Mine project getting to know the drill

Posted: Friday, May 28, 2004

Drill holes are being sunk in thousands of acres of land northwest of Iliamna where Northern Dynasty Minerals Ltd. hopes to build its Pebble mine project later this decade.

Four drilling rigs began core sampling in earnest earlier this month producing data the company will use to assess the region's general geology, its distribution of subsurface metals and underground water systems.

Northern Dynasty still is years away from mining in its proposed open-pit operation, but when the mine goes into production, the Canadian-based corporation hopes to extract 90,000 to 200,000 tons of gold, copper, molybdenum and silver ores daily for perhaps as long as 60 years.

In a press release issued earlier this month, Northern Dynasty officials said that "extensive work programs" designed to collect engineering, environmental and socioeconomic data had begun. The data, including what is revealed by the geological sampling, will be used to complete a Bankable Feasibility Study in 2005 and applications for permits that will be needed for construction, operation and eventual closure of the mining project.

More than 30 workers are operating from the project office at the Iliamna Airport, located 19 miles southeast of the deposit. Meanwhile, at the deposit site itself, the drilling operation is expected to sink more than 100 sampling holes. This ongoing preliminary work is being conducted under state exploration permits. The company said exploratory drilling also is planned for "new zones and unexplored targets" within the 55,000 acres owned by the mining company.

Some 19 consulting firms, including six home-based in Alaska, have been commissioned to work on aspects of the Pebble project, according to Northern Dynasty. Others have local offices or laboratories.

Under the terms of a memorandum of understanding, or MOU, Alaska has signed with Northern Dynasty, a state interagency review team has been appointed to facilitate the permitting process. The company said it plans to complete and submit applications for project approval in late 2005.

The review team includes 10 Alaska Department of Natural Resources experts in mining, project coordination, dam safety and engineering, hydrology and habitat biology, plus two water-quality experts from the Alaska Department of Environmental Conservation, and an attorney from the Alaska Department of Law.

Among its duties are reviewing the baseline data collection program and guiding the company through the various state and federal agency permit application processes.

Meanwhile, the Alaska Department of Transportation and Public Facilities is investigating potential port sights at Iniskin Bay and Iliamna Bay on Cook Inlet, which would be used to ship ores to foreign smelters, likely in India or other parts of Asia. A report on a preferred port site and road corridor is expected by July. The state also is expected to solicit responses soon from local utilities and others regarding options for delivering power to the project.

"The MOU formalizes the state's permitting team's involvement. They're all very good at this stuff," said Ed Fogels, project manager for DNR, adding that under the MOU, the mining company is required to reimburse the state every six months for the costs associated with the work on the project done by the state departments involved in the project.

Bob Shavelson, head of the Homer-based Cook Inlet Keeper, said he isn't entirely comfortable with the way the state is handling its responsibilities with regard to permitting. He sees a potential for conflicts of interest in the interagency review team approach.

Northern Dynasty, he said, is "a private entity paying the regulator to shepherd its permits and data through the regulatory process, which is almost certainly fraught with an inherent bias."

He noted that the state is spending perhaps millions of dollars to conduct port and road studies that likely will lead to subsequent development.

"My question is what happened to free market economics? Is it Alaska's role to spend tax dollars that could be spent on education and municipal revenue sharing to help a Canadian corporation profit off Alaska's public resources?" Shavelson said.

"Our mission is not to sit there and give them permits," Fogels said. "Our mission is to get the mine going in an environmentally sound way, and, if the mine goes, to ensure that water quality is protected, that air quality is protected, and that subsistence and fish and wildlife resources are protected."

These days, he said, new mining projects must be squeaky clean. The state is spending now, he added, to guide what it hopes will be a viable project that will provide long-term jobs for residents of Southcentral Alaska.

"It's kind of an investment," he said.

Bruce Jenkins, director of environment, permitting and socioeconomic planning for Northern Dynasty, said the company has embarked on a series of community meetings to explain the mining project to the public.

"We are finding a spread of opinions," he said. "We're getting a lot encouragement. I'd characterize it as cautious optimism."

People see the potential for significant benefits to the state and local economy, he said, but they also are aware of the potential for negative impacts.

"We are taking a very serious and responsible look at how to design and build a safe mine," Jenkins said. "After all, we are looking for a social license to be your neighbors for decades."

When the mine goes into production, some processing of the raw ore will occur at the mine site before the ore concentrate is shipped overseas. Ongoing studies will determine how the tailings from the mine will be handled. Those tailings a kind of sandy slurry will be pumped into a tailings pond, a large, enclosed depression built for the purpose. The company's intention, Jenkins said, is to create a lake clean enough to allow re-vegetation and fish stocking. Whether Northern Dynasty will be able to do that will be known in a few months.

"Come fall, we will have a better reading on tailings chemistry, and that will dictate the design," he said.

The pond must receive mine tailings for decades. Seepage collection ponds would be built around it and any captured material would be pumped back into the tailings pond, Jenkins said.

If the chemical analysis determines the company will not be able to create an environmentally clean pond 50 or 60 years from now, some kind of permanent water treatment facility will become "a distinct possibility," he said.

Other mining operations in Alaska are anticipated to have more or less permanent treatment facilities on site long after mining is concluded. Funds would be invested over the life of the mine to cover the cost of future water treatment, Jenkins said.

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