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Three years ago, a Fairbanks-based environmental group appealed a water discharge permit issued by federal regulators to Teck Cominco, developer of the Pogo gold mine in Interior Alaska.
The environmental challenge came a month after the permit had been issued and contractors had started work at the remote underground mine and mill complex, located about 40 miles northeast of Delta Junction.
In the following weeks, state and federal regulators met with representatives from the environmental group and the developers, and eventually hammered out an agreement in which the environmental group would retract its appeal, the developer would add some additional monitoring and construction work could resume.
The quick response by regulators and a timely resolution of the permitting issue was touted in Alaska's mining industry for months afterwards, held up as a graphic example of how the state is "open to mining."
Yet it appears that this tactic--environmental action groups appealing regulatory permits after the environmental review process is completed--has become the norm for Alaska's large mine projects.
Both the Rock Creek gold mine near Nome and the Kensington gold mine near Juneau faced a similar situation in their development.
State and federal regulators issued permits, allowing developers to start the large-scale construction projects, each well over $100 million. In both cases, environmental groups appealed federal permits regarding wetlands, causing the U.S. Army Corps of Engineers to withdraw its previously awarded approval of the project plans.
The Rock Creek project has since received its wetlands permit back, allowing the project to be completed. But as of late September, developers of the Kensington underground mine are still working to find resolution to the permitting problem that involves disposal of tailings in a nearby lake. The tailings disposal plan was previously approved by federal regulators before the appeal and subsequent lawsuit.
Construction of the mine and mill facilities continued and in late spring, the Ninth Circuit Court of Appeals, based in San Francisco, overturned a lower court decision upholding the permit validity.
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"The company is continuing to review its options, including engaging the environmental organizations' plaintiffs, and hopes to find a solution to the tailings facility at Kensington so it may proceed with production," the company said in a July statement.
Other options include possible appeals to a 15-judge panel of the Ninth Circuit and the Supreme Court of the United States.
Kensington is expected to produce 150,000 ounces of gold per year at an estimated cash cost of $310 per ounce of gold, with an expected mine life of 10 to 15 years. Contractors completed the main access tunnel for the underground workings and the surface facility structures this summer.
The environmental movement seems to be gaining momentum with these actions, and recently has increased its objections and financial investments to fight mining, aimed in particular at the Pebble copper-gold-molybdenum project in Southwest Alaska.
At least a year and possibly more away from starting the permitting process, Pebble developers have faced an onslaught of opposition in recent months. Those efforts range from frequent airings of television commercials to lawsuits filed against the state over road access studies to concerted attempts to change state law in order to block the development.
Critics of the project appear to be working to keep Pebble from reaching the environmental review and permitting stage, while its developer, Northern Dynasty Minerals, and its new partner, AngloAmerican, are publicly asking for Alaskans to give the regulators a chance to complete the legal process.
COMMISSIONER: 'INDUSTRY TARGETED' BY ANTI-DEVELOPMENT
"Anyone willing to connect the dots can see that our resource industry is being targeted by multiple efforts to deprive developers of the tools they need to operate in Alaska," said Tom Irwin, commissioner of the Alaska Department of Natural Resources, in an editorial published in late July.
He listed six recent "anti-development efforts" in his editorial. Those include the Kensington and Rock Creek lawsuits and a statewide ballot initiative asking voters to deny water use by large mines in Southwest Alaska, which would impact Pebble and other future mine developments on state and Native-owned land in the region.
Irwin also cited recent municipal initiatives that would restrict development, including a proposed ban on cyanide transportation inside the Bethel borough and the Denali Borough's prohibition on coalbed methane exploration. He noted that state legislators earlier this year introduced several bills that would obstruct or ban mining, one blocking resource development projects from using any water that runs into Bristol Bay and another that would create a new 7.7 million acre wildlife refuge, blocking Pebble development.
And finally, Irwin cited a measure introduced to the state Board of Fish that would create a fish refuge in the drainages near Pebble.
"What these and other efforts have in common is a goal of subverting the full, fair, public process established in our Constitution and in state law to allow lawful development of our natural resources in a responsible manner," Irwin wrote. "These efforts to short-circuit the permitting process carry a significant risk by depriving communities of the opportunity to diversify their economies, generate local revenue and provide high-wage jobs in remote areas."
The risks are especially significant to Native regional and village corporations, which look to resource development on their lands for shareholder jobs, joint-venture opportunities and revenue, he added.
Alaska already has in place a "world-class system" for permitting and development of natural resources, demonstrating that development can and is being accomplished with the highest concern for the environment, Irwin said.
"The state's laws balance potential economic and social benefits of developing non-renewable mineral resources with the potential risks to the region's renewable resources," he said.
The state must assure international industries and financial markets that the process works, that it accommodates Alaskans' concerns and that the "system cannot be ignored because some individuals do not like a potential outcome of the process."
DNR will increase its outreach efforts in the resource development permitting process, Irwin said, including holding a series of workshops around the state designed to educate participants about Alaska's environmental laws and regulations, as well as the permitting process.
INDUSTRY RESPONSE TO OPPOSITION
The recent increase in environmental action against mining projects also is being noticed by industry.
"The permitting woes are a serious downer ... the ability for any party to thwart economic development for the price of a stamp makes me despair for my kids' future," said Curt Freeman, a consulting geologist based in Fairbanks.
Freeman's company, Avalon Development, lost two exploration programs worth about $500,000 of budgeted work during the spring of 2004 during the Pogo permitting conflict.
Current increases in metals prices seem to be overriding the damping effect of the recent environmental challenges in Alaska's mining industry, with a boom in exploration across the state.
"Companies are willing to take a little more political risk ... if metal prices dropped off, so would the interest," Freeman said. "There are cow patties in everyone's pasture, they just take different shapes. The Congo is a good place to look for metals, but it's in the middle of a war zone."
Yet if mine developers can't produce gold or other metals, exploration will be more likely to eventually shift to a region where mining will be permitted by government regulators and supported by the court system.
"When you're challenged in court, how do you plan for that sort of risk? You can't plan for that," Freeman said. "Actually, there would probably be more interest here if there was not that sort of uncertainty."
The post-permitting legal challenges were "very surprising" and frustrating for Rick Van Nieuwenhuyse, president and CEO of NovaGold, developer of the Rock Creek project located near Nome.
A small group of local citizens and an Anchorage-based environmental group appealed the wetlands permit in November that was originally issued by the Corps in late August.
In December, the Corps withdrew its permit to re-evaluate their procedures and, after a three-month process, eventually reinstated the original permit, allowing work to continue.
The two groups then filed a lawsuit against the Corps for issuing the permit. In June, a U.S. District Court judge denied their request for a temporary restraining order and injunction against the project and ruled that the wetlands permit was valid and followed guidelines under the Clean Water Act.
The protest and lawsuits came from people who "did not express concerns during the public comment period or during the public process," Van Nieuwenhuyse said. "It was very discouraging to have a very open and interactive process, then for individuals and a group who did not participate, to challenge the permit afterward."
Van Nieuwenhuyse, who grew up in Eagle River and Anchorage and worked in the forestry and fishing industries before completing his geology degree, still believes that "... Alaska is a good place to do business" for his company, despite the post-permitting issue.
"Any company doing business here has to realize this is a pristine environment," he said. "There are specific issues, such as relating to subsistence by the Native people, and fisheries in Alaska, that are part of the economic base for rural areas.
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