Mining

Resource heavyweights gather at momentous time for Alaska

It’s November, and time for the big Resource Development Council annual conference. This year, more than any other, huge issues loom for Alaskans including the proposed $50-billion plus North Slope gas pipeline and liquefied gas project and the state’s fiscal troubles, with $3 billion-plus annual deficits. All will be discussed at the conference. RDC is a pro-development advocacy group representing all of Alaska’s industries that touch on use of the state’s rich natural resources. That includes tourism, which relies on an unspoiled wilderness landscape as its prime attraction. Tourism companies work side-by-side with oil and gas, minerals, fisheries and forest products companies in RDC, which demonstrates how these industries are not only compatible but reinforce each other. Organized labor is active in RDC too, because the state’s human resources, its labor force, are critically important. Municipalities are members and participants, too, because what happens in the state’s basic industries, which are mainly resource-driven, affects them. The annual meeting held in November is where all of this comes together, where all the state’s business and political movers and shakers rub shoulders, trade information and frequently move off into side-meetings. If there’s any one place where one can see who drives the state’s economy, this is it. This year’s conference, scheduled for Nov. 18-19 at the Dena’ina Civic and Convention Center in Anchorage, is expected to attract about 1,200, as it has in recent years. Briefings on all the state’s major industries are on the agenda as well as economic trends and updates on key federal and state regulatory issues. Joe Marushack, president of ConocoPhillips Alaska, will discuss his company’s positioning for the future in Alaska; Steve Butt of ExxonMobil, senior project manager of the Alaska LNG Project, will update the conference on the proposed North Slope gas pipeline and LNG export project; Dan Fauske, president of the Alaska Gasline Development Corp., will discuss the state’s role in Alaska LNG, and Kenai Peninsula Borough Mayor Mike Navarre will discuss how his municipality is preparing to deal with a huge construction project, although it is still some years off. There will also be briefings on activities of smaller oil and gas companies, such as BlueCrest Energy with its Cosmopolitan oil project in Cook Inlet; Caelus Energy with a new North Slope oil project, and Hilcorp Energy on that company’s work in redeveloping Cook Inlet oil fields and several mature North Slope fields acquired from BP. Mining companies will also talk about their operations and plans, including Eric Hill, general manager at the Fort Knox gold mine near Fairbanks, and Jan Trigg, community relations manager at the Kensington gold mine near Juneau. RDC’s members include several hundred businesses and groups and a large number of individual members, according to Marleanna Hall, the newly-appointed executive director. As an organization, RDC is unique in a number of ways. There are few, if any, similar organizations in other states that represent diverse interests and with a focus on responsible development of natural resources. Beyond its big annual conference, RDC is known, at least in Anchorage, for its biweekly breakfast meetings that typically feature presentations by business and agency leaders. All of these are posted on RDC’s website, Hall said. The group also offers a unique service to its members by representing them before federal and state agencies on often-complex regulatory and environmental issues. Many of these — endangered species is one example — may or may not have immediate effects on company operations but the potential of disruption is there. Through its engagement with the regulatory agencies RDC makes its members’ views known and also keeps its members informed on regulatory actions. The organization has also takes a leadership role at times in advocating legislative solutions to problems, one example being how state agencies allocated costs to private firms when development permits were applied for. In this case the solution worked out by RDC and its members, a framework on how agency staff costs are allocated, was enacted into law. A recent RDC initiative is with the state Department of Natural Resources’ decision on granting in-stream flow reservations to non-governmental groups. Hall testified in hearings on the issue, which has raised many concerns, and RDC has also submitted detailed comments to the state DNR. In another effort, RDC helped get its members out to support Hilcorp Energy’s planned Liberty offshore project in the Beaufort Sea. The U.S. Bureau of Offshore Energy Management is taking public comments on the application by Hilcorp to do the project. “This is very important because now that Shell has left the Arctic, at least for now, there are opposition groups that are shifting away from Shell to target this proposal,” Hall said. Another past effort was in combating the U.S. Environmental Protection Agency’s new “Waters of the United States” rule, which threatens to sharply expand that federal agency’s role in regulating Alaska development projects. In response to a lawsuit from 13 states including Alaska, a federal judge recently issued an injunction prohibiting the EPA from administering the rule.   The 36th Annual Alaska Resources Conference  November 18-19, 2015 • Dena’ina Civic & Convention Center, Anchorage, Alaska Resource Development Council - Growing Alaska Through Responsible Resource Development. For more information, visit akrdc.org. Wednesday, Nov. 18 7 a.m. Registration/Check-in/ Exhibits Open Eye-Opener Breakfast in Exhibit Area – Sponsored by Wells Fargo 8 a.m. Opening Remarks Ralph Samuels, RDC President, Vice President, Government and Community Relations, Holland America Line Governor Bill Walker (invited) Alaska Economic Trends: 2016 Outlook Neal Fried, Economist, Alaska Department of Labor Alaska Industry 2015 Year in Review and 2016 Outlook Oil & Gas: Kara Moriarty, President and CEO, Alaska Oil and Gas Association Fisheries: Glenn Reed, President, Pacific Seafood Processors Association Forestry: John Sturgeon, President, Koncor Forest Products Mining: Karen Matthias, Managing Consultant, Council of Alaska Producers Tourism: Scott Habberstad, Director of Sales and Community Marketing, Alaska Airlines 10 a.m. Gourmet Break – Sponsored by ConocoPhillips Alaska, Inc. 10:30 a.m. ConocoPhillips Alaska: Positioning for the Future Joe Marushack, President, ConocoPhillips Alaska, Inc. Global LNG Market Update and Framing the Opportunity for Alaska Felipe Arbelaez, Chief Commercial Office, BP Supply & Trading 11:30 a.m. Networking Break Noon Keynote Luncheon: Sponsored by Northrim Bank It’s Still North to the Future: Moving Ahead in the Arctic Wayne Westlake, President and CEO, NANA Regional Corporation Rex Rock Sr., Chairman and President, Arctic Slope Regional Corporation 1:30 p.m. Alaska Can’t Quit Now: Why the Arctic Still Matters Randall Luthi, President, National Ocean Industries Association Marine Freight Transportation: Safety and Environmental Stewardship Charlie Costanzo, Vice President, Pacific Region, American Waterways Operators What Alaskans Need to Know About Federal Overreach Bill Kovacs, Senior Policy Advisor, U.S. Chamber of Commerce 3 p.m. Gourmet Break – Sponsored by Colville, Inc. 3:30 p.m. Pebble vs. EPA: Finally Some Real Progress Tom Collier, CEO, Pebble Partnership Point Thomson: Dawn of a New Era Gina Dickerson, Point Thomson Project Manager, ExxonMobil 4:30 p.m. VIP Networking Reception – Hosted by ExxonMobil open to conference registrants and speakers Thursday, Nov. 19 7 a.m. Exhibits Open Eye-Opener Breakfast in Exhibit Area – Sponsorship Available 8 a.m. Real Solutions to Alaska’s Budget Crunch Cheryl Frasca, Former Director State of Alaska Office of Management and Budget, 2002-2006 Mike Navarre, Mayor, Kenai Peninsula Borough Give the State Some Credit: How Oil Tax Credits Are Changing Alaska’s Investment Game Benjamin Johnson, President, BlueCrest Energy, Inc. Casey Sullivan, Director, State Public Affairs, Caelus Energy Alaska, LLC Hilcorp: Boosting Efficiency and Production in Alaska Greg Lalicker, President, Hilcorp 10 a.m. Gourmet Break – Sponsored by Stoel Rives LLP 10:30 a.m. Communities and Mining: Why it Works Eric Hill, General Manager, Kinross – Fort Knox Mine Jan Trigg, Manager, Community Relations and Government Affairs, Coeur Alaska – Kensington Gold Mine Wayne Hall, Manager, Community and Public Relations, Teck Alaska Incorporated Lance Miller, Vice President, Resources, NANA Regional Corporation 11:30 a.m. Networking Break Noon Keynote Luncheon: Sponsored by Holland America Line Navigating Alaska’s Inside Passage and Policy Linda Springmann, Vice President, Deployment and Tour Marketing, Holland America Line 1:30 p.m. Progress Report on the AKLNG Project Steve Butt, Senior Project Manager, Alaska LNG Project Dan Fauske, President, Alaska Gasline Development Corporation Mike Navarre, Mayor, Kenai Peninsula Borough 3 p.m. Grand Raffle Drawing Send-off Champagne Toast – Sponsored by CLIA Alaska

Pebble conflict moves to Capitol Hill following latest report

The fight over the proposed Pebble mine at times makes politics look tame. That impassioned battle resumed on Capitol Hill Nov. 5 when the House Committee on Science, Space and Technology heard from those on the front lines of both sides. The committee also received testimony from former Maine senator and Defense Secretary William Cohen, whose recently published report about the Environmental Protection Agency’s involvement in the matter has once again made Pebble a topic of national debate. Published Oct. 6, “The Cohen Report,” as it is known, questions the objectivity and scientific process of the EPA’s Bristol Bay Watershed Assessment. The assessment is the baseline document used by the EPA to justify its attempt to block Pebble development through its Clean Water Act Section 404(c) authority, which gives the agency the power to prohibit projects that would have an “unacceptable adverse effect” on fish, wildlife or wetlands habitat. The title of the hearing, Examining EPA’s Predetermined Efforts to Block the Pebble Mine, leaves little wonder about the sentiment of committee chair Rep. Lamar Smith, a Texas Republican. “Secretary Cohen’s report lays out evidence that shows collusion and a cozy relationship between the EPA and groups actively opposed to the Pebble mine,” Smith said in a statement to open the hearing. In its ongoing lawsuit against the EPA in U.S. District Court of Alaska, Pebble contends the agency violated the Federal Advisory Committee Act by working with anti-mine groups to develop the Bristol Bay Watershed Assessment and shunning Pebble from the process. Additionally, the mine developers claim the agency had already determined it would use its 404(c) authority to prohibit a large mine on Pebble’s copper and gold claims before the multi-year assessment process officially began in 2011. The judge in that case, Judge H. Russel Holland, granted Pebble an injunction about a year ago, halting the 404(c) process until the suit is resolved. The EPA argues it met with Pebble representatives 30 times while drafting the assessment and that Pebble had additional opportunities to have its voice heard. The Federal Advisory Committee Act, or FACA, requires government agencies remain impartial and hold open meetings — published in the Federal Register — with both sides of contentious issues represented. Pebble Limited Partnership board of directors chair John Shively, a former Alaska Department of Natural Resources commissioner, said Nov. 5 at the Alaska Miners Association annual meeting in Anchorage that EPA Region 10 Administrator Dennis McLerran lied to him in a letter sent when the assessment began by claiming it was not aimed at stopping Pebble. Shively also asserted that the EPA lied to the public about how the movement to stop Pebble began. “I spent a fair amount of time in rural Alaska and I never believed that Tribal governments out in Southwest Alaska had any idea what Section 404(c) of the Clean Water Act was,” Shively said. Pebble insists it has evidence obtained through Freedom of Information Act Requests that prove the EPA helped draft the petition submitted by six Bristol Bay-area Tribes that urged the agency to invoke its 404(c) power and spurred it to begin the assessment. “Unfortunately, it appears that the Pebble mine project is another victim of this EPA’s extreme agenda,” Smith stated. “In fact, one of the former EPA employees who this committee found to have colluded with environmental groups to stop the Pebble mine project fled the country when Congress attempted to interview him.” The employee Smith referenced is former Kenai-based EPA biologist Phillip North, who was scheduled to be deposed in Anchorage Nov. 12 by Pebble and EPA attorneys. Pebble has said it believes North is in Australia, but his exact whereabouts are unknown. In an interview with the Redoubt Reporter published July 17, 2013, North said he planned on sailing around the world with his family after his retirement from the agency. The 364-page Cohen report supports Pebble’s claims. At the same time, groups opposed to the mine have hammered Cohen’s assertion that it is an independent document because Pebble Limited Partnership commissioned it. Former Republican Alaska Senate President Rick Halford testified to the House committee that before learning of Pebble he had never opposed a mine project. However, the size and location of the proposal by Pebble Limited Partnership forced him to take a stand against its development. “The size of the Pebble deposit is beyond imagination,” Halford said. “The pit would be well over a mile deep in places, and the footprint would cause the direct loss of between 24 and 94 miles of stream; 1,200 to 4,900 acres of wetlands; and 100 to 450 acres of ponds and lakes. The waste would be stored on site in perpetuity.” While not directly responding to Halford, Shively said Nov. 5 back in Anchorage that the impact of the mine has been vastly overblown. “The idea that you could build something (on) several thousand acres, with the kind of grade that we have — over 99 percent of what we take out of the ground is basically just dirt — how we could devastate a fishery is beyond me, but that’s what people have been told,” Shively said. He described the mines the EPA drafted as “fantasy mine plans.” Shively added that the EPA’s requirements for an acceptable mine in Bristol Bay are for a project that is uneconomically small. “(The EPA) designs mines that fail; we’re going to design a mine that succeeds,” he said. Halford also cited more than a dozen claims by Pebble that it would begin the federal permitting process, the first of which came in 2004. He called those claims “empty promises” to start the public review process which would bring resolution to the issue for area residents. Cohen’s report omits the fact that Pebble itself has been the only thing stopping the project from entering the National Environmental Policy Act review process, Halford said. Sen. Lisa Murkowski, who has been a harsh critic of the EPA under President Obama, also criticized Pebble back in 2013 for not releasing a formal mine plan that could be reviewed. Shively insisted Pebble Limited Partnership will enter the review process on its own timeframe, not the opposition’s timeframe. Halford added that the EPA’s involvement in evaluating what would be the largest open-pit mine in the country that would lead to obvious environmental impacts should not be a surprise. “As a resident of Bristol Bay, I can tell you that nothing seems predetermined to me in EPA’s actions,” Halford testified. “EPA collected information and data, met with and listened to both sides, and engaged in extensive outreach to all the stakeholders. I do not believe that EPA’s engagement itself was out of the ordinary as it is common for developers and the public to seek EPA’s perspective in advance of formal project initiation.” Elwood Brehmer can be reached at [email protected]

