Permits approved for new Usibelli Alaska coal mine

FAIRBANKS, Alaska (AP) — Usibelli Coal has received permitting from the Department of Natural Resources to open a new pit mine northeast of Healy.

Jumbo Dome Mine will be about six miles from Two Bulls Mine, which Usibelli has operated for about 10 years. Both mines will extract from the same coal seam, a strategy that helps keep production costs down, according to mine officials.

"We've identified a bunch of different areas that have coal in them, but the big thing is access into these areas, close to the infrastructure that we have in place. You have to find the correct one so you don't have to build a huge long road to get to it, and power lines and all of that. Everything has to go onto the rail system here, so the closer the better," Usibelli vice president of engineering Fred Wallis said.

The new mine — which is named for nearby Jumbo Dome but is not on the mountain — is expected to produce 80 million to 90 million tons of coal in the next 30 years, Wallis said. This averages to roughly 3 million tons per year, which is a 50 percent increase from the current production of 2 million tons annually.

Coal extraction still is more than a year away, but preliminary work, such as the building of roads and water containment systems, will start soon. The company has hopes that the quality of Jumbo Mine coal will be higher than coal already being mined in the area.

"It's the same seam, but as you travel around the seam in the different areas, the btu per pound are different. Also, for our customers, this happens to be an area where the sulfur content is lower. It has less emissions with less sulfur dioxide. We're extremely low sulfur here, which is a very positive thing for Alaska coal," Wallis said.

According to Wallis, Usibelli is developing Jumbo Mine for several reasons. The company — which exports approximately 1 million tons of coal to Japan, Chile and Korea every year and sells another million tons annually to Interior power plants — hopes to possibly expand sales in both markets.

"Hopefully, there will some more interest in building a different power plant or getting the Clean Coal Project going down here, and that's what I think the new leader of Golden Valley would tell you. Healy is their cheapest power they put out, but they only have the 25 watt plant down here that burns (coal)," Wallis said.

The power from that plant is sent to the Fairbanks area via Golden Valley Electric Association's Northern Intertie, a 97-mile, 230-kilovolt power line that stretches across the Tanana Flats from Healy to Fairbanks.

Another reason for the new mine is to ensure Usibelli has enough coal reserves to carry them through the lengthy permitting process for future mines.

"You have to permit way out ahead of time, because there is so much money and time and effort that goes into getting the permit. You have to drill, and there are numerous, numerous studies that you have to do. It's not like going in and buying a hunting license," Wallis said.

Usibelli has been working on the Jumbo Mine permit for 10 years and has put several million dollars into it so far, according to Wallis. The state, which received the application in January 2010, granted the permit last week.

"Generally, we tell people that a new permit that comes in takes 18 months minimum, and depending on changes and if there are other permits involved, it can extend out two to three years. It seems like forever," Alaska Department of Natural Resources Coal program manager Russell Kirkham said.

The DNR permitting process has many layers, Kirkham said. The first step is to look at the mining and operation plan to get an idea of how the proposed mine will affect the environment. Baseline studies are done on everything from hydrology issues to air data, and surface water and stream measurements are taken. Data is gathered for rainfall at the mine site and vegetation, fish and wildlife studies are performed.

DNR then looks at the mining reclamation plan to start making an informed decision about the impacts, according to Kirkham.

"Some of the impacts from an open pit mine are changes in groundwater and surface water quality — that's a big issue," Kirkham said. "We look at destruction of wildlife. You've changed the environment locally and the fish and wildlife are going to try to move away, so what you do in the mine plan is you say, 'These are the impacts, how do we mitigate this to minimize them?'"

Coal mining differs from hard rock mining because it generally does not involve digging in areas that have a lot of metals, which can elevate the level of toxins in the water, according to Kirkham.

"For coal mines in Alaska, the biggest issue is mostly suspended sediments; pretty much, it's fine-grain dirts and muds. And that has a big impact on fish. If it gets to the stream, it changes it because it can change the water chemistry. And it changes not just the makeup, it changes where the water re-enters the environment," Kirkham said.

The primary means of impact minimization are control and treatment of ground and surface water, as well as timely reclamation of the site after the mining is done, Kirkham said.

Sediment ponds are used to keep any water that has come into contact with the mining operation contained. Vegetation growth on reclaimed areas improves the water quality, which is why reclamation is such a high priority. Kirkham explained the process.

"As you progress forward, you take the dirt that you're mining in front of you and you put it behind you. You keep moving forward, and you take the topsoil that's been salvaged from in front of you and put it on top, and get vegetation on it, so as that pit moves forward the area right behind the pit gets reclaimed," Kirkham said.

Getting the vegetation to grow on the reclaimed topsoil can take up to 10 years, Kirkham said.

"Natural vegetation in most parts of Alaska is extremely slow growing, so once it's re-established on site it's going to be a slow process until that comes up to anything that's of any size. But it does come back, and Usibelli maintains that area under bond until that area is back," Kirkham said.

Mining companies are required to post bonds before they can begin working on a new mine. Usibelli posted an initial bond amount of $1.6 million before it could begin sediment pond construction, and will have to post an additional reclamation bond of $4.6 million for the first five year permit term before it can start to strip topsoil and vegetation from the site, according to Kirkham.

The reclamation process is closely monitored.

"There are standards within the permit and within the regulations that says, 'When does this area look like it's going to be successful?' If we come back and an area is at year nine and the vegetation fails, they have to figure out why it failed and start over again," Kirkham said.

The permit area is approximately 3,237 acres, 1,098 of which will be disturbed during the nearly 30-year life of the mine. Environmental groups are concerned about the possible disturbance of streams and wetlands, and think extra care should be taken in the permitting process. Northern Alaska Environmental Center Clean Water and Mining Program Director Pete Dronkers cited a new initiative by Gov. Sean Parnell that aims to speed up the DNR permitting process as being particularly troubling.

"It will be much, much faster and streamlined, and I think it has a direct correlation on environmental safeguards. In this case there is something like 30 acres of wetlands that would be consumed under this mine, and I think it's 16,000 feet of streambed that would basically be taken out. So when we look at those impacts, we don't feel it's worthy of a blanketed permitting approach when wetlands are being essentially demolished for this mine," Dronkers said.

02/20/2012 - 5:58am