State grants permit to Usibelli in disputed Wishbone Hill mine project

WASILLA -- After four years of trying, Usibelli Coal Mine Inc. finally has the state surface mining permit it needs to start work at the Wishbone Hill mine near Palmer.

Opponents of the project had argued the mine needed a new permit rather than what the Healy-based coal company sought: renewal of a permit originally issued to another company in 1991.

Back then, Wishbone Hill was proposed in a sparsely populated area about 8 miles from Palmer and 5 miles from Sutton. Now nearly 900 people, mostly in the Buffalo Mine and Soapstone road areas, live within a half mile of potential mining activities.

But the Alaska Department of Natural Resources found the old permit still applies, with added conditions like noise limits and fish protections during blasting.

The department's Division of Mining, Land and Water on Oct. 3 issued a final decision to give Usibelli a five-year renewal of the 23-year-old permit that's already been renewed three times.

The public has until Nov. 3 to request an administrative hearing on the division's permit renewal decision.

Usibelli will wait to see if any appeals are filed, weigh the state's permit conditions and gauge overseas markets before deciding whether the operation is warranted, a spokesperson said Monday.

"We're very excited about getting to this point," Rob Brown, Usibelli's vice president for business development said Monday. "It's been a long road to get to this point."

Numerous groups in the Matanuska Valley fought the renewal, saying the original permit expired in 1996 after a prior operator didn't start mining within a required time period.

Mine opponents point out they aren't the only ones who questioned the renewal: The federal Office of Surface Mining and Reclamation in late 2011 sent the state notice of a preliminary finding that Usibelli's decades-old permit was no longer valid.

That agency is expected to make a final decision soon, said Jamey Duhamel, program director for the 400-member, Chickaloon-based Castle Mountain Coalition, a nonprofit anti-coal group. A ruling that the permit is invalid could start the whole process over.

"It's just unfortunate that the state, knowing that decision is imminent, chooses to move forward a permit that was developed in the 80s," Duhamel said Monday.

State mining division officials said this week they had expected to hear from the Office of Surface Mining by now. The agency under the umbrella of the U.S. Department of Interior could rescind part of the state's coal program, but only through a lengthy and complicated process.

The state made it clear to OSM that a renewal decision was pending, said Russell Kirkham, the state's coal regulatory program manager.

"We still think it's a valid permit," Kirkham said Monday. "Unless we hear otherwise we're going forward. And we've not heard anything from OSM."

The federal agency hopes to respond "very soon" with a decision, acting Western Region Director Ervin Barchenger said Tuesday. OSM had hoped to issue something sooner, Barchenger said, but higher-level officials at the Interior Department got involved, slowing the process.

It's possible that OSM could change its initial decision on the permit. But if it finds the permit is invalid, the state can appeal that decision before the next step in the process, a field inspection of the permit files.

Usibelli, in a statement released when the renewal was announced, said the company acquired Wishbone Hill leases and the mining permit in 1997, "and like the companies before them have actively maintained the leases and permits."

Wishbone Hill is estimated to hold some 14 million tons of coal reserves in a relatively small coalfield 2 miles wide and 8 miles long. The bituminous coal is of a higher quality than that mined for decades at Usibelli's longstanding Healy operation.

Usibelli has operated coal mines in Healy, near Denali National Park, since 1943, producing roughly 2 million tons of coal annually, according to the company. About half the production goes to six Alaska coal-fired power plants, the other half to customers in Chile, South Korea and Japan.

A 2011 feasibility study the company cites was based on producing 500,000 tons of coal annually at Wishbone Hill to be loaded on approximately 12 semi-tractor trailers that would make three nightly round-trips each to Port MacKenzie.

Usibelli's plans call for a coal-washing plant and 5-ton-per-hour rock crusher, along with space for piles of stored coal and an unlined slurry pond above the Matanuska River for ash or other material washed off the coal. The Wishbone access road starts across the Glenn Highway from the Chickaloon Village school.

The state is ordering Usibelli to put up a more than $7.9 million reclamation bond before it starts the next phase of mining.

The mining division also placed a number of other conditions on the Usibelli permit. Among them: surface and groundwater quality monitoring; noise and light restrictions; and blasting limits to safeguard fish in Moose Creek from sudden pressure spikes in the water.

Moose Creek, just west of the proposed mining area, is home to a more than $1 million salmon restoration project conducted by the Chickaloon Village Traditional Council and various agencies. All five Alaska species of salmon populate the creek, some spawning all the way up to the Talkeetna Mountains.

The state mining permit drew 1,588 letters, emails and phone comments during a 2011 comment period. Most came from private citizens. A petition with 2,600 names opposing the mine came in, as did another one with 609 signatures in favor.

The potential threat posed by windborne coal dust and other hazards was "one of the big reasons" Bonnie Zirkle opted to sell her Moose Wallow cabins and move to New Mexico with her husband, diagnosed last year with muscular dystrophy after he survived cancer linked to long-term coal exposure during his West Virginia upbringing.

Moose Wallow was featured over the weekend in an episode of "Living Alaska" on the Home & Garden Television network. A couple from New Hampshire bought the place.

Yes, Zirkle said, the buyers know about the proposed coal mine.

"They said it wasn't a problem. A lot of people say that if people don't understand some of the health effects," she said. "If you take any time to study what's happening in West Virginia, it's insane to reopen and (renew a) permit in an area that's become such a huge residential area. It's surrounded by homes," Zirkle said.

State officials say the renewal decision was not a given. The mining division butted heads with Usibelli over some conditions, according to the permit renewal document.

Usibelli first filed a request to renew the permit in May 2011. By August 2012, the state was requesting more information on fish studies on Buffalo and Moose creeks and a requirement to install more wells to detect any changes to water quality during mining.

The company balked, saying the areas hadn't been mined yet and the potential delays during well construction "will be detrimental to their ability to secure a coal contract," according to the 14-page renewal decision. The state pushed back, asking for detailed plans showing installed wells and monitoring.

Usibelli in February of this year submitted a plan agreeing to start monitoring water quality at least six months before mining starts.

"We got what we wanted in terms of the location of the wells and what we're sampling for," Kirkham said.

Brown called the eventual monitoring deal a compromise.

"In our opinion it was more appropriate to start the process after the permit was renewed as long as we agreed not to mine if we did what they were looking for," he said. "It seems like a fair thing for Usibelli and the state."

But Duhamel, with the Castle Mountain group, said the state's conditions don't go far enough.

"We still have concerns even with the stipulations ... how this coal mine is going to play out so close to people," she said.

Contact Zaz Hollander at

Zaz Hollander

Longtime ADN reporter Zaz Hollander is based in the Mat-Su and is currently focused on coverage of the coronavirus in Alaska. She also covers the Mat-Su region, aviation and general assignments. Contact her at