By Margaret Bauman
Alaska Journal of Commerce

Spokesmen for a Canada-based mine development firm embarked on a huge mining venture in Southwest Alaska said Jan. 16 they still have a long way to go to define their project.

“It's very much an exploration and development project,” said Sean Magee, vice president of public affairs for Northern Dynasty Mines Inc.

“I don't think you can judge this project until it's been defined,” he said. “We think the science exists to develop the resource safely. We are asking for a fair hearing.”

Magee told members of Commonwealth North in Anchorage that the mining company remains confident that it can design a project that will protect the environment and that it intends to apply for major operating permits sometime in 2008.

“We believe in responsible mineral development that will benefit the local population and minimize impact on the environment,” Magee said. More than 50 independent consulting firms have been involved in the project, doing everything from water quality to wetland surveys, to develop a baseline study for that mine, he said.

Were the mine developed, the mining company would still be spending hundreds of millions of dollars for annual expenditures and the state would reap millions of dollars in tax revenues, he said.

A public company based in Vancouver, British Columbia, Northern Dynasty has spent millions of dollars in the exploration phase and plans to spend millions more in 2007, company officials have said. Northern Dynasty is backed by Vancouver-based Hunter Dickinson Inc. and Galahad Gold PLC. Hunter Dickinson has eight active mine development projects in six countries, and operates the Gibraltar copper mine in central British Columbia. Principals of Galahad Gold are internationally known mining financiers based in London.

Northern Dynasty previously engaged in discussions with Homer Electric about the best way to bring power to the site of the proposed mine, but at this point, “we are still caught in the same position as everybody else,” said Rick Ekert, manager for business development for Homer Electric.

Ekert said in an interview Jan. 22 that since Northern Dynasty identified prospects in the eastern zone of their exploration area “they really don't know what kind of a project they will be developing, so they can't tell us how much power they will need.”

The presentation by Northern Dynasty was the third forum given the controversial mining project by Commonwealth North, a citizens group dedicated to educating its members and others on significant public policy issues affecting Alaska.

The proposed mine would be one of the largest copper, gold and molybdenum mines in the world, with a two-mile wide footprint. Northern Dynasty officials are proposing a large open-pit and underground mine, plus two large earthen dams on the North and South forks of the Koktuli River at the headwaters of the Bristol Bay watershed.

Because the site sits at the headwaters of two major Bristol Bay drainages, many fear it could potentially pollute the watershed and damage or destroy major commercial, sport and subsistence fisheries. Previous presentations to Commonwealth North were made by opponents of the mine and state officials, who were invited to explain how mines were permitted and regulated.

Some commercial fishermen, squeezed by higher costs of doing business and lower prices for fish, have said if the mine were developed without harming the environment they would be satisfied.

Opponents of the massive project argue that the mine stands to destroy pristine wilderness and a watershed renown for its rich fisheries, which many families in the Bristol Bay region have depended on for generations for their subsistence lifestyle. Many vividly recall the Exxon Valdez disaster in Prince William Sound, which had a devastating affect on fisheries, some of which never recovered.

A number of groups and individuals have voiced continued concern about the potential impact of such a mine on commercial, sport and subsistence fisheries, including the potential for acid mine drainage. Northern Dynasty officials have said that even though there is a low percentage of sulfides in the ore, there will be no acid drainage.

Patrick Flatley, outreach coordinator for the Bristol Bay Alliance, disagreed.

“It's the amount of material that they plan on processing that has sulfides in it; that's much more important than the percentage of sulfides in the ore,” said Flatley who attended the Commonwealth North luncheon.

“The sulfide contained in the ore is one thing when left in the rock undisturbed, but when they blast the rocks and turn them into granulated powder, it exposes so much more of the acid-generating product to air and water, which ultimately creates sulfuric acid.

“They plan on building one earthen containment dam 4 1/2 miles long and up to 750 feet high, out of waste rock. They are claiming they can separate the waste rock with the sulfides in it from the waste rock that doesn't, so as to not exposure the waste rock with the sulfides in it to air and water. We don't think it is possible to do it safe enough,” Flatley said.

“Then when the melting snow or rain crosses the waste rock that has been disposed, it is going to cause acid mine drainage, and acid mine drainage runs downhill, into the headwaters of the Bristol Bay watershed, where the world's largest sockeye salmon run spawn,” he said.

“It doesn't make sense to go after so much nonrenewable natural resource while putting so much renewable natural resource at risk,” he said.

Northern Dynasty spent close to $35 million in 2005 alone to explore and delineate the deposit. The company's 2005 geological program totaled more than 75,000 feet of drilling in 42 holes. Assay results from six drill holes in the Pebble East deposit indicated a major new porphyry system with a substantial volume of copper-gold-molybdenum mineralized materials, according to company officials.

“Everything we are doing is seeking to avoid impact, “ Magee said. “If there are impacts on fish, we will have to mitigate and compensate.”

But fishermen fear that any mitigation and compensation would be too little, too late. In November, 37 sport fishing industry leaders, including Scott Fly Rods, Orvis and the American Fly Fishing Trade Association, asked then Alaska Governor-elect Sarah Palin, the Alaska Department of Natural Resources and the federal Bureau of Land Management to stop development of the Pebble project.

In January, mine opponents asked the jewelry industry nationally to commit itself to boycott gold from the Pebble project. The request came in a full-page advertisement in the January issue of National Jeweler, an industry news publication. Jewelers of America Inc., in a quick response to the ad, issued a statement Jan. 5, stating its support of responsible mining.

Margaret Bauman can be reached at margie.bauman@alaskajournal.com.