Teck proceeds with development at Red Dog

Red Dog mine has shelved its tentative plans to shut down its operations — for now.

Mine operator Teck Alaska Inc. will start to develop a new lead-zinc ore deposit at the Red Dog mine in Northwest Alaska that it needed to keep the mine in production after this year, the company said May 20 in a press release.

The project will proceed as issues over permits for the new Aqqaluk deposit are resolved by the company and the U.S. Environmental Protection Agency, Teck said.

Environmental groups and groups from two villages in the region filed appeals over provisions of a federal wastewater discharge permit the EPA issued earlier this year. EPA then withdrew certain limits on discharges in the new permit and said it will work toward issuing an updated permit once procedural issues raised in the appeals are resolved.

Without that permit, Teck said it could not continue operating through the end of the year, and developed a plan to shut down the operation.

At issue were the discharge limits of total dissolved solids, or TDS. A lawsuit was filed because the mine exceeded TDS limits set out in a 1998 EPA discharge permit.

The company cannot technically meet lower TDS limits in the 1998 permit, but can meet a 1,500 parts-per-million TDS limit agreed to by plaintiffs in a later settlement, which also correspond to the limit for dissolved solids which were proposed in the new 2010 permit.

EPA is not a party to the current settlement. In its press release, Teck said the agreement was filed in federal court and is with the San Francisco-based Center for Race, Poverty and the Environment representing Kivalina IRA Council.

As far as the EPA is concerned, Teck is still bound by the higher discharge permit from 1998, according to Ed Kowalski, EPA's region 10 director of compliance enforcement.

The permit contains a TDS limit of one-third above the natural background, or the natural levels of dissolved solids in streamwater. Teck cannot discharge its wastewater and meet that limit, mine officials said.

"The settlement has no effect on us," said Kowalski. "The settlement was entered into by private parties who sought to enforce the 1998 permit limits, and it doesn't effect the legal requirements set out in the 1998 permit. They do have the legal right to open the new pit and produce. The question is whether they will comply with the limit. We'll have to monitor the situation and act accordingly."

The settlement agreement does include the company's agreement to work on a 57-mile pipeline to carry wastewater discharges from the mine to the Chukchi Sea as an alternative to releasing the discharges in Red Dog Creek, the current procedure.

Teck currently is doing work on the pipeline, but would need to continue discharges into Red Dog Creek until it is completed.

A second group filing an appeal on the 2010 permit, Trustees for Alaska representing groups in Point Hope and a Fairbanks environmental group, were not a party to the settlement and do not support the pipeline alternative.

Trustees prefers that Teck switch to a better technology for managing discharges, said Carl Johnson, staff attorney for the environmental law firm.

Meanwhile, Teck has decided to forge ahead and not wait until final resolution of the appeals.

"Our discussions with EPA have been constructive, and after carefully considering the environment, our employees and local communities, we are proceeding with Aqqaluk," said Mike Agg, senior vice president for Teck's zinc division. "We will continue to maintain a water discharge that is protective of water quality and the environment."

Teck's decision was received warmly by NANA Regional Corp., which owns the land and mineral rights where the mine is located. The mine is a major employer of people in local villages and NANA shareholders.

"We are excited to move forward with this next phase at Red Dog," Marie Greene, NANA's president and CEO, said in a written statement. "NANA and Teck have worked very hard to ensure that the social, cultural, environmental and economic benefits of the Red Dog mine remain in place for our people and our region."

Trustees for Alaska said it is pleased at Teck's decision as well, because the uncertainty over whether work can begin on the new pit was troubling for Northwest Alaska villagers.

"We feel this will clarify things so that we can continue discussions with Teck regarding improvements to the discharge technology," Johnson said.

Teck needs to be able to begin mining at the Aqqaluk deposit in 2011 because ore reserves in the existing pit at the mine will have been exhausted.

The company is anxious to get preparation under way this year, which involves removal of overburden and limited road construction, so mining can start late this year.

Teck's initial task this summer will be to install a stormwater drainage control system before removal of overburden begins, according to Jim Kulas, environmental manager at the mine.

The amount of overburden at Aqqaquk is relatively small, in the tens of feet, so it is not a major operation.

"We want to be in a position to start mining at Aqqaluk later this year, before the main pit is exhausted, so we can blend the two ore streams in the mill," Kulas said.

That will allow a smooth transition in the mill from processing ore from Red Dog's main pit to processing ore from Aqqaluk, which is of a slightly lower quality, he said.

Teck does not plan any major modifications to the mill to handle the new ore, however.

Red Dog is one of the world's largest lead and zinc mines, producing more than 1 million tons a year of lead-zinc concentrate. Mining takes place year-round at the mine with the concentrates moved by road to a port on the Chukchi Sea, where they are stored and shipped by sea in summer when the sea is clear of ice.

The Alaska Industrial Development and Export Authority built the Red Dog road and port in 1988 and 1989. Teck pays AIDEA for the use of the facilities, which the state corporation still owns.

For more information: Alaska Journal of Commerce