Kensington mine plans on hold

Posted: Thursday, November 16, 2000

ANCHORAGE (AP) -- Plans to open the Kensington Gold Mine north of Juneau are being postponed due to a cool response from federal environmental regulators to a proposal to dump tailings into a headwater lake, a spokesman for the mining company said Wednesday.

Coeur Alaska Inc. might reconsider an earlier plan to simply dump the waste rock into Lynn Canal, said Rick Richins, a Coeur spokesman. But the federal Environmental Protection Agency also didn't like that idea.

Coeur's latest design for the mine includes creating a facility to dump tailings at the headwaters of Slate Creek, on the east side of Lions Head Mountain north of Berners Bay.

The plan is different from its 1992 proposal to deposit tailings on land, which regulators approved. Coeur scrubbed that idea last year when gold prices dropped dramatically, forcing the company to seek cheaper alternatives. Gold prices remain low, closing Wednesday at about $265 an ounce, compared with about $380 four years ago.

Last year, Coeur floated the idea of depositing the tailings into Lynn Canal. But area fishermen objected and the EPA declined to issue required exemptions to water pollution rules.

Under the Clean Water Act, Coeur would need to show that the new proposal to deposit tailings into a lake would ''represent the least environmentally damaging practicable alternative,'' an EPA official said in a Nov. 7 letter to the Idaho-based company.

''How are they going to demonstrate that it's not less damaging?'' said Bill Riley, a mining coordinator in the EPA's Office of Water in Seattle. ''We don't see it.''

The EPA encouraged Coeur to look for other options after they rejected the Lynn Canal idea, so the company presented the Slate Creek idea in February ''and they said that alternative looked promising,'' Richins said.

This latest response calling for ''the environmentally preferred alternative,'' he said, ''is causing us to go back and re-evaluate all the options, including the option of placement of tailings on the bottom of Lynn Canal.''

The EPA's apparent preference for a dry tailings deposit site isn't an option, Richins said. It would cost about $2.55 a ton for a land dump, he said, compared with 30 cents a ton to dump it underwater.

In addition, a dry tailings pile is subject to erosion and is visually obtrusive, he said.

The underwater alternative would mean converting a lake into a tailings waste treatment facility that would be converted back into a lake in about 10 years, after mining is done, Richins said.

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