Draft EIS nearly ready for Donlin, in the works for Chuitna

Mining companies involved with several important projects aren’t ready to press the button on construction just yet, but they are positioning things to be ready to go when metals and commodity prices tick up, as they surely will. One large project being watched closely is Donlin Gold in the mid-Kuskokwim River region west of Anchorage, a potential $6.7 billion surface gold mine. After years of work the U.S. Army Corps of Engineers is expected to publish a draft environmental impact statement, or DEIS, later this month, James Fueg, Donlin Gold’s technical services manager, told the Alaska Miners Association at its annual convention in Anchorage Nov. 5. Publication of the DEIS would be followed by a series of community meetings in the Yukon-Kuskokwim region, including one hearing in Anchorage. If things proceed as hoped, the final EIS would be published in early 2017 following by a Record of Decision later that year. The big question following that is whether the mine will be economic and profitable enough for its developers, Barrick Gold and NovaGold Resources, to commit to spending several billion dollars on construction. Communities in Southwest Alaska have a lot riding on the decision. Calista Corp., the Alaska Native regional corporation for the Y-K delta, is the subsurface minerals owner. The Kuskokwim Corp., a consortium of local village corporations, owns surface lands at the mine site. If Donlin Gold is developed it will be a major employer in the region, now one of the state’s most economically-depressed areas. The prospect itself has 34 million ounces of gold in the measured-and-indicated reserve category, a classification that means companies have a high degree of confidence in the estimate, and another 11 million ounces that are “inferred” resources, or gold estimated to be present but requiring more definition. Chuitna Another large mine project closer to Anchorage that is inching along in its regulatory approvals is the Chuitna coal project, on the west side of Cook Inlet. The mine is planned by PacRim Coal, the owner of coal leases on state-owned lands. Dan Graham, manager of the project, told the Alaska Miners Association convention that the U.S. Army Corps of Engineers expects to have a draft EIS by late April or early May 2016, a milestone in a regulatory process that has taken several years. Graham said the Corps recently completed its internal review of a draft of the document, an important step, and has turned the draft over to other federal and state agencies that are cooperating in the EIS. “We also received our first permit Sept. 25, a minor air quality permit from the state,” Graham told the conference. If the Chuitna project receives final regulatory approval and is approved by its owners for development, construction would require two to three years and the mine itself would have a 25-year production life, Graham said. It is likely that would be extended by new resource additions, which is common with mines. Chuitna has been in the news recently because of an active opposition campaign by environmental groups who protest the company’s plan to mine through a creek that is salmon habitat. Graham said the company plans to create alternative habitat and in any event to restore the habitat along the creek when mining is complete, a procedure that has been used elsewhere in Alaska in disturbed areas. Also, PacRim can work with a decision by the state Department of Natural Resources to award a water rights application to a nongovernmental organization in a lower area of creek outside the mine area, Graham said. The principle of the DNR’s decision, the first award of water rights to an entity other than a government agency, is disturbing as a precedent, he said, but PacRim will ensure that adequate water is flowing through the lower part of the creek. The Chuitna project has had a long and tortured history and not all of the problems and delays can be laid at the feet of government agencies and opposition groups, Graham told the miners. Some of the blame is shared by the company, he said, which made several changes in scope and design. While these are overall improvements, the result has been delays and complications for the regulators, he said. “There are lessons to be learned from this,” Graham said, The state coal leases were originally awarded in 1968 to the Wilson-Bass-Hunt group, who were exploring in Alaska at the time. In the 1980s the Bass-Hunt group, which now owns PacRim Coal (Wilson has dropped out) entered a joint-venture with Diamond-Shamrock. The groups did substantial development work for a large surface coal mine. Major permits were granted in 1987 and an environmental impact statement was approved in 1990. However, the Pacific coal market had meanwhile slumped. Diamond-Shamrock exited the project and Bass-Hunt regrouped to continue working. There were changes in the project design and a relocation of a proposed port, all which meant changes to the permit applications. A major event occurred in 2010, however, when the U.S. Army Corps of Engineers took over as lead agency on a new EIS effort, replacing the Environmental Protection Agency. That was in the ninth year of planning under the revamped development plan, Graham said, and it also meant the Corps had to gear itself up to supervise a major Alaska mining project, which it had previously not done. “We had a situation where we were working with two different lead agencies, and over nine years there were 21 changes in key personnel associated with the project,” Graham said. It took some time, but the Corps rose to the challenge. “They scrambled to get up to speed on coal mine permitting. They were able to bring in specialists from other coal-mining states and to send Alaska personnel outside for training,” he said. The draft EIS is now in its final stages. Long lead times Donlin Gold has had an incubation period almost as long. The mid-Kuskokwim has been a historic placer mining area, which meant that explorers knew it was a good place to look for gold, mainly the lode gold sources of the placers. The gold prospect at Donlin Creek was actually discovered in the 1970s by prospecting crews working with Calista Corp., which had just selected lands under its Alaska Native Claims Settlement Act entitlements. After gold was found, Calista worked to get a mining company interested and after several unsuccessful attempts succeeded in attracting Placer Dome, a mid-sized mining company, for a more extensive exploration. Exploration drilling began in the 1980s and a very large gold resource was defined. However, a plunge in gold prices caused the company to suspend exploration. A small “junior” exploration company, NovaGold Resources, stepped in with a plan to invest and continue exploration in return for a share of the project. Placer Dome accepted, and NovaGold’s work resulted in more gold being located. Eventually the smaller company earned a 50 percent share. Meanwhile, in 2006, Barrick Gold, a major mining company, acquired Placer Dome and took over as operator and as NovaGold’s partner. Barrick poured in more funds for exploration and in 2006 and 2007, at the peak of exploration, the project was spending $2 million a week, Fueg told the AMA. Local hiring and contracting was a priority and even in its exploration phase the project became an economic stimulus for villages in the region. The engineering and design efforts were substantial and an initial capital cost estimate of $4 billion grew to $6.7 billion as the project scope changed, including the addition of a 314-mile 14-inch pipeline from Southcentral Alaska that would bring natural gas to the project. Energy costs were always a major concern and the project team investigated alternatives like wind and peat-fueled power generation along with barging large volumes of diesel up the Kuskokwim River. Finally the gas pipeline was decided on as the most practical alternative. Livengood Another big mine project is making progress, although it has been under the radar for a while. This is International Tower Hills’ Livengood gold project, a potential large surface gold mine on the Elliot Highway 70 miles north of Fairbanks. There are 15 million ounces of measured-and-indicated gold resources, a category in which mining companies have a great deal of confidence, and another 4 million ounces of inferred gold resources, where further exploration is needed. “We are one of North America’s largest known, undeveloped gold resources, and we’re right on a paved, all-weather highway,” said ITH President Tom Irwin. Irwin is a mining veteran who led the development of the Fort Knox mine, and who is also a former state Natural Resources commissioner. If it were developed the Livengood mine would be similar to the Fort Knox gold mine also near Fairbanks but larger, Irwin said. ITH is reworking a plan for a mine the company developed in 2013 but which proved too expensive for current gold prices. The cost estimate was in the range of $2.8 billion to $2.9 billion for a mine that would process 100,000 tons of ore per day. The project team went back to the drawing boards and is now reworking the plan to fit a lower gold price environment. “We’re looking at everything, the ore body, our mining procedure, water management and tailing disposal, and a one-stage as well as two-stage mill. We’re looking at how to optimize value,” Irwin said. Among two areas of focus in the new planning, Irwin said, is a possible acceleration of processing of higher-grade ore, leaving lower-grades until later, a plan also followed at Fort Knox in its initial production. Another area of scrutiny is how to manage water most efficiently and minimize its on-site storage, which would reduce capital costs as well as environmental risks. Energy is a major cost for the mine and ITH is still looking at two options, purchasing power from Golden Valley Electric Association, the Interior power cooperative, or generating power at the mine. If a North Slope natural gas pipeline is built it would pass nearby, and could possibly supply the mine with gas. Meanwhile, metallurgical testing and engineering is still underway to find an optimal mine process, Irwin said. What may emerge is a somewhat smaller, more efficient mine that could be profitable even at today’s gold prices, he said. ITH expects to release its revised mine plan in the first quarter of 2016, Irwin said. Tim Bradner can be reached at [email protected]

