point regarding the precedent
that this kind of tailings disposal would be setting.
2:48:29 PM
CHAIR WAGONER asked Mr. Heath if, in his mind, he considers the
lawsuit to be primarily about precedent than about pollution.
MR. HEATH answered, "It's about both."
CHAIR WAGONER said when he toured the Kensington Mine area, he
saw the glacial streams, the condition of the lakes, and the
manner in which the mine is looking after the water quality, and
he opined that SEACC's fears are unfounded. He said he thinks
the corporation is doing a fine job in complying with the
permitting process and working the mine, and he thinks a
terrible message is being sent out nationwide to mining
companies being asked to come to Alaska, because of the SEACC
organization's actions.
MR. HEATH expressed appreciation for Chair Wagoner's concern.
He clarified that this is the first time in a generation that a
mining company is planning to put its effluent in a lake.
Notwithstanding the high quality of the agencies involved and
the review they have exercised over the project, he said, this
precedent will be nationwide. He stated his concern that other
mines across the country will be putting their tailings in
water. He reiterated that there are other alternatives to use.
2:50:26 PM
REPRESENTATIVE LEDOUX, regarding Mr. Heath's previous remark
that in order to have standing, it is necessary to be part of
the permitting process, asked if that means that a member of the
public could not bring a law suit under the Clean Water Act.
MR. HEATH deferred to the Department of Law, but offered his
understanding that the Clean Water Act does have a citizen suit
provision. He said he does not know what kind of standing a
person must have in order to exercise that provision. For
example, an individual may have to demonstrate harm. He said in
order for SEACC to have had standing, it had to have
participated throughout the process.
REPRESENTATIVE LEDOUX asked, "As an organization?"
MR. HEATH replied that an individual could have done it, as
well, but SEACC is bringing the law suit as an organization.
2:51:27 PM
REPRESENTATIVE GATTO noted that after Hurricane Katrina, water
was pumped into Lake Ponchartrain in huge amounts. He asked if
there have been any studies showing that that lake has suffered.
MR. HEATH said that is an excellent question for which he has no
answer. He said he thinks sometimes national emergencies trump
other laws. He recalled when that incident occurred, the water
that was sitting in New Orleans was horribly polluted from human
waste and toxic chemicals. He pointed out that one of the
reasons that Hurricane Katrina was so devastating was because of
how the wetlands were being managed in Louisiana. He said if
the wetlands had been better protected, New Orleans probably
wouldn't have sunk as far below sea level as it did. He
concluded, "So, that's part of the reason why ... we're here ...
defending Alaska's waters."
2:52:39 PM
CO-CHAIR SAMUELS remarked that some of the comments made
previously by Mr. Fogels and Mr. Grey were onerous. He said if
SEACC had filed and won a lawsuit related to the Red Dog Mine,
that mine would not exist. He said, "And so, from here on out,
if you can't get a permit to get tailings in wetlands - if
that's what the 9th Circuit Court [of Appeals] comes out and
says ... - we're done. And that is a huge concern to me." He
stated that he would rather look at every case individually
rather than making a blanket regulation or ending up with a
blanket court ruling.
2:54:06 PM
MR. HEATH respectfully disagreed that the lawsuit will result in
mining being shut down in Alaska. He said the Red Dog Mine was
permitted under other circumstances. He said he is not a
lawyer, but he reiterated that the Kensington tailings facility
was permitted under regulatory change that was made in 2002, and
mines were adequately and fully permitted under an earlier
regime and are working currently in the state.
2:54:45 PM
CHAIR WAGONER qualified revealed that twelve of his constituents
are working on the Kensington mine project, and he emphasized
that the mine is a statewide issue, more than just a local one.
MR. HEATH concurred.
CO-CHAIR SAMUELS asked Mr. Tillery to address the previous
question regarding who might have standing.
2:55:32 PM
MR. TILLERY said Mr. Heath is correct that earning standing is a
result of having participated in the process. It could have
been individuals who had participated and can demonstrate some
important standing. Not just anybody can jump into the process
at this point, he indicated, but he reminded the committee that
already involved are three plaintiffs, as previously noted. He
said he does not know the makeup of SEACC, and he said the
department would probably argue that "someone else could not
come in now and challenge this if a resolution was to be
reached." However, he said, "I cannot guarantee you that if it
was one of their constituent organizations that we would keep
them out."
