Setback stings U.S. Borax.

AuthorKleeschulte, Chuck

One hundred million dollars just doesn't go as far as it used to. For Proof just ask officials ofU.S.BoraxCo.While it took a dozen years, the U.S. government spent just about a quarter of that amount to build the state's largest Public works project - the Alaska Railroad. But U.S. Borax has spent $100 million in seeking only the approval to build the world's largest molybdenum mine. As of this summer, the company is farther from its goal than ever.

Since 1974 - after three years of earlier exploration efforts - U.S. Borax has been actively attempting to clear the regulatory hurdles to build its $1 billion open-pit molybdenum mine at Quartz Hill, 45 miles east of Ketchikan. In December 1988 after surviving six years of debate over the Alaska National Interest Lands Conservation Act (ANILCA) - that could have, but didn't, place the claim off limits to mining - and eight years of additional planning work, Borax thought it had cleared its major hurdle. The high point came when all state and federal agencies signed off on the mine's final environmental impact statement (EIS), normally the key document in winning governmental approval for natural resource projects.

But this May the U.S. Environmental Protection Agency (EPA), reversing its key policy decision of two years earlier supporting marine tailings disposal in Smeaton Bay, announced it was proposing to deny the vital water-quality permit needed for the mine to dispose of its mountains of ore tailings underwater near Wilson Arm off Behm Canal. The decision, if confirmed by the agency this fall and then upheld following a nearly certain administrative appeal, would add an extra $58 million in construction costs and an additional $1.6 million a year in operating costs to the mine - making the mine's already questionable economics even more problematic.

But besides the cost and the chance that the alternative dumping site also will face legal challenge, state business leaders are arguing that the EPA policy reversal sets the precedent that no resource agency decision is ever final. That precedent could prove fatal to attracting firms to invest capital in expensive Alaska development projects.

"The result of the reversal of this decision, if it is upheld, is that all companies doing business in Alaska have to believe that no decision can ever be trusted,' says Steven Borell, executive director of the Alaska Miners Association.

Adds George Krusz, president of the Alaska State Chamber of Commerce,"As Alaskans, we pay lipservice to the need to diversify our economy, yet in the case of U.S. Borax we are sending messages to industry and to potential investors that the regulatory climate is too unpredictable for long-term business commitments."

Don Finney, U.S. Borax's Ketchikan manager, adds...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT