Ladd lease voted down

Posted: Thursday, March 05, 2009

After a brief executive session Tuesday, the Kenai Peninsula Borough Assembly unanimously voted down a five-year extension of the option to lease Ladd Landing between the borough and PacRim Coal, LLP.

"I don't see a benefit in any more extensions," said Kenai Assemblyman Gary Knopp. He said the assembly is no closer today to signing a contract than they were a year ago.

"I think it's time to either do it or don't do it," said Assembly Vice President Pete Sprague. Sprague said in the more than 10 years he's served on the assembly he hasn't heard anything that warrants an extension of the option to lease.

Before the executive session, Assemblyman Ron Long, of Seward, proposed amending the ordinance to bring the extension down from five years to one year.

"I would like to offer a one-year opportunity to salvage what we can from this process," he said. "I would like to keep some options on the table for us and not all of them for PacRim."

After the executive session, both the amendment and the ordinance were voted down.

Called the Chuitna Coal Project, PacRim is exploring a future strip mine coal operation in the Beluga Coal Fields on the west side of upper Cook Inlet. The company has a state lease on more than 20,000 acres of land northwest of Tyonek estimated to contain one billion tons of ultra-low sulfur, sub-bituminous coal.

PacRim hopes to mine that deposit over the course of several decades, beginning with a 5,000-acre section that could produce 12 million metric tons a year for 25 years.

Most of the coal would likely be shipped overseas from a dock facility to be built at Ladd Landing.

The borough first entered a lease-option contract in 1987 with Tidewater Services Corp., which merged with Midgard Energy Co. in 1994. The option has since been assigned to PacRim Coal.

Over the years, the option on the lease has been extended and amended five times, most recently in April 2008.

The assembly postponed action on the ordinance at the previous two meetings.

Carey said Monday that PacRim told him they plan to exercise their lease option. Carey did not have an official letter from PacRim stating their intent to exercise the option as of Wednesday afternoon.

"Until I have something in writing, nothing is definite," Carey told the Clarion Monday.

Joe Lucas, vice president of PacRim, said though the company has not yet made an official statement concerning their intention to exercise the option to lease, they will make a decision prior to April 9, the expiration date of the option.

"We won't really be making a formal statement until we go ahead and make that decision," Lucas said.

Mike Nesper can be reached at

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