The Alaska Contractor - Summer 2008

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$95 million on the property and plan to spend about $140 million this year. At current metal prices, the publicly released resource estimates at Pebble show that the deposit contains about $450 billion worth of copper, gold and molybdenum. Pebble’s developers, Northern Dynasty Minerals and Anglo American, are investing substantial time and money into preparing an environmental baseline document, expected to be finalized in the first quarter of 2009. That document “…will be used to evaluate various mine design alternatives prior to the submission of a proposed development plan for permitting,” said Northern Dynasty, in an April 2008 news release. “Once begun, permitting for the Pebble Project will proceed under a rigorous and transparent process set out under the National Environmental Policy Act, including the completion of an Environmental Impact Statement (EIS).” Those plans to seek federal and state regulatory approval for Pebble would likely be nixed, should the ballot initiative be passed by state voters and implemented as proposed. The initiative applies the new water and waste handling rules to “large scale metallic mineral mining operations,” which are defined in size by an operation that exceeds 640 acres of land, according to the proposals. That size calculation includes all components of a mining project, including the actual mine site, processing facilities, ore treatment facilities and waste storage; support facilities to include roads, transmission lines, pipelines and separation facilities; treatment plants or equipment connected with the project and any tunneling, shaft-sinking, quarrying or rock excavation for other purposes, such as construction of water or roadway tunnels, drains or underground sites for housing industrial plants. In 2007, Alaska had six large-scale operating mines contributing to the state’s mining industry value – of which most would surpass the 640acre size criteria included in the proposed new rules. Mining industry advocates say the proposed rules could end up including some placer gold mine operations, specifically by the initiatives’ language that includes mine support and ancillary facilities and transportation access routes that, in remote areas, can include airfields and roads linking the mine to the airfield. The remaining initiative includes sections that state the new rules would not apply to existing large-scale metallic mining operations that have received all required federal, state and local permits before the new regulations become effective. It includes an additional phrase saying it would not apply to “future operations of existing facilities at those sites.” But large-scale mine operations covered by the proposed new rules typically expand and update operational plans and seek revised regulatory approvals throughout the mine life as the operation advances. “The problem is, a mine never has all the permits to operate throughout the mine life,” said Lorna Shaw, executive director of the Council of Alaska Producers, a mining industry advocate organization. “A mine doesn’t open, knowing it will be around for 50 years. Exploration is a continuous process. A mining company finds enough ore to build a mine, then continues exploration to continue the mine…different opportunities present themselves in different stages of the mine life.” Until recently, Shaw worked fulltime at Alaska’s largest gold mine, Fort Knox, located about 20 miles northeast of Fairbanks. The open-pit, hard rock mine and mill complex, producing gold since 1996, has already surpassed its original end-of-mine-life projection of eight years, through discovery of additional ore in the existing mine pit and from satellite deposit sources nearby. Just last year, Fort Knox received state and federal regulatory approvals to add a new, lower-cost processing facility to the mine’s existing operation. Construction of a valley heap leach began in late 2007, a new facility which will allow Fort Knox to extract gold from rock that formerly was considered waste, because the amount of mineralization was so low that it could not be economically processed through the existing mill. Combined with a 500- to 600-foot pit expansion to the west, called Phase 7, the new heap leach will add about seven more years of operational life
to the Fort Knox mine. Kinross Gold, owner and operator of Fort Knox, plans to spend about $270 million on the two expansion projects. Even with the grandfather clause added in the ballot initiative III, it “…really does limit what mines would be able to do,” Shaw said. “An existing mine could finish out its life as it exists today, but would not be able to extend the life. “All of the mines in Alaska are concerned,” she said. “They all have exploration programs and are hoping to extend the mine life, but this would limit interest that mine companies have in our state.” The first proposed initiative was struck down in February by Superior Court Judge Douglas L. Blankenship, who ruled that the ballot initiative was unconstitutional because it usurps the Alaska Legislature’s duty of allocating state resources. “Initiative law in Alaska requires that the Legislature retain discretion to allocate public assets such as water to all uses, including large-scale metallic mining, and not just to salmon and downstream communities,” Judge Douglas L. Blankenship wrote. Blankenship also said in his decision that banning the water use to large-scale mining “changes the function of water from mining use to only human or fish use and foils the Legislature’s role as the sole appropriator under the Alaska Constitution.” The second initiative, the Alaska Clean Water Initiative III, which contains more generalized prohibitions regarding water and waste handling at mine operations, was allowed to proceed to the state election ballot by Blankenship. That decision, as well as his order striking down the first initiative, was appealed to the state Supreme Court. “It’s important to get certainty and finality on these significant water and mining issues,” said Lt. Gov. Sean Parnell, in a prepared statement following Judge Blankenship’s ruling. “Though the decision will likely be appealed, it brings us one step closer to an Alaska Supreme Court decision on whether the initiative is the proper route for deciding these issues or whether that is the Legislature’s exclusive domain.” The lieutenant governor rules on the validity of ballot initiatives and last year, Parnell initially rejected the first
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8005 Schoon St. Anchorage, AK 99518
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HOMER WATER TREATMENT PLANT PROJECT
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PRESIDENT’S MESSAGE New issues fa
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Associated General Contractors of A
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Behavior-based safety and the const
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Page 21 and 22: 55, Ken says he has worked for the
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Page 34 and 35: AGC of Alaska forms Construction Ed
Page 36 and 37: Construction Career Day introduces
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Page 49 and 50: A tourist walks along Fifth Avenue
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Page 57 and 58: misrepresentations on to the engine
Page 59 and 60: Past projects Other major past proj
Page 61 and 62: for the project. Coeur asked regula
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Page 65 and 66: “The Sutton job was a big overlay
Page 67: whether the second measure should b
Page 71 and 72: water ballot initiative. Parnell la
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Page 81 and 82: The blasting crew from Advanced Bla
Page 83 and 84: “My partner and I are fans of art
Page 86: The Politics of Construction Vote
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Page 91 and 92: continued Anchorage Museum Expansio
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The Alaska Contractor - Summer 2008

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