Miners seek bright spots on horizon

If you look around the Dena’ina Civic and Convention Center in Anchorage next week you wouldn’t believe there’s a slump in mining industry. The Alaska Miners Association holds its annual convention and trade show Nov. 1-7 and the convention’s massive trade show will be of record size, taking all of the convention center’s vast ground floor and a share of the second floor. About 1,000 people are expected at the convention, said AMA’s executive director, Deantha Crockett. That’s about the same as last year. The robust turnout belies the industry’s actual condition, which is down mainly because of low metals prices. A more somber mood will prevail compared with happier times, when gold prices were near $1,800 per ounce. They’ve been stuck at about $1,200 per ounce for an extended period. Still, people are still at work, some development-phase projects are still proceeding and the state’s seven operating mines are doing well. However even with those, capital budgets are tight and exploration budgets are very limited. If there are brighter spots on the horizon one is that fuel costs are down, and energy is a big-ticket cost item for mines. Another one, Crockett said, is that there appears to be a push-back developing on a national level against the encroachment of regulations by federal agencies like the U.S. Environmental Protection Act. There are still problems in the regulatory environment, but an order by a federal judge halting, at least temporarily, the EPA’s new “waters of the United States” rule is a sign of hope. “We’re starting to see a real examination of federal overreach, and it’s getting attention in Congress,” Crockett said. The ongoing dispute over Pebble is another example. As more information comes out about how the EPA developed its plan for a preemption of mining in the Bristol Bay region, with agency staffers working secretly with opponents to mining, the worse the agency looks, she said. At the convention itself, Crockett said the Tuesday luncheon talk on the state’s fiscal gap, by Northrim Bank president Joe Beedle and economist Mark Edwards, will be important. Lt. Gov. Byron Mallott will speak at noon Wednesday on Alaska-Canada trans-boundary issues, which affect mining projects in British Columbia that are near the Alaska border, and which can affect watersheds in Alaska. Wednesday is an all-day session on industrial safety, which is important in most industries. U.S. Sen. Dan Sullivan will address the AMA’s annual banquet on that night. On Thursday, four Alaska Native corporations, Sealaska Corp., Ahtna Inc., Doyon Ltd. and Eklutna Inc. will discuss mineral development on Native-owned lands. The full schedule is on the facing page.

Former EPA biologist North’s whereabouts still unknown

Where in the world is Phillip North? The former Environmental Protection Agency biologist is scheduled to be deposed by Pebble Limited Partnership and EPA attorneys Nov. 12 in Anchorage; however his whereabouts are unknown to both sides. North is seen as a key witness in Pebble’s lawsuit against the EPA. In the lawsuit filed last year, Pebble contends the agency colluded with Alaska Native groups and other mine opponents while drafting the Bristol Bay Watershed Assessment. The assessment is the scientific basis for the EPA’s pending Clean Water Act Section 404(c) action, which would preemptively block large-scale mining in the Bristol Bay region. North, who retired from the EPA in 2013, worked extensively on drafting the 1,000-plus page assessment, which was finalized early in 2014. The EPA contends Pebble had the same access to agency officials as anyone else with interest in the Bristol Bay Assessment, and that any actions that potentially violated federal public meeting and objectivity laws were incidental. U.S. Alaska District Court Judge H. Russel Holland halted the EPA’s Section 404(c) proceedings with an injunction last November, until the suit is resolved. In his recent subpoena order, Holland ordered Pebble to offer up $2,400 to cover North’s travel expenses to Anchorage; Pebble attorneys suggested $1,500 in their motion to subpoena. He is believed to be New Zealand or Australia. Holland also wrote that he believes the EPA should be as vested as Pebble in hearing North’s testimony to resolve speculation about what went on during the assessment process. Responsive documents to Pebble’s Freedom of Information Act requests have made it clear North drafted documents on a private computer that were not forwarded to EPA systems and encrypted documents on a thumb drive that EPA has not been able to access, according to Holland. Pebble spokesman Mike Heatwole wrote in an email that the company does not know much about North’s location and as a result Pebble may seek to delay the Nov. 12 deposition. EPA Region 10 said in a formal statement that, “as with other previous EPA employees, the agency has no information or comment on his location.” In an interview with the Redoubt Reporter published July 17, 2013, North said he planned on sailing around the world with his family after his retirement. He is also quoted as supporting the EPA’s then imagined Section 404(c) action to protect Bristol Bay’s world-renowned salmon runs. Elwood Brehmer can be reached at [email protected]

NANA makes gold strike; work continues amid price slump

Things aren’t great for Alaska’s miners right now, but despite the extended downturn in metals prices some explorers are pressing ahead. NANA Regional Corp., which conducted its own exploration, announced what it termed a “significant” new gold discovery on state lands on the eastern Seward Peninsula. However, the overall number of new “grassroots” exploration projects is sharply down this year compared with previous years, and the suppliers and contractors who support explorers are feeling the effects. There was some good news for NANA, however. The corporation conducted a small program of six holes drilled totaling 3,100 feet. There were good results in the mineralization tested. One hole showed grades of 20.5 grams per ton, or gpt, of gold; 92 gpt of silver; 1.79 percent zinc and 2.63 percent lead. There was also thin, high-grade interval of 175 gpt gold and 470 gpt silver. Lance Miller, NANA’s vice president for natural resources, said the mineral values are encouraging. “With this summer’s drilling we have identified the lode source for the placer gold found in the northern Seward Peninsula area,” he said. Information from the drilling combined with geologic and soil sampling by NANA over several previous seasons have identified a belt of mineralization along a 40-mile trend, he said. The Kotzebue-based Alaska Native regional corporation is also involved in another exploration project, this one in the Ambler Mining District in the upper Kobuk River area in an alliance with NovaCopper Resources, an exploration company. NovaCopper has made significant high-value copper discoveries at the Arctic deposit in the area, where it holds mining claims. NANA owns lands in the region including at Bornite, another known copper discovery. The two companies are working together on exploration on both prospects, which NANA having an option to buy into Arctic and NovaCopper an option to buy into Bornite. In 2015, NovaCopper drilled 14 test holes at Arctic, extracting 3,056 meters of core in a $5.5 million program. The objective was to test the continuity of high-grade ore zones identified at Arctic, the company said in a press release. To date, NovaCopper and its predecessor company, NovaGold, have drilled 43 core holes in addition to 92 holes drilled by the previous owner, Kennecott. Indicated resources (measured by drilling) are estimated at 23.8 million tonnes and an additional 3.4 million tonnes of inferred, or estimated, resources. In the indicated resource category the metal values were measured at 3.26 percent copper; 0.71 gpt of gold; 53.2 gpt of silver; 0.76 percent lead and 4.45 percent zinc. NovaCopper also announced in July that it was beginning work on the pre-feasibility study of the Arctic deposit, an important step in the development program. Work on that is expected to take two to three years. Other mines progressing Exploration aside, there are a number of projects where discoveries have been made that are gradually working their way through the web of regulatory approvals. The big Donlin Gold mine in the mid-Kuskokwim River region, for example, may publish its long-awaited draft environmental impact statement by the end of 2015. Assuming regulatory hurdles are cleared, Barrick Gold and NovaGold Resources, the developers, must still make a decision to develop the mine. That is of real interest to Calista Corp., the Alaska Native regional corporation that owns mineral rights, and The Kuskokwim Corp., owned by local village corporations, which holds the surface lands. It was exploration by Calista’s geologists that led to the gold discovery although there had long been placer mining in the area. Another project in an advanced stage of development planning is International Tower Hills’ Livengood gold project north of Fairbanks. The gold resource is large and well-defined, but a construction decision will likely require an upturn in gold prices. The company is meanwhile working on ways to reduce costs. Early cost studies showed the project, as designed, would not be viable at current gold prices. “We’re still in the optimization stage, working to bring capital and operating costs down to where the project would be viable at lower prices,” said ITH spokesman Rick Soley. Meanwhile, environmental baseline monitoring and some other work continues at the mine site as well as metallurgical analyses at other locations, he said. If it is developed, Livengood would be a surface mine mining low-grade ore similar to Fort Knox, a producing mine also near Fairbanks, but larger. It would likely employ over 400 in operation, Soley said. Two Southeast mines in advanced stages of exploration and development planning include Bokan Mountain, a rare earths project, and Niblack, a multi-metals discovery. More ore reserves were discovered at Bokan Mountain this year and Niblack continues to work on a plan to process is ore in nearby Ketchikan, which would be an important economic boost for that community. Heatherdale Resources Ltd. is developing Niblack. Bokan is being developed by Ucore Rare Metals Inc. In 2014 the company added 1.04 million tons of ore to its resource base through deeper exploration drilling at the prospect. The company previously reported 4.88 million tons of resources. The large Pebble project near Iliamna is in a holding pattern. The company, Pebble Partnership, is in litigation against the U.S. Environmental Protection Agency over the agency’s attempt to preempt large mines in the Bristol Bay region. Improper procedures by EPA are being contested. If the lawsuit is won, or if a settlement is reached, Pebble may be allowed to apply to state and regulatory agencies for its permits. That would allow for a mine development plan to be made available to the public. Operating mines Meanwhile, the state’s operating mines are doing well. Near Juneau, the Greens Creek Mine, operated by Hecla Mining Co., is projected to produce 7.3 million ounces of silver, down somewhat from 7.8 million ounces in 2014. The mine holds substantial silver, gold and lead reserves and resources. An aggressive, three-rig drilling program was conducted in 2015, budgeted at $5.8 million. Over the last 11 years drilling efforts have replaced or added to resources at the mine. North of Juneau, at Berner’s Bay, the Kensington Mine continues at a steady production rate. Ore production totaled 165,198 tons in the third quarter of 2015 with 28,688 ounces of gold produced, compared with 145,097 tons of ore mine in third quarter 2014 and 30,773 ounces of gold produced. Kensington is operated by Coeur Alaska Inc. At the large Fort Knox surface mine near Fairbanks, Kinross Gold Corp. is on target to produce about the same amount of gold as in 2014, which was 379,064 ounces. The company is adding equipment, commissioning four new 793F haul trucks and completing a booster pump station in the mine process facilities. Coal production will be down in 2015 at the Usibelli mine at Healy, the state’s only producing coalmine, because of reductions in exports. Usibelli Mine Inc. will produce about 1.2 million tons of coal this year, down from almost two million tons per year a few years ago when export markets were stronger. Demand from Usibelli’s core Alaska markets, six Interior Alaska coal-fueled power plants, will hold steady or even increase somewhat when Golden Valley Electric Assoc.’s new Healy 2 power plant becomes fully operational in 2016.

