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Donlin gold mine brings hope of jobs -- and fear of destruction

Lisa DemerAlaska Dispatch News
Donlin Gold mine work camp and runway are seen from the air. The project is about 150 miles northeast of Bethel and 280 miles west of Anchorage. It’s currently accessible only by air. Lisa Demer / Alaska Dispatch News

DONLIN GOLD WORK CAMP -- On a remote ridge in the big, open space between Bethel and Anchorage, where the land and minerals are owned by Alaska Native corporations, developers want to cut deep into the earth to extract microscopic bits of gold.

The Donlin Gold project is moving quietly forward. Backers are seeking key government permissions and trying to secure the trust of local residents.

Developers say the mine’s design will be the safest, most stable possible. A wealth of good jobs would open up in the cash-starved Western Alaska region if Donlin is developed, project sponsors say.

Still, the nature of large-scale gold mining incites anxiety and doubt among people who depend on the land and water as their sources of food.

The mine site is 10 miles from the Kuskokwim River near a salmon-producing stream, Crooked Creek. The project would disturb rock and soils laden with arsenic, mercury and other heavy metals; use cyanide in the production of the gold; bring barges loaded with diesel and other supplies upriver daily in ice-free months; and create a 2-mile-long, 1-mile-wide open pit where the hilltop used to be.

It also would be the biggest economic development project in the Yukon-Kuskokwim Delta region. Donlin estimates the cost to build it at $6.7 billion, counting $1 billion for a natural gas pipeline.

Over an expected 27-year operating life, an estimated 34 million ounces of gold could be pulled out of rock crushed on site. That’s about one-third of the gold potential at the proposed Pebble mine, where immense reserves of copper are the primary target.

“It’s a $6.7 billion project because it’s state of the art. It’s the highest standards in just about every regard,” said Kurt Parkan, external affairs manager for Donlin Gold, the mine’s developer.

But residents who rely on unspoiled terrain and worry about already troubled salmon runs remain skeptical. They fear fuel spills, disruptions in streams and, ultimately, the risk of a big disaster like the Mount Polley tailings dam failure earlier this month in British Columbia.

“I wish I could say I trust the mine can be developed without impacting salmon/wildlife habitat, and the way we live in this region,” Bethel’s Bev Hoffman, one of the co-chairs of the Kuskokwim River Salmon Management Working Group, said in an email Friday. “I can’t.”

Another who has followed the mine for years is Grant Fairbanks of Bethel, who has a homestead near Sleetmute, about 50 miles from the project.

“In the short term, it will probably be safe,” Fairbanks said in an interview Friday. “In the long term, I don’t think it will be safe at all.”

Residents are right to remain vigilant, Parkan said. The project plan may change to address concerns, he said.

 

The project

The mine site sits about 280 miles west of Anchorage and 150 miles northeast of Bethel in a hilly area of winding streams, including salmon habitat. The project covers about 10,000 acres, not counting the land the pipeline would cross.

Operator Donlin Gold is owned equally by two Canada-based mining companies, Barrick Gold Corp., the world’s largest mining operator, and NovaGold Resources Inc., a new player. The land is owned by The Kuskokwim Corp., a for-profit corporation representing 10 villages, and Calista Corp., the Alaska Native corporation for the Yukon-Kuskokwim region. Calista, which has vowed to ensure the project is done safely, owns the mineral rights.

“We wouldn’t be supporting this program if we didn’t feel it was safe and responsible,” said Calista’s communications manager, Thom Leonard.

The project is in what’s called the Kuskokwim gold belt, and it has been in the study and exploration stage for almost 20 years. The Northern Miner, a trade publication, calls Donlin a “monster” prospect. Yet compared to the high-profile, controversial and now struggling Pebble prospect in Bristol Bay, many Alaskans know little of Donlin.

A skeleton crew is working with government agencies to secure key permits and is traveling to villages to keep residents informed. Community meetings are held in Yup’ik if that’s what residents want, and there’s a Yup’ik video on the project.

“Clearly, people need to be paying attention to the project,” Parkan said. “We don’t want to be hiding. We’re not trying to go undercover in the night. We want people to understand the project.”

In the region, Donlin is already a big presence, providing scholarships and job-training opportunities, educating the community on how to become a mining blaster or engineer, sponsoring the Iditarod and Kuskokwim 300 sled dog races, taking people on field trips to the site. Earlier this month, Donlin flew in a planeload of reporters and photographers for a tour.

The U.S. Army Corps of Engineers is the lead agency assessing the project. It is in the midst of preparing an environmental impact statement to analyze what Donlin has proposed and options that could lessen the potential harm. The Corps says it is considering “the project’s large geographic footprint.” It intends to have a draft environmental report out next year.

