Highway damaged by mine

Posted: Wednesday, September 06, 2000

ESTER (AP) -- A 500-foot stretch of the Parks Highway near Fairbanks is showing deep cracks as the ground beneath it slumps toward a nearby abandoned gold mine.

The state expects the repairs will cost upwards of $9.5 million.

The state is monitoring the site with a video camera trained on the crack 24 hours a day in case the highway collapses, said Dave McCaleb, an engineer with the Alaska Department of Transportation.

At this point, taxpayers, not the mining company, are footing the repair bill because the company's insurance coverage is limited and an industry-funded account to reclaim mine sites has little money in it.

The damaged stretch of highway is near the town of Ester, about eight miles south of Fairbanks.

It is sloughing off into an open-pit placer mine dug by Yellow Eagle Mining Co. The Canadian company accidentally hit an aquifer last fall, draining the wells of five Ester homes, muddying the drinking water of two others, and causing nearby earth to start slumping into the pit, according to the Alaska Division of Mining, Land and Water.

Gaping holes several feet wide are eating away the bluff as it gradually sags downslope into the pit. As the bluff gives way, it's dragging the highway with it, state officials said.

The state has already spent about a half million dollars to patch the highway, but cracks up to 6 inches wide keep reappearing, McCaleb said.

The company referred questions to its attorney, Mike McConahy of Fairbanks, who declined to be interviewed.

The $9.5 million preliminary estimate of repairs excludes the cost of maintaining the stretch for the next two to three decades. At this point the state has no idea how much that will cost. Because the permafrost was disturbed, the state is looking at a long-term maintenance headache because of the freeze and thaw cycle involved with soil in the sub-Arctic, McCaleb said.

Yellow Eagle shut down its Ester operation last October shortly after hitting the aquifer and draining the wells. Since then, company officials have said Yellow Eagle is insolvent and owes at least $1 million to creditors.

While the state is paying the highway repair bills for now, it's planning to ''recoup those costs from the responsible parties,'' said Bob Loeffler, director of the Alaska Division of Mining, Land and Water.

State attorneys have not yet filed a lawsuit because Yellow Eagle hasn't disputed liability, said John Athens, an assistant attorney general in Fairbanks.

Even if the state were to win a lawsuit, its ability to collect would likely be limited. Yellow Eagle's insurance policy only covers $1 million in damages, Athens said.

Yellow Eagle contributed to a state fund used to repair damage from placer mining. But the pool, started in 1991, is worth only about a half million dollars, according to Loeffler.

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