State trust appeals DNR decision on Chuitna water reservation

It seems nobody likes the Alaska Department of Natural Resources’ most recent Chuitna mine decision, including a state authority it oversees. The Alaska Department of Law filed an appeal on behalf of the Alaska Mental Health Trust Authority against the Department of Natural Resource’s Oct. 8 decision to grant an in-stream flow reservation, or IFR, to Chuitna Citizens Coalition for the lower section of Middle Creek. PacRim itself also filed an appeal of DNR’s decision, along with several industry and private groups. Chuitna Citizens Coalition has not filed an appeal, though members were unhappy with the Oct. 8 decision as well for not granting its two other in-stream reservation requests. The period for appeals is now closed. Middle Creek is part of the watershed for a proposed coal mine, and an integral part of the drainage process necessary to complete the mine. The bulk of the proposed mine’s land is owned by the trust. The Alaska Mental Health Trust Authority was established in 1956 and placed under the Department of Natural Resources’ authority after statehood in 1959. The U.S. Congress gifted it one million acres of land to be used for developing resources for Alaskans with mental health issues. The trust currently has roughly 80,000 such beneficiaries. John Morrison, the acting executive director for the trust’s land management office, said the trust is effectively a third party in the dispute with only a ceremonial connection to DNR, though it may not appear that way to an outsider. “It’s really kind of a relic of the settlement that we’re here,” said Morrison. “In that light, we use the attorney general’s office. Our only interaction with the process is the same as any other third party. We act like a private land owner.” Potentially, an administrative hearing between the trust and DNR would have to be settled with both parties being represented by the Alaska Department of Law. Because the trust typically uses DNR’s attorney, it has had to switch to Assistant Attorney General Dario Borghesan within the Department of Law,. Few parties appear satisfied with DNR. The coalition characterized DNR’s decision as a “dodge,” and a concession to the coal industry at the expense of Alaska salmon, as it only granted the lower reach IFR.  “This decision doesn’t do enough to protect fish in the Chuitna River because it doesn’t keep water flowing in the salmon-spawning areas of Middle Creek,” said Ron Burnett, a Beluga homeowner and founding member of the Chuitna Citizens Coalition, in a statement. The trust, which is overseen by the Department of Natural Resources, calls the DNR decision “arbitrary” in its appeal and a dangerous precedent for allowing private parties to derail resource development. The Chuitna Citizens Coalition IFR is the first granted to a private group, rather than state organizations. “(In-stream flow reservations) can also be misused to thwart or discourage responsible resource development in a state whose socio-economic well-being depends on it,” the appeal reads. “And overly expansive interpretation of AS.46.15.145 could jeopardize development across Alaska and, with it, the trust’s ability to provide for its beneficiaries.” The trust argues the Chuitna Citizens Coalition IFR could prevent the mine and thus the $300 million of projected royalties PacRim would owe the trust over the course of the mine’s lifespan. The stream in question is located on land the trust has been endowed. Morrison said DNR’s decision ignores the trust’s freedom to manage its own land in accordance with the best public interest. Trust land, he argues, is not managed as state land and should not be subject to state management decision that contradicts the trust’s plans for best use. “The entire length of their IFR is located on trust land,” said Morrison. “I don’t know there’s been any consideration of how someone would manage or monitor this, if they need permission from us to do so. If this were Native corporation land, how would people react?” Furthermore, the trust believes DNR contradicts itself, allowing an IFR where it previously stated none are needed. “Even though the Division (of Land and Water) conceded that applicable regulation and permitting requirements processes ‘can adequately protect the water resources in Middle Creek,’” the appeal reads, it nonetheless found that there is a need for a reservation of water in the Lower Reach. Lastly, the trust argues DNR left unanswered questions about how the reservation will be administered. The trust does not know whether what measurement of IFR Chuitna Citizens Coalition will use, or how it will monitor the flows. The mine’s opponents boil the argument down being against the IFR is being against salmon habitats. “It’s surprising to see these corporations wanting to fight Alaskans who just want to keep water in the salmon stream,” said Bob Shavelson, executive director of Cook Inletkeeper. DJ Summers can be reached at [email protected]

DNR rules on Chuitna water rights petitions

Alaska salmon scored a partial victory on Oct. 6, but PacRim’s coal mine could still happen. The Alaska Department of Natural Resources granted an instream flow reservation, or IFR, to Chuitna Citizen’s Coalition for the for the lower section of Middle Creek. Middle Creek is part of the watershed for a proposed coal mine, and an integral part of the drainage process necessary to complete the mine. Only Chuitna Citizen’s Coalition’s IFR for the lower section was granted by DNR. The coalition had also filed IFR requests for the middle and upper reaches. The coalition characterizes DNR’s decision as a “dodge,” and a concession to the coal industry at the expense of Alaska salmon. “Make no mistake, DNR is saying that a potential coal strip mine is more valuable to the public than protecting wild salmon habitat,” said Ron Burnett, a Beluga homeowner and founding member of the Chuitna Citizens Coalition, in a statement. “This decision doesn’t do enough to protect fish in the Chuitna River because it doesn’t keep water flowing in the salmon-spawning areas of Middle Creek.” Indeed, the decision has little direct effect on PacRim’s operations. The mine will still go through the permitting process over the next several years. DNR’s Water Resources Section Chief David Schade said the decision can be easily misunderstood, and cautions that Chuitna Citizen’s Coalition’s IFR does not grant the organization direct control of Middle Creek’s lower reach, nor does it forbid the mine from operating. The coalition will not be able to simply exercise any litigation against PacRim, or refuse to let PacRim operate simply on principle. Rather, it gives an entry point for bringing complaints to DNR. Chuitna Citizen’s Coalition will be able to bring issues to DNR for adjudication if it has evidence that the completed mine will affect Middle Creek’s lower reach flow quality. “This is not at all an operational decision for the mine,” Schade said, “It is a limited decision for instream flow. This is not a traditional water right. It’s different with the reservation certificate. It gives Chuitna Citizen’s Coalition the right to request that DNR look into any activity of upstream users if there’s some evidence upstream activity is affecting the downstream flow. They don’t have administrative rights.” Schade does believe the decision will help protect the stream. “We will protect the stream through the permitting process,” Schade said. “Before there will be any kind of activity at a mine site, we will have gotten a bigger picture of the water rights.” This marks the first time DNR has granted an IFR to a private party. IFRs are typically reserved for state and local governments, rather than private citizens or coalitions, though certain isolated cases exist giving IFRs to non-governmental organizations, according to Trustees for Alaska legal director Valerie Brown. Both PacRim and the mine opponents had filed applications for water reservations. PacRim representatives objected to Chuitna Citizen’s Coalition’s IFR, arguing that opening IFRs to private entities will open a Pandora’s box of complications in the future. “The big issue for us is the policy issue, whether DNR should allow private citizens to take part in the permitting process,” said Eric Fjelstad, an attorney representing PacRim, during an August DNR hearing. “We think that answer should clearly be no.” Schade said he doesn’t agree with PacRim’s argument, and thinks water rights are inherently public and subject to DNR’s discretion. “Water is a public resource, and clearly delegated to DNR,” Schade said. “The rights of the holder of an (IFR) boils down to two things: the rights to be a party to any future reviews, and also have a right to ask DNR to adjudicate.” PacRim’s proposal has seen intense criticism from Alaskans, who have collectively sent more than 7,500 letters of public comment to the Department of Natural Resources opposing the mine and supporting the establishment of water rights aimed at salmon habitat preservation. The mine would require PacRim to dewater salmon habitat to dig a strip mine for low sulfur coal. DJ Summers can be reached at [email protected]

Cohen Group questions EPA’s Pebble process

Former Maine Senator and Defense Secretary William Cohen agrees with Pebble Limited Partnership on at least one point: the Environmental Protection Agency’s Bristol Bay Watershed Assessment is not an adequate document to replace the federal environmental permitting process. Pebble contracted Cohen to review the procedure the EPA used to develop the assessment, which is the document the agency has based its Clean Water Act Section 404(c) proposed determination on. Section 404(c) of the Clean Water Act gives the EPA authority to prohibit any development project that it deems would have an “unacceptable adverse effect” on wildlife and nearby water supplies. Cohen asserts in the opening pages of the 364-page report that the work undertaken by him and his firm The Cohen Group was conducted as an independent review of the Section 404(c) action that began last year and the preceding events. He also notes that the report is not meant to take a stance on the project, rather it is to evaluate the process the EPA used in regards to Pebble. He further stated that Pebble had no control over the conclusions he reached and was not allowed to perform any edits on the report. More than 60 people were interviewed as part of the review process, including three former EPA administrators. The EPA did not allow current agency personnel to be interviewed for the report, according to Cohen. He claims that the EPA’s use of the 404(c) authority “compounded the shortcomings” of the assessment, that it used assumptions based on economic analyses done for Pebble to draw its conclusions instead of actual permit applications. Cohen states that EPA personnel had “inappropriately close relationships with anti-mine advocates” while compiling the assessment, raising questions as to whether the agency “orchestrated the process to reach a predetermined outcome.” A key argument in Pebble’s second lawsuit against EPA is that agency personnel and mine opponents formed de-facto advisory committees, which left Pebble out of the loop while researching the Bristol Bay Assessment, and violated public processes intended to be objective. Pebble is the first time the EPA has used its 404(c) authority to attempt to block a project before Clean Water Act permit applications have been submitted to the U.S. Army Corps of Engineers, which handles the permitting process for the agency. A U.S. District Court judge has stopped the 404(c) initiative at least temporarily while Pebble’s claims are heard in court. The EPA Inspector General is also examining the agency’s actions in regards to the Bristol Bay Watershed Assessment and Cohen calls for a Congressional Oversight Committee review. “This project is too important, for all stakeholders, to pilot a new, untested decision-making process,” Cohen wrote. “The fairest approach is to use the well-established permit/(National Environmental Policy Act) process, and I can find no valid reason why that process was not used.” He bases his conclusion at least partly on the EPA’s concession in comments to peer reviewers that gaps in the 1,100-page assessment that would be addressed in the NEPA process, which Pebble has not yet attempted to initiate. Sen. Lisa Murkowski criticized Pebble in 2013 for leaving Alaskans wondering if the controversial project would ever be built and called for the then-Northern Dynasty Minerals and Anglo American consortium to release more specifics about its plan. Pebble opponent groups were quick to criticize Cohen’s report after its release. Statements from Trout Unlimited Alaska, United Tribes of Bristol Bay and Commercial Fisherman for Bristol Bay all highlighted the fact that it was paid for by Pebble Limited Partnership. “The report wants Americans to believe that Pebble is the victim of an ‘unfair’ process. Let’s be clear, EPA’s process is one that is authorized by Congress under the Clean Water Act and is intended to be used in circumstances where mine activities will do insurmountable damage to the spawning rivers and habitat of this country’s last great sustainable wild resource: salmon,” a statement from United Tribes of Bristol Bay reads. Trout Unlimited Alaska Director Nelli Williams called the report “propaganda disguised as a credible document.” Pebble CEO Tom Collier said in a release that the EPA failed to take into account the potential economic benefits of a mine to an economy reliant upon a seasonal resource or the use of mitigation and control measures to reduce a mine’s impact on the environment, points noted by Cohen. “This report clearly makes the case about the criticality of a stable, objective and transparent permitting process for evaluating resource projects such as Pebble,” Collier said. “We did not ask The Cohen Group to evaluate a mine at Pebble as our view remains that this should be handled via the permitting and NEPA review process. The report validates the established regulatory and NEPA process is the fairest and most appropriate process for evaluating a complex issue such as ours.” The report also notes that Pebble participated in the assessment process with the EPA’s assurance that the final document would not be used to make a Section 404(c) decision. Since the release of the final Bristol Bay Watershed Assessment in January 2014, the EPA has acknowledged its conclusion that large-scale mining in Bristol Bay would significantly and irreparably damage the region’s salmon fisheries was drawn from the assessment as the primary evidence for working to ban the proposed mine. The official assessment process began in February 2011.

