Mining and the environment: mines in Alaska face challenges due to environmental regulations.

• Author: Liles, Patricia
• Position: Alaska Business Monthly's 2005 Environmental Issue

Alaska's mining industry faces significant challenges while operating in the Last Frontier-locating mineral deposits in a vast, generally underexplored region with little infrastructure and harsh climatic conditions.

Working through property tenure issues offers another obstacle, with unfinished land conveyances from the federal government to the state and to Native entities providing uncertainty as to ownership of mineral deposits.

Finally, miners must comply with a myriad of governmental regulations enforced by multiple state and federal entities, designed to protect the environment. This facet of the mining industry--environmental regulation and its related legal battles--continues to "dog" the industry, according to the Alaska Minerals Commission's 2005 report to the Legislature.

"Environmental obstructionists continue to throw up hurdles despite genuine, cooperative project design and permitting work on industry's part," the group said in the report released in early January. The annual report complemented state government initiatives to assist the mining industry in 2004, but noted that permitting efficiency "still has room for improvement."

In particular, many permitting challenges come from the federal side, the commission noted, suggesting the state should encourage timely, responsive project review and permit issuance in cooperation with Alaska agencies.

POGO

One success noted in 2004--state and federal regulators completed a lengthy environmental review and permitting process for an underground gold mine near Delta Junction, called Pogo. The initial work plan was first submitted to regulators in August 2000, with the final water discharge permit issued by the Environmental Protection Agency in mid-March 2004.

The public review and regulatory approval process involved a total of 55 permits from five different state agencies and eight federal agencies, including a 1,000-plus-page Environmental Impact Statement, produced at a cost of more than $1 million to the developer, Teck Cominco.

Additionally, Teck Cominco spent $10 million for environmental baseline and permitting costs, $13 million for engineering and a feasibility study, and $14 million for an underground exploration program that provided valuable data for the permitting process, according to Karl Hanneman, Teck-Pogo's manager of public and environmental affairs and special projects. Those are just part of the company's $84 million spending at Pogo prior to receiving permits to construct.

"At each decision point ... the risk goes down as the spending goes up," Hanneman said. "Hopefully you are...