A chain of components, some unseen in the region, would have to be constructed:

• The 315-mile, 14-inch natural gas pipeline. It would bring 10 percent of Cook Inlet’s gas across the Alaska Range to fuel a new power plant at the Donlin site. The pipeline then could be extended to Bethel to bring natural gas to a region with extraordinary heating costs.
New barge terminal facilities in Bethel.
• A new 5-acre port on the Kuskokwim River near Angyaruaq, or Jungjuk, Creek, where river barges would be offloaded.
• A new 30-mile road from the upriver port to the mine site.
• A new 5,000-foot airstrip, since the existing runway is in the area to be mined.
A tank farm for about 40 million gallons of diesel fuel.

Then there’s the mine itself.  Rock would be blasted, then hauled in 400-ton-capacity, diesel-powered dump trucks, the biggest that exist. It would be crushed in a processing facility where cyanide would be used to dissolve the gold. Non-gold-bearing rock would be stored separately. While the gold is expensive and complex to extract, it’s high grade, Donlin says.

Finely ground waste material -- the tailings -- would be stored on site in a tailings pond built in a natural drainage area and sealed with a synthetic, non-permeable liner atop an area that’s largely bedrock, Donlin says. The rock dam holding back the tailings and wastewater would eventually rise more than 450 feet.

Over the last 10 years, about $350 million has been spent.

 

Toxic rock

At British Columbia’s Mount Polley mine, the tailings dam breached Aug. 4, sending what some fear is a toxic slurry into Polley Lake.

Donlin’s tailings dam will have a different, stronger design that is akin to what is used for water reservoirs, Parkan said. Rock will be piled into a pyramid shape, and unlike at Polley, tailings won’t be incorporated into the dam itself, he said. Donlin will be Alaska’s first mine to seal the tailings pond with a liner, which isn’t required, he said.

Critics say the mine may be well built but they are concerned about the risk of earthquakes and about what will happen 50 to 100 years from now when operations are done and Donlin has closed up shop.

“We are going to have a big, toxic pile of junk,” Fairbanks said.

Hoffman’s family owns a small business, Kuskokwim Wilderness Adventures, that takes people on charters, bird-watching tours and fishing.

“The recent events in British Columbia where tailings drained into the river as spawning salmon were moving up is enough of a wakeup call to all of us on this river,” Hoffman said. “I worry for our future and our way of life here.”

Because the mined rock at Donlin contains arsenic and mercury, any water that touches it would be treated to drinking water standards before it is discharged into the environment, according to Mary Sattler, Donlin Gold’s manager of community development and sustainability.

When the mine closes, the water in the tailings pond will be pumped into the open pit, then treated before being discharged. The dry tailings will be covered with rock, soil and vegetation, Parkan said.

“Our dam design is the most stable of all dam designs,” he said. “It is rock-filled. It is designed to hold water. It is as stable as they come.”

The environmental review could lead to changes, such as a pipeline for diesel fuel to avoid the risk with shipping it on river barges. Only when the review is complete will the project owners decide whether to move forward. That likely won’t be until 2016 or after.

 

Jobs for a cash-poor region

If Donlin becomes an operating mine, the payroll is expected to top $95 million a year, Parkan said.

The Yukon-Kuskokwim Health Corp., which runs the Bethel hospital and health services throughout the region, likely would remain the biggest employer but the mine would be next, with 3,000 jobs during construction and up to 1,400 jobs during operation, Parkan said.

As it is, poverty and unemployment rates in the region, with the exception of the hub of Bethel, are among the highest in the nation, according to the state Labor Department’s Alaska Economic Trends October 2013 report.

Donlin stresses that 90 percent of its employees during what was a busy exploration period were local hires: Calista and village corporation shareholders, spouses of shareholders and local residents. When introducing employees, Sattler mentions their home village -- Pilot Station, Nunapitchuk, Kalskag -- or where their spouses are from.

The Association of Village Council Presidents has passed resolutions in support of the project as a way to sustain the region and its culture -- support that is conditional to the protection of the natural world.

But the work isn’t spreading as far as some would like. Bethel Native Corp., the for-profit village corporation, has yet to win contracts on the project. BNC president and chief executive Ana Hoffman said her organization will keep a close eye on what Donlin brings to the region.

The Kuskokwim Native Association, the regional nonprofit association of 12 villages along the middle and upper Kuskokwim River, hasn’t taken a position.

Currently, Donlin’s work camp at the mine site is staffed by two 5-person crews that switch out every two weeks. Some crew members now live in Anchorage, Wasilla or Kenai when they are off duty. Others on what’s now a 34-person Donlin staff work in Bethel, Anchorage and Aniak.

During the recent tour, some talked about Donlin as being like family. Others mentioned the safety consciousness that pervades the work. All said they want the mine to happen.

Wassilie Kameroff, camp logistics director, has worked on the project since 1996, longer than anyone.

“It’s the biggest thing that’s happened in our region, and everyone’s excited,” he said.

Contact Lisa Demer at LDemer@adn.com or on