BC, Alaska to draft MOU for mine processes

JUNEAU — The province of British Columbia and the State of Alaska will draft a memorandum of understanding regarding mines proposed for and located in transboundary watersheds in British Columbia, BC Minister of Energy and Mines William “Bill” Bennett and Lt. Gov. Byron Mallot announced Wednesday at a press conference. Through the MOU, the State of Alaska and British Columbia hope to create a structured way for tribes, stakeholders, environmental groups, sport and commercial fishermen, tourism operators, and other concerned Southeast Alaskans to get information and share concerns about each stage of a mine in a transboundary watershed, including assessment, permitting, operation, closure and reclamation. Bennett said he doesn’t have a guarantee from Alaska that the two will get to a point where the state will sign an MOU, but that’s what BC is hoping for. “Our goal is to, obviously, ensure the environmental integrity, the pristine water quality of those river systems for all time,” Mallott said. “And we will vigorously act in Alaska’s interest to make sure that happens…. We hope that we will be able to expand that process of openness, transparency and meaningful involvement throughout our long-term engagement.” They also aim to involve tribes, first nations and industry in monitoring water quality in the watersheds affected, both for baseline and ongoing datasets. Bennett said he would like to have the memorandum in place within 30 to 60 days. “Such a document would not be engraved in stone,” Mallott said. “It would be living, based upon the needs and the changing circumstances as they may occur over time.” An MOU and International Joint Commission or federal involvement are not mutually exclusive, Bennett said. Concerned Southeast Alaskans have been calling for the involvement of the IJC under the Boundary Waters Treaty of 1909. The IJC resolves disputes about transboundary waters. “Signing a memorandum of understanding or a memorandum of agreement between a state and the province is a way for us to strengthen the relationship, and to create some structures around that relationship, so we have some direction going forward in how we’re going to do business. And for the life of me, I can’t see how it could be construed as a negative thing,” Bennett said. “It doesn’t preclude anything else.” Alaska will continue to engage the federal government, Mallott said; he hopes to speak with Secretary of State John Kerry about transboundary mining when Kerry is in Alaska to “impress upon him the importance of this issue to both of our nations,” to let him know about state and provincial efforts to work together, and to make sure State Department officials keep updated on the issue. For his part, Bennett said he welcomes federal Canadian government help if it is necessary.  One way the government may get involved, he said, is the issue of compensation to Alaskans “should the unthinkable happen.” That’s something some concerned Southeast Alaskans brought up to him over his time here so far, he said. Talks between the two countries were spurred forward following a tailings dam brach at the Mount Polley Mine in August 2014 that sent billions of gallons of toxic tailings into the Quesnel Lake watershed. “It’s a very difficult issue, because it’s an issue that all neighboring countries, I think, wrestle with from time to time,” Mallott said. “Canada and the US have wrestled with this probably for 100 years… I think the federal governments need to be involved in that part of the discussion.” Just the same, he said he thinks most issues can be resolved through provincial and state communication and cooperation. “We are working to have that engagement with all of those interests who have a passionate, direct involvement with these systems,” Mallott said. “Others who have a more public policy orientation — all of those views, all of those perspectives are hugely important. And creating the opportunity for those views to be shared across the border from both directions, I think, will be hugely important and helpful going forward.” It was the first time in more than 20 years for these kinds of international meetings, a release from Mallott’s office said. Bennett and a team from British Columbia were in Juneau for the first part of the week meeting with elected officials, tribes, miners, environmental organizations, fishermen and other stakeholders, as well as touring the Taku River. Today, Bennett and Mallott are in Ketchikan; other BC officials are touring Hecla Mining Company’s Greens Creek Mine on Admiralty Island. Contact outdoors writer Mary Catharine Martin at [email protected]

Judge blocks Obama administration regulation on waterways

BISMARCK, N.D. (AP) — A federal judge in North Dakota on Thursday blocked a new Obama administration rule that would give the federal government jurisdiction over some smaller waterways just hours before it was set to go into effect. U.S. District Judge Ralph Erickson in Fargo issued a temporary injunction against a the rule that would have given the U.S. Environmental Protection Agency and Army Corps of Engineers authority over some streams, tributaries and wetlands under the Clean Water Act. The rule was scheduled to take effect Friday. "The risk of irreparable harm to the states is both imminent and likely," Erickson said in granting the request of 13 states to temporarily stop the rule from taking effect. The judge said that among other things, the rule would require "jurisdictional studies" of every proposed natural gas, oil or water pipeline project in North Dakota, which is at the center of an energy exploration boom. The 13 states led by North Dakota asked Erickson to suspend guidelines that they say are unnecessary and infringe on state sovereignty. The federal government says the new rule clarifies ambiguity in the law and actually makes it easier for the states to manage some waterways. It wasn't immediately clear if the injunction applied to states other than the 13 that requested the injunction. North Dakota Attorney General Wayne Stenehjem, who filed the request, said he was pleased by the ruling. "This is a victory in the first skirmish, but it is only the first," Stenehjem said in a statement. "There is much more to do to prevent this widely unpopular rule from ever taking effect." Stenehjem said his reading of the ruling was that it applied to all 50 states, not just the 13 that sued. The EPA didn't immediately comment. The agriculture industry has been particularly concerned about the regulation, saying that it could apply to drainage ditches on farmland. The EPA and Army Corps said the only ditches that would be covered under the rule are those that look, act and function like tributaries and carry pollution downstream. A tributary would be regulated if it shows evidence of flowing water such as a bank or high water mark, the EPA says. The other states involved in the lawsuit are Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, New Mexico, Nevada, South Dakota and Wyoming. Erickson cited Wyoming in his ruling, saying the state would have to bear the cost of things such as issuing permits and has no way of avoiding the increased expenses under the regulation. State officials in North Dakota said the new rule will cost the state millions of dollars and take away from more important programs. State Agriculture Commissioner Doug Goehring said there's "confusion and anxiety" among farmers and other landowners over the initiative. At the very least, state officials argued, more time was needed to study the rule, which was finalized on May 27. Stenehjem — along with attorneys general and officials from 30 other states — wrote last month to the EPA and the Army Corps asking that the law be postponed at least nine months. Lawyers for the states said they heard nothing back from the government, so they filed a request for the preliminary injunction. The federal government said the request for an injunction was better suited to be heard by the 6th U.S. Circuit Court of Appeals rather than a federal judge, but Erickson rejected that notion.  

BC, Alaska to draft MOU for mine processes

JUNEAU — The province of British Columbia and the State of Alaska will draft a memorandum of understanding regarding mines proposed for and located in transboundary watersheds in British Columbia, BC Minister of Energy and Mines William “Bill” Bennett and Lt. Gov. Byron Mallot announced Wednesday at a press conference. Through the MOU, the State of Alaska and British Columbia hope to create a structured way for tribes, stakeholders, environmental groups, sport and commercial fishermen, tourism operators, and other concerned Southeast Alaskans to get information and share concerns about each stage of a mine in a transboundary watershed, including assessment, permitting, operation, closure and reclamation. Bennett said he doesn’t have a guarantee from Alaska that the two will get to a point where the state will sign an MOU, but that’s what BC is hoping for. “Our goal is to, obviously, ensure the environmental integrity, the pristine water quality of those river systems for all time,” Mallott said. “And we will vigorously act in Alaska’s interest to make sure that happens…. We hope that we will be able to expand that process of openness, transparency and meaningful involvement throughout our long-term engagement.” They also aim to involve tribes, first nations and industry in monitoring water quality in the watersheds affected, both for baseline and ongoing datasets. Bennett said he would like to have the memorandum in place within 30 to 60 days. “Such a document would not be engraved in stone,” Mallott said. “It would be living, based upon the needs and the changing circumstances as they may occur over time.” An MOU and International Joint Commission or federal involvement are not mutually exclusive, Bennett said. Concerned Southeast Alaskans have been calling for the involvement of the IJC under the Boundary Waters Treaty of 1909. The IJC resolves disputes about transboundary waters. “Signing a memorandum of understanding or a memorandum of agreement between a state and the province is a way for us to strengthen the relationship, and to create some structures around that relationship, so we have some direction going forward in how we’re going to do business. And for the life of me, I can’t see how it could be construed as a negative thing,” Bennett said. “It doesn’t preclude anything else.” Alaska will continue to engage the federal government, Mallott said; he hopes to speak with Secretary of State John Kerry about transboundary mining when Kerry is in Alaska to “impress upon him the importance of this issue to both of our nations,” to let him know about state and provincial efforts to work together, and to make sure State Department officials keep updated on the issue. For his part, Bennett said he welcomes federal Canadian government help if it is necessary.   One way the government may get involved, he said, is the issue of compensation to Alaskans “should the unthinkable happen.” That’s something some concerned Southeast Alaskans brought up to him over his time here so far, he said. Talks between the two countries were spurred forward following a tailings dam brach at the Mount Polley Mine in August 2014 that sent billions of gallons of toxic tailings into the Quesnel Lake watershed. “It’s a very difficult issue, because it’s an issue that all neighboring countries, I think, wrestle with from time to time,” Mallott said. “Canada and the US have wrestled with this probably for 100 years… I think the federal governments need to be involved in that part of the discussion.” Just the same, he said he thinks most issues can be resolved through provincial and state communication and cooperation. “We are working to have that engagement with all of those interests who have a passionate, direct involvement with these systems,” Mallott said. “Others who have a more public policy orientation — all of those views, all of those perspectives are hugely important. And creating the opportunity for those views to be shared across the border from both directions, I think, will be hugely important and helpful going forward.” It was the first time in more than 20 years for these kinds of international meetings, a release from Mallott’s office said. Bennett and a team from British Columbia were in Juneau for the first part of the week meeting with elected officials, tribes, miners, environmental organizations, fishermen and other stakeholders, as well as touring the Taku River. Today, Bennett and Mallott are in Ketchikan; other BC officials are touring Hecla Mining Company’s Greens Creek Mine on Admiralty Island.

DNR hears arguments for Chuitna tributary water rights

A small creek is causing big trouble for Chuitna mine developers and the Alaska Department of Natural Resources. The Alaska Department of Natural Resources, or DNR, heard arguments Aug. 21 from Chuitna Citizens Coalition, Cook Inletkeeper, the Alaska Center for the Environment, and PacRim Coal in the latest installment of a lengthy and contentious permitting process for a proposed coalmine in the Chuitna River drainage. The hearing centered not as much around the well-established pro-mining and pro-salmon arguments as a regulatory question. Representatives presented arguments for whether DNR should grant water rights to Chuitna Citizens Coalition, with which the Chuitna organization could potentially halt PacRim’s ongoing regulatory permitting process. Both PacRim and the mine opponents have filed applications for water reservations, and DNR must decide whose application will prevail. “The big issue for us is the policy issue, whether DNR should allow private citizens to take part in the permitting process,” said Eric Fjelstad, an attorney representing PacRim. “We think that answer should clearly be no.” PacRim’s proposal has seen intense criticism from Alaskans, who have collectively sent more than 7,500 letters of public comment to the Department of Natural Resources opposing the mine and supporting the establishment of water rights aimed at salmon habitat preservation. The mine would require PacRim to dewater 20 square miles of salmon spawning grounds to dig a strip mine for low sulfur coal. Chuitna Citizens Coalition, Cook Inletkeeper, and the Alaska Center for the Environment have filed for in-stream flow reservations, or IFRs, which would grant a measure of regulatory authority for one of the Chuitna River tributaries, Middle Creek. PacRim cannot build the mine without draining this stream. PacRim objects roundly to Chuitna Citizens Coalition’s IFR. IFRs are typically reserved for state and local governments, rather than private citizens or coalitions, though certain isolated cases exist giving IFRs to non-governmental organizations, according to Trustees for Alaska legal director Valerie Brown. PacRim and others argued that the unintended consequences of awarding IFRs to private citizens set a dangerous precedent for investment and development in Alaska. “There is no need (for privatizing IFRs) when you have the kind of permitting process you have here,” Fjelstad said. “The resources that you have here will be squarely addressed by the permitting process. This is the big issue. It’s the reason trade groups are here. They care about the integrity of the process.” Indeed, several representatives from oil, gas, and mining industries with no vested interest in the Chuitna Coal Project, including the Alaska Oil and Gas Association and the Alaska Miners Association, also voiced fear that granting Chuitna Citizens Coalition an IFR would have negative impacts on the industry. “It makes very little sense for water flow decisions to be made outside the regulatory framework of the permitting process,” said Alaska Miners Association Executive Director Deantha Crockett. “Alaskans rely on the permitting process. Chuitna is no exception.” The permitting process itself, mine proponents said, already takes into account the best public interest and conservation issues that concern Chuitna Citizens Coalition and others. DNR will always have those factors to consider, and snagging the process won’t help, they said. “There’s no upside to Alaska making this decision now,” said Josh Kindred, counsel for the Alaska Oil and Gas Association. “If you want to make a decision (to halt permitting) later, fine. Wait until you have all the information after the tried and true permitting process.” The Alaska Mental Health Trust Authority, the landowner for the bulk of the proposed mine, is entitled to a percentage of the mineral rights through a state trust, and argued against DNR granting IFRs because it would hinder the public interest. “The Alaska trust is the predominant land owner in the Chuitna River drainage,” said John Morrison from the Alaska Mental Health Trust. “The revenue anticipated from this project alone with effectively double our historic revenue from trust lands. The granting of an IFR would be the end of this project. The state has a fiduciary duty to trust land.” Brown of Trustees for Alaska argued that the IFRs would be in harmony with the Water Use Act, that the three private organizations have followed each requirement for filing, and that the fears of the mining industry are overblown. “This doesn’t turn (Chuitna Citizens Coalition) into some jackbooted regulator,” said Brown. “You have limited ability to do much. This does not prevent the administrative process. It won’t change the proceedings. We have a right to the adjudication.” Bob Shavelson, executive director of Cook Inletkeeper, disagreed that DNR’s choice amounted to a regulatory procedure, and that the matter at hand is, and can only be, about the health of the salmon. “This isn’t about the regulatory issue,” Shavelson said. “It’s about the fish… I’ve heard time and again that fish and mining can coexist. I’m sure there was a lot of money behind that at PacRim’s office. You can’t have it both ways. You’re either going to mine, or you’re going to fish, you can’t have both.” DNR has a tentative date of Oct. 9 scheduled for the IFR decision. DJ Summers can be reached at [email protected]