2:56:52 PM
TIM ARNOLD, Vice President/General Manager, Coeur Alaska, Inc.,
said the company is currently constructing the Kensington Gold
Mine in Southeast Alaska. He stated that he would be limited in
his testimony to his prepared remarks and would not be
entertaining question, due to the pending litigation in the 9th
Circuit Court of Appeals. He expressed appreciation to those in
the community and political positions who have stated their
support of the mine. He said the Kensington Mine is critically
important to the economy of Southeast Alaska and is rightly the
subject of ongoing legislative interest.
MR. ARNOLD offered his background working in and around mines of
all types and living in many different places. He stated:
From stem to stern, the permitted Kensington Gold Mine
has the best environmental design of any project that
I've ever been associated with. It's blessed with
natural attributes that make it unique in mining and
[is] designed utilizing attributes especially
appropriate for Southeast Alaska.
MR. ARNOLD said the Kensington Mine has been the subject of
intense study, collaboration, and design for more than 17 years,
during which time the objective was always to ensure that the
plan would embody the highest principles of environmental
stewardship, which Mr. Arnold said the company calls, "producing
and protecting." He expressed pride in the mine, characterizing
it as a unique project that protects Alaska's clean water while
providing significant, long-term economic benefit for the region
and the state. He spoke of the previously mentioned 2006
Hardrock Mineral Community Outreach and Economic Security Award
from the U.S. Bureau of Land Management and said the award is
meaningful in that it recognizes responsible and sustainable
resource development - the cornerstone of the Kensington Mine
plan.
MR. ARNOLD relayed that Coeur Alaska, Inc. is spending
approximately $190 million of capital to build the Kensington
Mine in an area that has been home to gold mining for over 100
years. He noted that in fact, the Kensington Mine is in the
same "geologic gold belt" that Bart Thane mined and Juneau was
built upon. When completed, he stated, the Kensington Mine will
be among the newest and most environmentally responsible gold
mines in all of North America. The company currently holds
about 60 environmental and regulatory permits and has 300
workers working at the mine. More than $25 million has been
spent on nearly 900 environmental studies. He related that the
mine has already proven to be a huge boost for the region's
economy, and enjoys widespread support among business, community
leaders, Native corporations, and area residents.
MR. ARNOLD said the Kensington Mine is designed to produce
approximately 100,000 ounces of gold annually. Once it begins
operations, the mine will have about 200 permanent workers, with
a $16 million annual payroll and benefit. The mine is expected
to generate millions more in annual state and local tax
revenues, and additionally has already established itself as a
pillar of charitable contribution in the region, and a staunch
supporter of the Native community and local businesses, he said.
MR. ARNOLD said project opponents want people to believe that
Kensington Mine's environmental permits pose a threat to clean
water and set "some sort of precedent for other mines in
Alaska." He stated that Coeur Alaska, Inc. contends that both
those assertions are false. He explained that because no two
mines are alike, permits for any given mine are always evaluated
and issued based on an exacting set of specifications unique to
each mine. He offered three characteristics of the Kensington
Mine, as contrasted with other mines: it is an underground mine
with very little to mark the landscape, other than various
tunnel entrances and some relatively compact processing
facilities; it uses fairly simple milling, followed by a
relatively benign flotation process to separate the metal from
the crushed rock, without the use of chemicals such as cyanide
to leach metal from the ore; and its crushed waste rock or
tailings will be inert and will look much like the sand at Sandy
Beach in Juneau. Mr. Arnold said about 40 percent of the
tailings will be recycled back into the mine and be used for
fill material; USACE has twice validated a disposal plan for the
remainder of the tailings that will have the least possible
impact on the environment. He reviewed that the plan also
includes a complete reclamation of the disposal area once mining
at Kensington is complete. The mining operation, he summarized
is recognized as the best environmental option by state and
federal agencies.
MR. ARNOLD said the temporary injunction granted to SEACC from
the 9th Circuit Court of Appeals affects "some of our
construction activities in the area of the tailings facility."
The injunction was granted, he said, even after the Alaska
District Court validated the permit by dismissing SEACC's
lawsuit earlier this month. Work continues elsewhere on the
project site, he said, because Coeur Alaska, Inc. remains
convinced that the project is sound and the company will
"prevail on the merits upon appeal."
3:05:55 PM
MR. ARNOLD said that despite its many differences with SEACC, it
is in full agreement with SEACC on one key point: Alaskans do
indeed deserve clean water. He said Alaska must demand
responsible mineral development. He expressed pride in being
involved in the Kensington Mine. He stated, "It's a project
that will operate in compliance with the highest standards of
environmental protection, while providing much needed long-term
economic benefits to the community."
3:06:45 PM
REPRESENTATIVE GATTO noted that the workers at the Kensington
Mine are commuters, and he asked what percentage of the workers
is Alaskan, versus from out of state.
