Pebble Mine developers face mountain of logistical issues

Posted: Wednesday, May 11, 2005

Carving riches out of a remote Alaska wilderness may be the dream of distant wealthy investors with bullion in their eyes, but any returns are still a long way off.

The logistics of access and supply and the responsibility of protecting a sensitive environment require a slow, deliberate and costly process toward mine development, an official with Northern Dynasty Mines Inc. told a large Homer Chamber of Commerce audience Tuesday.

A team of more than 30 environmental consulting firms, many from Alaska, are working in the field attempting to draw a detailed geological and environmental portrait of the Pebble Mine site in preparation for a full-blown feasibility study to be completed late this year or early next, said Elle Ede, the environmental project manager for Northern Dynasty Mines Inc., the Alaska subsidiary of the Canada-based Northern Dynasty Minerals Ltd.

Those studies are covering everything from the weather overhead to the water on and below ground, and the wildlife that ecosystem supports. Such baseline knowledge will be needed when and if the mine project actually begins.

"There will be no end to environmental monitoring," Ede said.

Northern Dynasty's $35 million operating budget for 2005 includes $18 million for environmental studies. Part of that environmental assessment includes surveying wetlands that cover much of the proposed mine and tailings site.

"We did 100,000 acres last year alone," Ede said.

That included 1,800 field plots and 4,500 photos, all of which will go into digital mapping, a project that will take the rest of this year to complete, she said.

Of great concern to many residents in the mine district is the possible impact on fish-bearing streams. A lot of the baseline data being collected, Ede said, will be needed to assess mining's impacts to those streams.

"Lots and lots of fish studies; there is significant fish habitat in this area," she said. "One thing the company likes to share is that although it is not a mandate in Alaska for projects to have a 'no-net-loss' policy, it is the policy in British Columbia, the company's home. We are making the same commitment to the state of Alaska."

Asked how that would play out as the mine project proceeds, Ede said the no-net-loss policy doesn't imply there would be no impact. When fish habitat is destroyed, the company would enhance habitat elsewhere, so that the net effect to fisheries would be no fewer fish.

Listeners had questions about the jobs the mine might produce and who would get them. Copies of a publication on mining careers were available at the luncheon. It's foreword notes that even at the early stages, the Pebble project has led to "a substantial amount" of Alaska employment. In 2004, some 70 jobs went to residents of villages near the mine site, according to one slide presented during Ede's talk.

Most jobs, however, will be created when construction and operation of the mine are underway, she said. Earlier estimates suggested perhaps as many as 2,000 full-time jobs.

Ede also said that to the company the term "local hire" means regional hire employment from within the general mining district near Lake Iliamna. On the other hand, "Alaska hire," she said, is defined as someone here long enough to have gained eligibility for a Permanent Fund dividend check, or about a year.

Homer business owner Mako Haggerty asked where mine workers would live and whether Northern Dynasty was studying the impact those workers might have on the communities they live in.

"We are studying the socioeconomic impacts," she said. "We haven't decided yet if the workers would be housed at a remote camp at the site or whether they would live in the communities. We are asking the communities what they'd prefer. Right now we are assessing a remote camp to be conservative. Some communities might want the economic development and would welcome them."

Ede said that exactly what impacts will be felt on the Kenai Peninsula is still an unknown.

Ede discussed the current development timeline, a moving map of future actions all interdependent to some degree. For instance, permit applications may be ready by midway through 2006, though those will depend on the feasibility study and whether the bottom line favors proceeding with construction. A study of a proposed road project linking the site to Cook Inlet is under way, and could result in construction around 2008.

Mine construction might begin in 2008, with operations beginning in 2010 or 2011 if, Ede said, permitting runs smoothly.

In the meantime, this year the environmental and engineering studies will continue, she said.

Homer Mayor Jim Hornaday asked how the company was addressing former Gov. Jay Hammond's four-criteria test: That it be environmentally sound, have broad public support, pay for itself, and that it meet the constitutional mandate to benefit Alaskans.

Ede said, "I know those by heart."

She said the company was working to meet environmental challenges, engaging in public outreach, and the like. As to meeting the constitutional mandate such as the mine contributing to the Permanent Fund that would be up to the state, she said.

Mining, as an Alaskan industry, contributes a minuscule fraction of what comes out of the oil industry for the Permanent Fund.

If the mine proceeds, she noted, the ore would most likely be shipped overseas for processing, probably to Asia. There are not enough smelters in the U.S. to handle the output, she said.

Continuing the company's ongoing public outreach program, Ede was expected to address the Anchor Point Chamber on Tuesday night, and was scheduled to be in the Central Kenai Peninsula on Wednesday.

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