BC minister talks transboundary mine issues

JUNEAU — British Columbia Minister of Energy and Mines William “Bill” Bennett, on a four-day trip to Southeast Alaska, said after visiting the Tulsequah Chief Mine on Aug. 24 that the pollution the defunct mine has been draining into the Taku River watershed for decades should be fixed. Bennett and several other British Columbian representatives were in Southeast Alaska Aug. 23 through Aug. 27, meeting with tribes, stakeholders, government officials, environmental groups, elected officials and fishermen, as well as touring the Taku River, going to see Greens Creek Mine and other activities. On Aug. 24, Bennett and Lt. Gov. Byron Mallott visited the Tulsequah Chief mine. The Tulsequah Chief has been leaching acid mine drainage into the Tulsequah River since it closed in 1957, and Alaska has been asking British Columbia to clean up the mine site for years. British Columbia and Environment Canada have also been trying to get the companies that own it (they’ve changed over the years) to clean it up. Chieftain Metals Corp. is the current owner. Tulsequah Chief drainage “is not something that I’m proud of, as a British Columbian,” Bennett said. “It’s something that needs to be addressed.” A December 2014 report found that the drainage poses a low risk to fish in the Tulsequah River and is not affecting fish in the Taku River, into which the Tulsequah flows. Bennett mentioned those findings, but added that “it (the drainage) is still something that needs to be rectified. I think that BC is going to have to find a way to rectify it sooner rather than later, and I think it is a most legitimate criticism of us by those folks in Alaska that don’t like it.” The trip up the Taku, Mallott said, was “just a … further ratification” of the reasons to strengthen the working relationship between Alaska and the British Columbia government. “The bottom line for us is that Alaska’s interests are clearly, in a timely manner, in an appropriate manner, and in a very responsible manner, protected, and we will use every opportunity, we will use every tool that is available to us in order to achieve that,” Mallott said. IJC Bennett said those tools shouldn’t yet involve the International Joint Commission, which many Southeast Alaskans concerned about transboundary mining have been working towards involving under the Boundary Waters Treaty of 1909. “It’s very much premature to start rushing towards, you know, one big solution that’s going to make everybody feel better,” Bennett said of IJC involvement. First, he said, everyone needs to agree on the facts. “One of the things we need to do is get the facts straight in terms of what exactly is going on in Northwestern British Columbia,” Bennett said. Bennett said there’s a perception in Alaska that many of the transboundary mines the province is working toward approving are already in operation. The Red Chris, in the Stikine River watershed, began operating this year, and the Brucejack, in the Unuk River watershed, recently received federal environmental approval. “There is time to get this right,” he said of other proposed mines, like Kerr Sulphurets Mitchell, in the Unuk River watershed. He also said there’s a perception that the independent panel report on Mount Polley Mine’s August 2014 tailings dam failure, released earlier this year, said dry stack tailings is the only real option. “They in fact do not say that dry stack tailings is the only way to achieve best available technology,” Bennett said of the report. “If you have potentially acid-generating rock, you probably will want to put that underwater because it neutralizes the generation of acid. ... All the experts in mining are well aware of that. There’s a variety of ways you can achieve best available technology. ... Some folks have fastened onto the idea that the panel has said dry stack tailings is the only way to go, when in fact, they didn’t say that.” The report read: “Improving technology to ensure against failures requires eliminating water both on and in the tailings: water on the surface, and water contained in the interparticle voids. Only this can provide the kind of failsafe redundancy that prevents releases no matter what…. Simply put, dam failures are reduced by reducing the number of dams that can fail.” It added that, “... Mount Polley has shown the intrinsic hazards associated with dual-purpose impoundments storing both water and tailings.” It acknowledges the importance of the chemical stability Bennett mentioned, as well as the fact that water covers are a convenient way to arrest chemical reactions, but added that “chemical stability requires above all else that the tailings stay in one place” and recommends that “where applicable, alternatives to water covers should be aggressively pursued.” The Red Chris, which was approved just a few business days after the report came out, uses a watered tailings facility. Bennett says that BC will adopt and implement all seven of the panel’s recommendations and that he has a letter from one of the report’s authors attesting that dry stack tailings are not the only way. “Anybody that says the Red Chris was permitted in contravention of the report just simply hasn’t read the report,” he said. “There are many, many things that have been said that are not correct.” Trip goals Over the course of the four days he’s in Southeast Alaska, Bennett said he aims to build trust between Alaska and BC, to listen “to people that have interests in salmon” as well as state officials, fishermen and those in tourism and “to see what we can do to provide some comfort about BC’s mining processes.” “We don’t have any illusions about coming here for four days and suddenly, you know, having everybody jumping up and down saying, ‘Well, isn’t it great that BC’s potentially going to build a mine upstream from us?’” he said. “What we hope for is an opportunity to have some respectful dialogue with people who have been expressing concerns.” Bennett sought to find common ground with the concerned groups with whom he’s speaking, saying that he shares the same values as people here who are concerned. He added that he hunts and fishes himself. He and Mallott went fishing Aug. 25. “I understand why people feel so strongly about protecting what they have. ... There’s a way of life here that has tremendous value, and the people who live here don’t want to lose that. I get that. I understand that,” he said. BC also plans to offer Alaska additional access to the mine approval process and to “make it easier” to get information, which Bennett said he hopes will set environmental organizations and tribes at ease. “Folks in Alaska, because they’re downstream of these proposed projects, have every right to know how we’re doing our work in BC, and what evidence we’re basing our decisions on,” Bennett said. Bennett arrived in Alaska Aug. 23 with Cynthia Petrie, Chief of Staff; Wes Shoemaker, Deputy Minister for the Ministry of Environment; Dave Morel, Assistant Deputy Minister for the Ministry of Energy and Mines; Doug Hill, Mining Section Head of the Ministry of Environment’s Environmental Protection Division; Chris Hamilton, Senior Executive Lead Executive Project Director for the Ministry of Environment’s Environmental Assessment Office, and Tania Demchuk, Senior Environmental Geoscientist for the Ministry of Energy and Mines. Bennett’s Juneau-based schedule ran through Aug. 26; he spent Aug. 27 in Ketchikan. On Aug. 27, Bennett, Mallott, Hamilton, Morel, Petrie and Blake flew to Ketchikan to meet with the Ketchikan Indian Community representatives, have lunch with the Chamber of Commerce, and meet with the Alaska Miners Association. Other representatives will tour Greens Creek mine on Admiralty Island. Contact Juneau Empire outdoors writer Mary Catharine Martin at [email protected]

Greens Creek, Kensington mines expanding production

Minerals prices are still low but Alaska’s producing mines are doing well, for the most part. Two underground mines near Juneau, the Greens Creek Mine on northern Admiralty Island and the Kensington Mine at Berner’s Bay north of the capital city, both showed increases in production and improved efficiency. Hecla Mining Co., which owns Greens Creek, said production of silver at the mine was up 10 percent in the second quarter of 2015 compared with the same period of 2014. Gold production dropped at the mine but silver is the more important metal in the ore being mined. Greens Creek also produces zinc and lead. A key element in the higher silver output was improved recovery of the metal in the Greens Creek process mill, the company said. “Higher grades and recoveries at Greens Creek during the quarter continued to improve the mine’s already strong performance,” said Hecla President and CEO Philips Baker Jr. in a statement issued with the quarterly report. Mike Sarte, Hecla’s manager of Alaska external relations, said the improved recovery is a “game changer” for Greens Creek. “This is very significant. Historically most mines produce higher grades first and then the grade trends lower,” as lower-quality ore zones are tapped, he said. “In this case, while we can’t control the grade of the ore we can control how we process it. Changes in the mill process have increased silver recovery.” In another development at Greens Creek, Hecla has started work on the long-planned expansion of its tailings storage facility. All permits are now in hand for the expansion and SeCon, a Southeast Alaska construction company, has been contracted to do the work and removal of surface overburden is now underway. The $44 million expansion, which will cover 18 acres, will take three years to complete. The larger tailings facility will be sufficient to support Greens Creek until 2027 to 2028, and Hecla has already started discussions on another expansion after that, which would further extend the life of the mine. Greens Creek now employs about 413 workers, most who live in Juneau, with a $62 million annual payroll. At the Kensington Mine, which produces gold, the volume of ore mined averaged 170,649 tons in the second quarter of 2015, up from 163,749 tons in second quarter 2014, and gold production increased to 29,845 ounces compared with 28,089 ounces in second quarter 2014. The average gold grade was the same in both periods, at 0.18 ounce per ton, but the gold recovery rate, in the process mill at the mine, improved slightly to 94.9 percent in second quarter this year from 94.5 percent in the same period of 2015. The big news for Kensington is that the mine is expanding into the nearby Jualin deposit, with work on access the deposit beginning in July. When mining from Jualin is fully ramped up in 2018 the total Kensington gold production is expected to reach 149,000 ounces annually, up 26 percent. Operations at the underground Pogo gold mine near Delta, in Interior Alaska, are proceeding normally this year except for challenges with forest fires this summer, which blanketed much of the Interior with smoke. “In some weeks we had smoke at the mine no matter which way the wind was blowing,” said Lorna Shaw, spokeswoman for Sumitomo Metal Mining, the owner and operator of Pogo. One fire broke out five miles from the mine and grew to 1,000 acres until being controlled by state Department of Natural Resources crews with the assistance of Pogo staff. The fire did not threaten mine operations, however. Pogo is approaching two important milestones. The mine will reach the 3-million ounce production threshold late this summer, and is also close to operating for two years without a lost-time accident, Shaw said. “This achievement will be a first for Pogo and it takes dedication and hard work from every single employee to make sure we achieve it,” she said. The mine employs about 315 workers directly as well as another 150-plus contractor employees, Shaw said. At the Fort Knox gold mine near Fairbanks, Kinross Gold, the owner and operator, is on track for 2015 production at about the same level as 2014, according to spokeswoman Anna Atchison. The mine currently employs about 660, she said. Milestones for this year include the company’s purchase of two new 793F haul trucks in the first quarter of the year. Fort Knox is also investing in improvements of its ore process streams to include construction of a new process solution booster pump station, she said. “As part of our overall drive for further efficiencies and cost reductions in a tight gold price environment, we recently increased haul truck payloads by 7 percent and cut shift change times by an impressive 23 percent in the first quarter alone,” Atchison said. “At the Usibelli coal mine near Healy, production is down this year because of slipping export sales of coal, but sales of coal within Alaska, the bulk of it for power generation, remain strong. Total coal production for 2015 is expected be approximately 1.4 million tons for but it could still be a bit higher, Usibelli Coal Mine, Inc. spokeswoman Lorali Simon said. “We’re still working to do more export sales.” The domestic Alaska coal market appears stable at about 1 million tons per year but exports in 2015 may slip from about 600,000 tons in 2014 to 400,000 tons this year, she said. The strong U.S. dollar makes Alaska exports expensive and is hurting export sales, she said. Other factors include the opening of a new coal mine in Chile that is cutting in that market for Alaska and South Korea’s imposition of an import tax on coal for utilities in that nation. South Korea has been a traditional customer for Usibelli. The company employs about 115 full-time workers at its mine near Healy, Simon said. In a new development, a state administrative appeals officer has sided with the Department of Natural Resources in awarding Usibelli renewals on coal mining leases at the Wishbone Hill coal deposit near Palmer, which the company hopes to develop. Opponents of the mine may file a lawsuit, however. If Wishbone Hill is developed it would produce about 500,000 tons per year and employ 75 to 125 people.