3:07:28 PM
MR. ARNOLD replied that last time the statistic was checked, 76
percent of the workers were Alaskan.
REPRESENTATIVE GATTO asked if that is considered a good
percentage compared to other mines. He stated that he is
hopeful that mines will employ people from the area.
MR. ARNOLD said he does not know, because he is only focusing on
one mine.
3:08:07 PM
MR. ARNOLD, in response to questions from Senator Dyson, said
the dam effects "the entire current lake."
SENATOR DYSON asked, "Are there several or many tailing handling
... schemes like this around North America that have operated
arguably successfully, without doing any detrimental damage to
the water quality?"
MR. ARNOLD indicated that he would like to get an answer from
another source because he cannot answer that question properly
[because of ongoing litigation].
SENATOR DYSON asked, "May I imply from your answer, then, that
you haven't worked on other similar tailing handling schemes in
wetlands?"
MR. ARNOLD responded, "What you can imply is that I'm unable to
take questions about the tailings facilities because we're in
litigation."
3:10:36 PM
REPRESENTATIVE LeDOUX asked if Coeur Alaska, Inc. has had to
fire or lay off any of its workers and, if so, how many.
MR. ARNOLD responded that he cannot answer that question right
now.
3:11:02 PM
SENATOR ELTON said Representative Gatto's point about hiring
locally may be an issue that the next legislature wants to
address. He expressed that one of his fears after speaking with
some mining people around the state is that mines are "starting
to cannibalize each others' work force." He opined that a role
for the state would be to attempt to get more Alaskans trained
for the good jobs that are out there in the mines. He said he
thinks 76 percent is a good number, but he is concerned that the
number will not improved unless more Alaskans are trained for
those jobs.
3:13:00 PM
MR. FOGELS, in response to a request from the chair to speak to
Senator Dyson's previous question to Mr. Arnold, said the
permitted mine calls for a dam that is at the outlet of the
lake, thus the entire lake would be behind the dam. He
reiterated that it is the working assumption that once the 4.5
million tons of tailings go into the lake, all the fish in the
lake will die.
SENATOR DYSON indicated that he may have been confused by the
photo.
MR. FOGELS noted that the lake itself has a very narrow gorge,
across which the dam will be built. The dam will be
approximately 300 feet long and 90 feet tall.
SENATOR DYSON asked if there are other schemes in which, after
some period of time, the turbidity will settle out and the body
of water will once again be a suitable fish habitat.
MR. FOGELS offered his understanding that this is the first time
in modern permitting history that a lake has been proposed for a
tailings disposal facility. He pointed out that there are other
lakes currently in Alaska "behind tailings dams," and the
tailings do settle out. He said a lot of work was done to find
out whether tailings would settle out or stay suspended, and the
modeling done shows that the tailings will settle. Sometime
after closure, he said, there will be clean water on top of
those tailings. He added, "They have to meet clean water
standards at some point."
SENATOR DYSON asked if [Lower Slate Lake] is currently
bioactive.
MR. FOGELS responded that he has not recently seen the lake, but
he knows that the water level has been "drawn down." He added,
"But I can't tell you whether any of those fish are still happy
fish there or not."
CO-CHAIR SAMUELS noted that it would not necessarily be the
toxins from tailings that would kill fish, but rather the sheer
amount of silt or dirt going into the water.
MR. FOGELS answered that's correct. He added, "Actually, right
where the pipe would enter the lake water itself, ... there are
floatation regions that come out with that, and there will
probably be ... low PH levels and some additional toxicity from
those regions around where the pipe is discharging. That was
anticipated to dissipate pretty quickly or get entrained with
the tailings."
3:16:51 PM
REPRESENTATIVE GATTO recalled that taconite tailings were dumped
into Lake Michigan back in the 1950s, or earlier. He asked if
Mr. Fogels has any information regarding Lake Michigan and
whether it recovered on its own.
MR. FOGELS said he doesn't have that information but could look
into the matter.
3:18:38 PM
MR. FOGELS, in response to a question from Senator Dyson,
explained that the dam will be a permanent fixture, with a
spillway cut around the dam in solid bedrock in order that the
water can discharge naturally from the lake to Lower Slate
Creek. He reminded the committee that that would only occur
once the water in the lake met clean water standards.
3:19:12 PM
CO-CHAIR SAMUELS asked participants to act as contacts and to
get information to his office as it becomes available.
ADJOURNMENT
There being no further business before the committee, the Joint
House and Senate Resources Standing Committee meeting was
adjourned at 3:19:43 PM.
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