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9TH CIRCUIT CRIES FOUL

Will temporary dam cost Coeur’s Kensington gold project its freshwater tailings disposal?

The US 9th Circuit Court of Appeal has ruled against Coeur d’Alene Mines’ tailings disposal plans for the Kensington gold project in Alaska.

Author: Dorothy Kosich
Posted: Monday , 19 Mar 2007

RENO, NV -

A perceived end run by Coeur d'Alene Mines and the U.S. Army Corps of Engineers against a federal court injunction may have cost Coeur Alaska the ability to dispose of the Kensington gold into a nearby freshwater lake.

In a news release, Coeur's President and CEO Dennis Wheeler declared, "We are surprised and disappointed in the Court's announcement and what it might mean for the over 400 Kensington workers and the economy of Southeast Alaska." In a news release, Wheeler also insisted "we are simply at a loss to explain the basis for the Court's decision."

What the release didn't mention, however, is that Coeur's actions to construct a temporary tailings dam--which 9^th Circuit Court of Appeals judges asserted deliberately ignored a court injunction halting any tailings facility construction pending their ruling--may have exacerbated Kensington's tailing disposal woes.

A three-judge 9^th Circuit Appeals court panel--which included a Nevada senior judge who was a partner in a law firm which represented mining clients--announced last week that they intend to rule that Coeur d'Alene's Kensington Alaska gold project tailings plan violates the federal Clean Water Act.

The environmental NGO the Southeast Alaska Conservation Council (SEACC) appealed a lower Alaskan federal court decision to grant summary judgment in favor of the Corps and the U.S. Forest Service to allow the discharge of 210,000 gallons of slurry (including 1,444 tons of mine tailings) per day from the Kensington Gold Mine into Lower Slate Lake, a 23-acre lake in the Tongass National Forest in southeast Alaska.

In Thursday's appeals court decision, the U.S. Army Corps of Engineers had sought an emergency injunction to permit construction of the Western Interceptor Ditch at Kensington, which the appeals court denied. In their ruling, the judges, who also included Senior Judge Walter Tashima of California and Circuit Judge Susan Graber of Oregon, scolded Coeur for building a temporary coffer dam, knowing that a federal appeal was pending against the freshwater lake tailings disposal plan. Coeur now believes that the Alaskan weather may impact the integrity of the coffer dam.

While the San Francisco-based 9th Circuit is notorious for being a liberal appeals court, Senior Judge Proctor Hug, Jr., who participated in the ruling against Coeur, was formerly a partner in a law firm Woodburn, Wedge, Blakey, Folsom & Hug, which has represented a number of major North American mining clients.

"Now the Corps seeks this court's authorization of a plan involving the construction of a diversion ditch known as the Western Interceptor Ditch (WID)," the judges wrote, adding that "Coeur Alaska's ditch plan violates both the letter and the spirit of the injunction. That injunction prohibits the Corp, the Forest Service, and Coeur Alaska from ‘authorizing, allowing, or conducting any further construction activities relating to the use of Lower Slate Lake as a disposal site for mine tailings."

"In approving Coeur Alaska's ditch plan, the Corps has disregarded the purpose of the original injunction, which was to prevent further environmental degradation of the site pending the outcome of this appeal," according to the ruling. The judges said Coeur's original plan to use a coffer dam to not breach the spring freshnet was less environmentally harmful than "the current plan of clearing a swath of trees around the lake, digging a large ditch, installing a liner, constructing a service road, and filling in wetlands."

The judges accused Coeur of fashioning "a remedy that that furthers its intention of disposing of tailings in Lower Slake Lake." The angry panel also announced that it intended to "reverse the district court, vacate the permits and the Record of Decision authorizing the use of Lower Slake Lake as a disposal facility, and remand to the district court with instructions to enter a summary judgment in favor of SEACC.

"Because we intend to reverse and vacate the ROD and permits, all construction-related activities furthering the implementation of Coeur Alaska's plan of disposing tailings into Lower Slate Lake should cease and not be undertaken," the judges ruled. "Coeur Alaska and the Corps have the responsibility to address the integrity and/or removal of the temporary coffer dam itself."

In a news release, Russell Health, Executive Director of SEACC, said the Crops chose to use Kensington "as a test case to reverse decades of settled law and return to the days when mines dumped their tailings in clean lakes, rivers and streams."

The Kensington case is also viewed as a test case for the much larger and more controversial Pebble mine project near Bristol Bay.

Wheeler noted that the "plaintiffs expressed the hope of working with Coeur on possible solutions to this issue. Separate and apart from any possible appeal of the court order, we intend to take them up on that offer."

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