What will exploration permit ruling mean for industry?

The mining industry is waiting for the Department of Natural Resources to chart a path forward after an Alaska Supreme Court ruling that could change permitting procedures and require public notice for exploration work. Two months after the ruling in the case over Pebble Limited Partnership exploration permits went against the State of Alaska, it is still unclear exactly what the state will do to respond. Alaska Miners Association Executive Director Deantha Crockett she’s hopeful some members of the industry will be able to assist DNR in moving from “temporary permits for temporary activity to permanent permits for temporary activity.” However, the detailed work has not yet taken place. The case focused on whether or not temporary state land-use permits for exploration of Pebble’s claims were truly functionally revocable at any time, as the state claimed. DNR typically issues five-year Miscellaneous Land Use Permits, or MLUPs, and Temporary Water Use Permits, or TWUPs, for mining exploration done on state land, as in the case of Pebble. The plaintiffs listed, the anti-Pebble group Nunamta Aulukestai, Ricky Delkittie, Sr., the late Violet Willson, Vic Fischer and Bella Hammond claimed DNR should allow for public comment prior to issuing these permits, because among other things, permanent damage is could be done to state land. Exploration impacts that constitute a permanent “disposal” of land are something Alaska residents should be able to weigh in on under the state constitution, they argued. Exploration drill, or bore, holes are usually filled with concrete or other impermeable cement-like mixtures to prevent movement of groundwater between layers of bedrock and subsequent possible contamination. Robert Retherford, president of the exploration and geology consulting firm Alaska Earth Sciences, said steel drill casing is sometimes left in the hole when it becomes stuck or is needed to prevent collapse. In those instances, cement is forced down the casing until it pushes up around the outside of the casing, sealing and entrapping it in a safe concrete environment. The Supreme Court found these “concrete pillars,” as it referred to them in its May 29 ruling, to be permanent structures, which in part made the exploration permits irrevocable. DNR argued that the common practice of filling boreholes is environmentally benign. It’s a long-time common practice in the mining industry. Retherford said defining old bore holes as permanent structures “creates a lot of fog and haze” around the permitting process. Executive director for the environmental advocacy law firm Trustees for Alaska Vicki Clark said in a release after the ruling that the state has “issued permits behind closed doors without even looking at the harm to public resources,” and the Supreme Court ruling will put an end to that practice. “This decision means that all Alaskans, especially those whose rights and livelihoods are jeopardized by intensive exploration activities like those at Pebble, have the constitutional right to participate in the decisions affecting them,” Clark said. The court also found the permits to be irrevocable for large exploration projects such as Pebble’s, which totaled more than $300 million, because DNR staff could be swayed to issue or protect permits when such large sums of money are at stake. The court did not determine a monetary threshold where that becomes the case. Retherford said the issue off permanent structures simply doesn’t make sense. “We’re concluding that the people making the regulations, in this case the Supreme Court, that they’ve had enough coaching or enough time to really understand how (the exploration process) works. It doesn’t seem like that in this case, so we’ll see,” Retherford said. When a borehole penetrates no aquifers, as is often the case in mountain drilling, putting the drill cuttings back would be an acceptable way to meet the new requirements if sealing a hole is unfeasible, he said. Changing current regulations to meet the Supreme Court’s view could make some exploration cost prohibitive, according to Retherford. He said he uses a ballpark figure of $150 per foot for exploration drilling when discussing cost with potential clients. “It’s not uncommon to see a million bucks go into a hole if you’re drilling say 3,000, 4,000, 5,000 feet” when preparatory work is included, he said. The Supreme Court decision overturned a Superior Court ruling that shot down the plaintiffs’ six claims for relief. Alaska Miners Association attorney Larry Albert noted that the court did not find evidence of actual environmental harm from the filled holes, but rather used potential harm as the basis for its ruling. He also said the Supreme Court did an “end run” on the Superior Court ruling and did not rule on the merits of the case. Rather, it determined the case to be moot because Pebble’s permits had expired and exploration had ceased, but decided to rule based on the need for a resolution that had implications in an associated case dealing with attorneys’ fees. Albert said that is a legitimate course of action; however, the court ended up ruling on what happened in Pebble’s case and not on what would likely happen in future cases, thus issuing a contradictory ruling. Crockett said the ruling should concern individuals on either side of the development debate — for or against — because it clouds a permitting process that should be built on science alone. “We need to have a permitting process that’s clear, that’s predictable, that we understand and that we have confidence in,” she said. Without a defined regulatory framework using the best available science, the confidence of the public and potential project investors is damaged, Crockett said. Rick Van Nieuwenhuyse, CEO of NovaCopper, which is exploring copper deposits in the Ambler Mining District along the Brooks Range, said his company has always found Alaska to be a good permitting environment to conduct work. NovaCopper’s $5 million summer season exploration and data gathering plan is one of the few significant mine exploration projects going on in the state this year. Van Nieuwenhuyse commended the work DNR and the Department of Environmental Conservation have done in the past and said he expects state regulations “to reflect what’s reasonable.” “What we do currently and what we’ll continue to do is meet the regulations,” Van Nieuwenhuyse said. Elwood Brehmer can be reached at [email protected]

Federal judge allows Pebble case against EPA to continue

Pebble Limited Partnership’s lawsuit against the Environmental Protection Agency will continue as a federal judge denied the agency’s motion to dismiss June 4. U.S. Alaska District Court Judge H. Russel Holland concluded that while the EPA may not have established the three “anti-mine” groups as described by Pebble in its complaint — the Anti-Mine Coalition, Scientists and Assessment Team — agency staff could have utilized them to draft the pending determination to block development of Pebble’s copper and gold claims near Bristol Bay. The mining organization’s attorneys argued during a May 28 hearing that the agency was in cahoots with area tribes and mine opposition groups for years prior to and during the Bristol Bay Watershed Assessment process. The exhaustive assessment, which found large-scale mining would irreparably harm the region’s robust salmon fisheries, is the basis for the EPA’s attempt to preemptively stop Pebble through its Clean Water Act Section 404(c) wetlands protection authority. Pebble’s primary argument centers on the claim that the EPA violated the Federal Advisory Committee Act, or FACA, which requires agencies to remain objective and follow strict public notice and open meetings guidelines on policy issues when taking input from interest groups. “We are convinced the EPA has pursued a biased process against our project that then drove their actions toward a predetermined outcome,” Pebble CEO Tom Collier said in a formal statement after the order. “Our fight with the EPA has been about a fair and transparent process for objectively evaluating a development plan for our project once we have presented it via the permitting process. In addition to this case, we are seeking documents to show the EPA’s lack of transparency and action under the Freedom Information Act.” He also said the group has commissioned an independent investigation into the EPA’s actions in regards to Pebble. The EPA Inspector General is in the midst of a review of the Bristol Bay Watershed Assessment that began more than a year ago. As far as the court case goes, Pebble will now seek to depose federal employees and members of third-party groups involved in drafting the assessment, Collier said. The agency claims that even if it unknowingly violated FACA, Pebble had ample opportunity to provide input during more than 30 meetings with EPA officials since 2003 — long before the assessment process officially began in 2011. The United Tribes of Bristol Bay and Trout Unlimited Alaska, two staunch opponent groups of the mine, issued statements saying Holland’s ruling doesn’t change the fact that the science behind the assessment proves Pebble would damage the region’s aquatic resources. “This case is simply another delay tactic from Pebble. The company’s complaints about the federal advisory process — a process Pebble itself participated in —in no way changes the scientific fact that this mine, in this place, will devastate our fishery, “ UTBB President Robert Heyano said in a June 4 release. “Today’s ruling was merely a preliminary step in a judicial process that isn’t over, and if further litigation is the price necessary to protect the Bristol Bay fishery and our traditional way of life, then it will be well worth it.” In November, Holland issued an injunction to halt all work on the 404(c) process until the court case is resolved. He dismissed with prejudice Pebble’s allegations that the EPA established the Anti-Mine Coalition and Anti-Mine Scientists groups in the latest order. Holland also dismissed with prejudice Pebble’s claim for injunctive relief. The EPA was also relieved from answering chunks of the amended Pebble complaint, which it claimed violated court procedure. “(Pebble’s) first amended complaint is lengthy and does contain irrelevant and redundant allegations and unnecessary factual details,” Holland wrote. “But rather than dismissing the first amended complaint, the court will excuse the defendants from answering” the sections that do not pertain to the FACA accusations. Holland called Pebble’s original, 138-page complaint, an “outrageous violation” of court procedural guidelines when issuing the November injunction. Also on May 28, a three-judge panel from the 9th Circuit Court of Appeals dismissed a previous lawsuit by Pebble — also heard and dismissed by Holland last September — that the EPA overstepped its authority by beginning the 404(c) process before a mine plan or permit applications were submitted. It was determined that case was not ripe for a ruling until the mine veto was finalized. Elwood Brehmer can be reached at [email protected]

