Pebble Partnership vs. the EPA — a yearlong conflict

The legal sparring between Pebble Limited Partnership and the Environmental Protection Agency drew headlines throughout the year.

It began right away Jan. 15 when the EPA released its Bristol Bay Watershed Assessment, a 1,000-page report three years in the making, which concluded that a large surface mine in the upper reaches of the Bristol Bay watershed would cause significant harm to the region’s dynamic salmon fisheries.

Pebble has maintained a stance that the assessment is a seriously flawed document based on biased science.

On Feb. 28, the EPA announced it would begin the process to invoke its Clean Water Act authority that allows it to veto large development projects that it deems would have unacceptable adverse consequences to fish and wildlife under Section 404(c) of the act.

It is the first time the EPA has used its Clean Water Act power so early in a project’s development; Pebble has not released a formal mine plan.

Former Sen. Mark Begich came out against Pebble soon after release of the assessment. Sen. Lisa Murkowski, Rep. Don Young and Sen. Dan Sullivan, who defeated Begich in the Nov. 4 election, all said they want the state and federal permitting processes to decide the fate of the mine.

Pebble proponents got a small victory in state court March 19 when the Lake and Peninsula Borough “Save Our Salmon” ordinance that required local approval of a large mine was ruled unconstitutional.

In May, Pebble sued the EPA claiming the agency overstepped its authority when it began the Clean Water Act process. The EPA Inspector General also initiated a preliminary review of the process used to draft the Bristol Bay Watershed Assessment. The lawsuit was dismissed — and appealed by Pebble — in September; the IG report is pending.

After a late summer round of public testimony hearings the EPA decided to move forward with its large mine veto.

Pebble gained a significant victory in court Nov. 24 when a federal judge ordered the EPA to stop its 404(c) process as a second suit against the agency plays out. The mining group is alleging that the EPA was drafting plans to kill the mine years before work on the assessment even began.

Alaska’s voters resoundingly passed a ballot measure in the Nov. 4 elections that would force large Bristol Bay mines such as Pebble to get legislative approval. Pebble board chair John Shively said the group did not campaign against Ballot Measure 4 because it is unconstitutional and will fail when challenged.

— Elwood Brehmer

Donlin gets Native corp. approval

Donlin Gold LLC got a boost for its mega-gold project June 8 when it officially reached an agreement with The Kuskokwim Corp. that gives the mining company surface access to corporation land.

Donlin Gold would use the land to access its claims if the $6 billion project moves forward.

Located along the upper Kuskokwim River in Western Alaska, the Donlin Creek mine would be the largest gold mine in the world if it is developed. Donlin holds claim to an estimated 34 million ounces of recoverable gold.

As it is currently proposed the project would stretch from the west side of Cook Inlet, where a 312-mile buried natural gas pipeline would be built to feed a large power plant at the mine. From the south and west barges up the Kuskokwim River would supply the mine with other materials.

In October, Donlin project owners Barrick Gold and NovaGold said the Donlin Creek environmental impact statement is about half done and a draft is on schedule for a 2015 release. Work began on the EIS in 2012.

The Alaska Department of Natural Resources held public comment meetings in fall as it reviewed Donlin’s pipeline right-of-way application.

— Elwood Brehmer

Pogo, Fort Knox eye expansion

Gold prices aren’t where gold miners hoped they would be in 2014 but two of Alaska’s largest producing mines in Interior Alaska, the Fort Knox and Pogo mines, are still doing well.

Fort Knox, a low-grade surface mine northeast of Fairbanks, was expected to produce about 390,000 ounces of gold in 2014. That’s down from 421,641 ounces in 2013, but it is enough to keep Fort Knox in the No. 1 spot among Alaska’s gold producers.

Fort Knox has been producing since 1996 using a mechanical ore-crushing and processing system as well as a heap leach chemical treatment process. The company is also exploring untested new ground near the mine, searching for additional resources.

The mine employs about 630, the vast majority living in Fairbanks and commuting to the mine; Fort Knox pays about $81 million in annual payroll.

