The court's ruling, one of the last of its term, resolves a lawsuit that the Southeast Alaska Conservation Council, Lynn Canal Conservation and the Juneau Group of the Sierra Club brought in 2006. Both sides say it sets a precedent - one hailed by the mining industry but deplored by environmentalists.

It gives a green light to final construction for the Kensington gold mine, a project that has been in the works for two decades but on hold since mid-2007.

It's expected to support 200 workers once fully operational. In recent months the company has maintained a core staff of about 40 at the mine, working mostly on maintenance.

Juneau District Ranger Pete Griffin of the U.S. Forest Service, the lead agency on federal permits for Kensington, said he was unsure about when Kensington would get its permits. The Supreme Court sent the case back to the district court to reinstate the permits.

"Obviously, we're very pleased with the decision," said Tony Ebersole, spokesman for parent company Coeur d'Alene Mines Corp.

The plan

Coeur's plan was to place 4.5 million tons of tailings into Lower Slate Lake. The plan would raise the lake's bottom 50 feet, increasing its footprint to 60 acres from 23, and kill all the fish in the waters. Coeur plans to restock the lake when mining is completed.

Coeur plans to treat water runoff from the lake, which heads into Slate Creek and down to Berners Bay.

The U.S. Army Corps of Engineers called the tailings fill, and said Coeur's plan was the least environmentally damaging option, and gave the company a permit. The U.S. Environmental Protection Agency disagreed, saying the lake disposal wasn't the best option but didn't object.

Environmentalists sued. They said the EPA's own regulations prohibited any discharge into a water body, and that turning a lake into a tailings pond was contrary to the Clean Water Act of 1972. They lost in district court but won on appeal in the 9th U.S. Circuit Court of Appeals in 2007.

Coeur has been on hold since. In 2008, the company both appealed to the high court and applied for an onshore tailings storage alternative plan, which was more costly but which environmental groups approved. But weeks before the federal agencies expected to approve that plan, Coeur backed out and rolled the dice on an appeal to the U.S. Supreme Court.

Tailings vs. discharge

The question at hand: Should federal agencies consider tailings, the ground-up waste rock that's left after the ore is removed, to be "fill" in the lake or "waste" from the mine? If it's fill, the Corps is in charge. If it's waste, as SEACC unsuccessfully argued, the U.S. Environmental Protection Agency's 1982 standards apply.

The EPA standards are set for "froth-flotation" mills like Coeur's, in which the mining company mixes ground-up rock with a detergent to make the gold float so it can be skimmed off. The EPA standard is "zero discharge" from mines, which means tailings couldn't go into Slate Lake.

Writing for the majority, Justice Anthony Kennedy said both the Clean Water Act and the regulations the agencies have written are ambiguous on what kind of permit Coeur should have. The Court should defer, Kennedy wrote, to the agencies' interpretation of their own regulations.

He specifically referred to a 2004 memo in which an EPA official said it was OK to apply the EPA standard to the water coming out of the lake, instead of the water going into it.

Dissenting Justice Ruth Bader Ginsburg said, however, the Clean Water Act was unambiguous. She quoted its writers: "'The use of any river, lake, stream or ocean as a waste treatment system,' the Act's drafters stated, 'is unacceptable.'"

Justices David Souter and John Paul Stevens joined her in the minority. Justices Clarence Thomas, Samuel Alito and Chief Justice John Roberts backed Kennedy. Anthonin Scalia and Stephen Breyer wrote their own concurring opinions.

Lower Slate Lake's future

Justices on both sides also assessed Lower Slate Lake's fate if it were filled with tailings, but characterized the outcome differently.

Kennedy's opinion describes the lake as having "a small population of common fish," and states that Coeur planned to restore Lower Slate Lake as a larger, more productive lake after the mine shut down.

Ginsburg said that "it is undisputed that the discharge would kill all of the lake's fish and nearly all of its other aquatic life" and it was "uncertain" whether life would return in the restoration.

The precedent

While the mining company plans to gear up at Kensington, SEACC plans to keep fighting in other realms. A bill in Congress with 151 cosponsors, the Clean Water Protection Act, redefines "fill" to exclude mining waste. The Obama administration could also change the rule.

Whether those approaches would affect Kensington itself is unclear, SEACC's Rob Cadmus said.

"Our priorities at this point in time are to make sure this doesn't set a national precedent that other mines can use," he said.

Kensington is the first mine in a generation that will be allowed to transform a lake into a tailings pond, he said.

About a decade ago, Canada allowed a mine to do just that. The government said it would be a rare exception. However, after the decision other mines lined up to do the same.

Cadmus sees an ominous example in Canada's mines. On this side of the border, "It could very well affect the Pebble mine" in Southwest Alaska's Bristol Bay area, he said.

Pebble project owner Northern Dynasty at one point proposed putting tailings in the nearby Frying Pan Pond before gold was found underneath it, Cadmus said.

Industry supporters agreed the precedent was profound, but were happy about it. They said it clarified rules for an industry already overburdened by regulations.

"The court rejected environmentalist arguments that could have the effect of crippling the mining industry," said Pacific Legal Foundation lawyer Brandon Middleton in a statement.

Politicians applaud

Alaska politicians praised the Supreme Court's decision in their statements, though they differed in tone.

Republican Rep. Don Young was the only one to take a direct shot at environmentalists.

"The groups that sought to stop this project were sadly willing to kill an entire industry, taking with it countless jobs," he said. "I respectfully suggest that these career protesters turn in their picket signs and find themselves some honest work just like the people they are trying to hurt have done."

Gov. Sarah Palin's statement talked about the state's support of Coeur and said the ruling was "a green light for responsible resource development."

"We truly appreciate Coeur's tenacity in pursuing the project and its dedication to hiring Alaskans to work at the mine," she said.

Democratic Sen. Mark Begich said this:

"This is particularly important given the current economic downturn in Southeast Alaska. I expect Coeur will honor their commitments to train and employ Alaskans while developing this resource in a responsible manner. The hundreds of jobs this project is likely to create will be welcome at just the right time."

Journal reporter Tim Bradner contributed to this article.