Judge allows Pebble case against EPA to continue

Pebble Limited Partnership’s lawsuit against the Environmental Protection Agency will continue as a federal judge Thursday morning denied the agency’s motion to dismiss. U.S. Alaska District Court Judge H. Russel Holland concluded that while the EPA may not have established the three “anti-mine” groups as described by Pebble in its complaint — the Anti-Mine Coalition, Scientists and Assessment Team — agency staff could have utilized them to draft the pending determination to block development of Pebble’s copper and gold claims near Bristol Bay. The mining organization’s attorneys argued during a May 28 hearing that the agency was in cahoots with area tribes and mine opposition groups for years prior to and during the Bristol Bay Watershed Assessment process. The exhaustive assessment, which found large-scale mining would irreparably harm the region’s robust salmon fisheries, is the basis for the EPA’s attempt to preemptively stop Pebble through its Clean Water Act Section 404(c) wetlands protection authority. Pebble’s primary argument centers on the claim that the EPA violated the Federal Advisory Committee Act, or FACA, which requires agencies to remain objective and follow strict public notice and open meetings guidelines on policy issues when taking input from interest groups. The agency claims that even if it unknowingly violated FACA, Pebble had ample opportunity to provide input during more than 30 meetings with EPA officials since 2003 — long before the assessment process officially began in 2011. In November, Holland issued an injunction to prevent the EPA from finalizing the 404(c) process until the court case is resolved. He dismissed with prejudice Pebble’s allegations that the EPA established the Anti-Mine Coalition and Anti-Mine Scientists groups in the latest order. Holland also dismissed with prejudice Pebble’s claim for injunctive relief. The EPA was also relieved from answering chunks of the amended Pebble complaint, which it claimed violated court procedure. “(Pebble’s) first amended complaint is lengthy and does contain irrelevant and redundant allegations and unnecessary factual details,” Holland wrote. “But rather than dismissing the first amended complaint, the court will excuse the defendants from answering” the sections that do not pertain to the FACA accusations. Holland called Pebble’s original, 138-page complaint, an “outrageous violation” of court procedural guidelines when issuing the November injunction. Also on May 28, the federal a three-judge panel from the 9th Circuit Court of Appeals dismissed a previous lawsuit by Pebble — also heard and dismissed by Holland last September — that the EPA overstepped its authority by beginning the 404(c) process before a mine plan or permit applications were submitted. It was determined that case was not ripe for a ruling until the mine veto was finalized. Elwood Brehmer can be reached at [email protected]

Dismissal arguments heard in Pebble-EPA case

Pebble Limited Partnership and the Environmental Protection Agency argued in court May 28 whether the agency violated federal law in developing the Bristol Bay Watershed Assessment, which is the basis for its effort to block Pebble mine. The oral arguments on the EPA’s motion to dismiss Pebble’s lawsuit were heard in Alaska U.S. District Court by Judge H. Russel Holland. Justice Department attorney for the EPA Brad Rosenberg said the agency did not violate the Federal Advisory Committee Act as Pebble contends, because the EPA had the same type of contact with Pebble as it did with the groups and individuals Pebble claims it conspired with to stop mine development. The Federal Advisory Committee Act, or FACA, was enacted in 1972 to set guidelines for federal agencies and ensure committees they form are objective and open to the public. Pebble claims it was shut out of the assessment process, but it had regular contact with EPA staff at all levels beginning in 2003, Rosenberg argued. “Pebble had a role in creating the Bristol Bay Watershed Assessment,” he said. “If anything, Pebble had unprecedented access to the EPA.” Rosenberg said the EPA officials all they way up to the administrator met with Pebble about 30 times from 2003 to 2013. The mine developers simply disagree with the science in the assessment, according to Rosenberg. He said the FACA requirements are narrow and do not apply in this instance. In February 2014, shortly after releasing the final version of the 1,000-plus page Bristol Bay Watershed Assessment, the EPA announced it would begin the process to block development of Pebble’s gold and copper claims with its authority under Section 404(c) of the Clean Water Act. Coincidentally on May 28, a three-judge 9th Circuit Court of Appeals panel dismissed another Pebble lawsuit against the EPA claiming harm from the 404(c) mine veto. Holland initially dismissed that case last September because the agency hadn’t issued its final action, thus making Pebble’s argument not ripe for consideration, at least for the time being. The assessment concluded that large-scale surface mining in the Bristol Bay region would significantly impact the robust salmon and resident fisheries in the area. Pebble filed suit the suit argued May 28 before Holland in September 2014, alleging the assessment to be biased. Holland issued an injunction halting the 404(c) veto process in November to prevent the agency’s action from becoming final during the lawsuit. Pebble attorney Roger Yoerges argued that the EPA set up “de-facto” advisory committees based on contact the agency had with anti-mine groups, which is evidenced in the documents obtained from Freedom of Information Act requests Pebble has submitted to the EPA. “The government is saying a federal committee cannot exist unless they say it exists,” Yoerges said. In its complaint, Pebble attorneys claim the agency set up three informal advisory committees the mining company dubbed the “anti-mine coalition,” the “anti-mine scientists” and the “anti-mine assessment team.” Rosenberg countered that an agency can’t inadvertently set up an advisory committee. A formal advisory committee must be made up of a balanced panel of members and publish actions in the Federal Register. He also said the 2010 emails between anti-mine activists and then-EPA ecologist Phillip North that Pebble has touted as prime examples of the bias within the agency were to a “low-level” agency scientist and had little impact on the assessment, officially undertaken in 2011. Yoerges said the EPA attorneys were arguing the facts of the case appropriate for a summary judgment motion during a hearing for dismissal, and that further discovery would allow Pebble to flesh out its allegations, he said. “We suspect more discovery will show more documents in support of our view,” Yoerges said. In his rebuttal, Rosenberg called the advisory committees “nothing more than a figment of (the) plaintiff’s imagination.” He said everybody wanted the EPA to hear their respective views during and before the assessment process. Rosenberg noted that the EPA regional administrator could have initiated the 404(c) process in 2010 if the agency’s mind was made up at that time, but decided to do a detailed scientific assessment of the resource in question. He said the Bristol Bay Watershed Assessment is a final, standalone scientific document, separate from the pending 404(c) action. However, senior EPA officials have cited the assessment as the basis for starting the mine veto process. Finally, Rosenberg said Pebble would still have a chance to further voice its position on the 404(c) process if the injunction is lifted. When Holland issued the injunction halting the veto effort last November, he said the 404(c) process could result in “no action, but it isn’t headed that way.” Elwood Brehmer can be reached at [email protected]

Exploration payrolls down as producing mines add jobs

Minerals employment and industry spending dropped in 2014 compared with 2013 and 2012 but the decline is attributed mostly to sharp declines in expenditures for exploration. The state’s larger producing mines added jobs in all three years, according to the latest minerals industry economic report by McDowell Group. The report was recently released by the Alaska Miners Association. McDowell Group is a Juneau-based economic research firm.  The latest report shows 4,400 employed in mining in Alaska in total during 2014, down from 4,600 in 2013 and 4,800 in 2012. Payroll is also down, to $620 million in 2014 from $630 million in 2013 and $650 million in 2012. However, payments to local governments, in taxes and in-lieu-of-tax payments, rose in 2014 relative 2013, to $17.4 million paid in 2014 compared with $17 million in 2013. Payments to municipalities totaled $21 million in 2012. The totals include all jobs related to mining including exploration, metals and coal production activities and gravel mining. Counter to the overall trend, the state’s six larger producing mines have been adding jobs mostly due to increased production and new development work in the mines. For example, the Fort Knox gold mine near Fairbanks, a surface mine, employed 650 in 2014, up from 630 in 2013 and 548 in 2012. The Greens Creek Mine near Juneau, an underground multi-metals mine, employed 415 in 2014, 400 in 2013 and 390 in 2012; the Kensington Mine, an underground gold mine also near Juneau, employed 320 in 2014, 306 in 2013 and 300 in 2012; Pogo, another underground gold mine near Delta east of Fairbanks, employed 320 in both 2013 and 2014 (data for Pogo for 2012 was inconsistent in the McDowell reports); the Red Dog lead-zinc mine north of Kotzenue, a surface mine, employed 610 in 2014, 639 in 2013 and 604 in 2012. The Usibelli mine near Healy, Alaska’s only coal mine, employed 140 in both 2014 and 2013, and 124 in 2012. All of the state’s producing mines are doing well, but there has been a sharp drop in exploration spending over three years caused mainly by declines in metals prices, the recent weakening in China, a strong importer, and continued economic weakness in Japan and Europe. Exploration spending dropped to $67 million in 2014, down from $180 million in 2013 and $275 million in 2012, according to the McDowell report. Exploration spending is a barometer for the mineral industry’s future because it results in new discoveries, a few of which typically become producing mines. Mines tend to have long lives, typically several decades, once they get into production but eventually the ore is depleted and new projects need to be coming into the pipeline, which is a result of continued exploration. In terms of immediate impact, the falloff in exploration tends to affect a number of smaller support companies including air taxi firms, camp and logistics service operators and a variety of technical-support firms such as laboratories. Meanwhile, work is continuing on eight new mine development projects that are a result of discoveries made decades ago. Seven of these are far enough along in development planning that estimates of new jobs in production can be made. Those seven would add 3,615 permanent jobs if all are developed. These include: • The large Donlin Gold project near Crooked Creek, in the mid-Kuskokwim River region, which could employ as much as 1,400 production workers. Donlin Gold would be a large surface mine and it is now in an advanced stage of environmental impact statement work for its project after which a decision on construction could be made. • Pebble, near Iliamna southwest of Anchorage. Although it is snarled in controversy and attempts by the U.S. Environmental Protection Agency to foreclose development, the large Pebble gold/copper/molybdenum project could create 1,000 production jobs. It would be a surface mine initially and possib ly an underground mine in later years to tap deep mineral resources. Pebble has done extensive exploration and is at an advanced stage of engineering and mine planning. However, the company is seeking to resolve legal issues brought by the EPA’s attempt to foreclose mining before permits can be filed for development. Both Donlin Gold and Pebble are in two of the most economically-depressed regions of the state where jobs are badly needed. • Livengood gold project — North of Fairbanks, International Tower Hills is continuing development planning on the large Livengood gold project, a surface mine which could create 450 production jobs if it is developed. The company is now developing a new mine plan to reduce costs. • PacRim Coal, near Anchorage — The company is working on development of the Chuitna coal project on the west side of Cook Inlet, about 50 miles west of Anchorage. The project is now at an advanced stage of permitting. Chuitna would be a surface mine and it would create 300 to 350 production jobs if the mine is built. • Wishbone Hill — North of Palmer, in the Matanuska-Susitna Borough, Usibelli Mine Inc. is working on development of the Wishbone Hill coal deposit. If developed it would create 75 to 125 production jobs. • Niblack and Bokan Mountain — In southeast Alaska two new mining projects are in advanced stages of development planning on southern Prince of Wales Island, near Ketchikan. Niblack would be a multi-metals underground mine. If developed Niblack could create 200 production jobs. The second, Bokan Mountain, is a potential rare earths mine, also underground. If constructed it could employ 190. An eighth minerals development project, for which the McDowell Group report did not include potential jobs, is the Upper Kobuk Minerals Project, a joint-venture of NovaCopper Inc., an exploration company, and NANA Regional Corp., the regional Native development corporation in northwest Alaska, which is also a large landowner. This includes two projects, both significant copper discoveries, that are relatively near each other in the western Brooks Range, the Arctic deposit in the Ambler mining district and Bornite, on the upper Kobuk River. Both are in advanced stages of exploration and development plans have been done for Arctic. The region is remote, however, and surface infrastructure would have to be built to the area before mines could be developed. The State of Alaska is working on a plan for a minerals access road to the region from the Dalton Highway, which transects the central Brooks Range, but the project is on hold at the order of Gov. Bill Walker.

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