Pogo, about 85 miles east of Fairbanks, was expected to produce about 330,000 ounces of gold in 2014, an amount similar to 2013. Pogo is an underground mine tapping gold ore in quartz veins from two zones, the “Leise,” which has supported the bulk of the ore production to date, and “East Deep,” an adjacent deposit that began contributing to production in 2013.

Additional gold resources are being found in adjacent deposits, which are still being explored. One is “North Zone,” and another is “South Zone.” Another nearby deposit, labeled the “4021 area,” has also been identified. Currently the mine has 4.97 million ounces of unproduced gold reserves, enough to operate until 2019, but the company is confident additional reserves will be added.

Pogo employs about 314 with an additional 80 contactor employees, which increases to about 180 in the summer. Pogo has an annual payroll of about $38.5 million.

— Tim Bradner

Greens Creek receives key permit

The Greens Creek Mine near Juneau had a good year in 2014, and the stage is set for Hecla Mining Co., the mine owner, to remain a major employer in the Southeast region for years to come.

Greens Creek received its U.S. Army Corps of Engineers permit late in 2014 for a long-planned expansion of the waste tailings storage facility, which will allow the mine to develop more resources and extend its operating life. The Corps issued a Section 404 permit under the Clean Water Act.

Greens Creek has operated for almost 25 years on a 27-square-mile land tract in the northern part of Admiralty Island, west of Juneau. The mine is within the Tongass National Forest.

Greens Creek is a multi-metals mine producing an ore containing mainly silver, but also zinc and gold. It is the largest silver mine in North America. Hecla Mining Co., the owner, expects to produce between 6.5 million and 7 million ounces of silver and about 55,000 ounces of gold from the mine in 2014.

As of early 2014 the mine’s proven and probable reserved were estimated at 92.5 million ounces of silver; 713,000 ounces of gold and 678,000 tons of zinc and 256,000 tons of lead.

Hecla is still exploring at Greens Creek, and new mineralized areas have been found that can be tapped using the mine’s current infrastructure. The mine employs about 400, most who live in the nearby Juneau community and commute daily to the mine by boat.

— Tim Bradner

Ambler ambles along

NovaCopper Resources and NANA Regional Corp. continued a long-range assessment of mineral resources in the Ambler Mining District and at Bornite, both in the western Brooks Range and northeast of Kotzebue. NovaCopper, a Canada-based “junior” exploration company, and NANA, the Alaska Native regional corporation based in Kotzebue, are in a joint-venture agreement to explore discoveries at Bornite, on the upper Kobuk River, and the Arctic Deposit, which is nearby and in the Ambler district.

NovaCopper has been managing a drilling and exploration program at both locations. There was no drilling in 2014 but NovaCopper undertook an evaluation of core tests drilled years ago by Kennecott Exploration, the original owner at Bornite, that were never fully tested.

Results of the analysis, released Oct. 28, showed significant contents of copper in five of 37 historic drill tests, with copper content ranging from 0.5 percent copper to 1.18 percent copper, with a “cutoff” grade of 0.5 percent.

NovaCopper and NANA have found significant grades of copper from its earlier drilling at Bornite as well as drilling at the Arctic deposit.

The Ambler and upper Kobuk River copper resources have been known and explored for decades. The first discovery at Bornite, by Kennecott, was in the 1960s.

The remote location of the discoveries has so far prevented development of a mine, but the state of Alaska is now engaged in permitting a 300-mile resource development road into the area from the Dalton Highway to the east. The Alaska Industrial Development and Export Authority, the state’s development corporation, is leading the access road initiative.

However, no road would actually be built by AIDEA until there is a commercial mine project, at Arctic, Bornite or at other nearby minerals discovery sites, that would pay for the road. Former Gov. Sean Parnell had $8 million in his capital budget to advance the road effort, but new Gov. Bill Walker removed that and all other capital spending that didn’t generate a federal match when he released his budget Dec. 15.

— Tim Bradner

09/24/2015 - 11:29am