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Golden opportunity or toxic risk? Southwest Alaska debates Donlin mine

  • Author: Lisa Demer
  • Updated: May 31, 2016
  • Published February 6, 2016

BETHEL — In Southwest Alaska, you can't turn around without running into the name Donlin Gold. It's on fish-cutting aprons and life jackets, basketball tournaments and sled dog races, calendars and baseball caps. The company helps villages put on festivals and search and rescue groups do their jobs.

Now, after investing a fortune in community causes, Donlin Gold's good name as a benefactor is bumping up against the enormity of what it proposes: a giant mine on a remote Southwest Alaska ridge.

The project is at a pivotal point, with government agencies and their contractors evaluating the risks and benefits under the umbrella of an environmental impact statement. Public meetings in the region and Anchorage for people to learn about the project and leave their comments began last month.

Donlin mine at a glance

The 5,500-page draft environmental impact statement — with a glossary that goes from "acid generation potential" to "zero discharge"— analyzes Donlin's proposal as well as alternatives including no mine at all.

The EIS finds the mine would bring risks but calculates the chance of a catastrophe like a large diesel fuel spill or release of cyanide or mercury would be very low.

The draft review was released in late November by the Army Corps of Engineers and isn't scheduled to be finished until 2017. The process, required under one of the nation's earliest environmental protection laws, informs agencies deciding whether to give approvals. The Corps is using a contractor, AECOM, for the study, which Donlin is paying for. The review must be complete before Donlin can secure some 100 major permits. Comments are being taken through April 30.

Now that the reality of the project is sinking in, questions are swirling. Fears as well as hopes are boiling up.

The mine site is 10 miles from the Kuskokwim River, a significant source of salmon and other fish for people in dozens of villages. A spill at the mine could find its way downhill into the river.

Keith Gordon, Donlin project manager for the Corps, tells residents their voices are needed, especially ideas that could improve the project.

"We don't live here. We are not experts in this. I am not a hard-rock miner," Gordon said in Bethel on Monday.

Sixty-six villages and tribal groups could be impacted by the project, including upriver villages such as Sleetmute, downriver hubs including Aniak and Bethel, and even coastal and Yukon River villages that could feel the economic ripple.

The chance for good jobs, which Donlin said would average $100,000 a year, has drawn support, as has Donlin's reputation, even before it has produced its first bar of gold.

Last month in Anchorage, some who spoke praised Donlin as an able steward capable of building the mine right. Deanna Crockett, executive director of the Alaska Miners Association, said Donlin is going "above and beyond environmental standards" including using a liner under tailings, the mix of processed, ground ore.

But at a Bethel meeting Monday that began with a prayer in Yup'ik, caution could be heard in the voices from the Kuskokwim River hub.

"Our land and our lives are dependent on this river," Nikki Hoffman, a 25-year-old member of the Bethel City Council and the Bethel tribe, said at the meeting. "It's a short-term gratification with a significant long-term risk."

During her allowed minutes at the microphone, Hoffman hurried through a list of worries and risks from birth defects to earthquakes, from fires to failure of the containment lining. She was among a number who asked the Corps to extend the public comment period beyond its scheduled end on April 30.

"How will our people survive if there are no consumable, available resources left?" she asked.

Pipeline, barges and mine

The complex project can be broken into three main parts: a 315-mile natural gas pipeline from Cook Inlet, transportation impacts including a tripling of barge traffic on the Kuskokwim River, and the massive mine itself. Its footprint, not counting the pipeline, covers 10,000 acres, about 25 times the size of Anchorage's downtown business district.

The mine, as proposed, would operate over 27 years with 800 to 1,400 workers producing 1.3 million ounces of gold a year, putting it among the world's biggest gold mines, though it would be much smaller than the more contentious Pebble mine. It also would produce 17 tons of mercury as a hazardous byproduct that would be barged away on the Kuskokwim in special drums and flasks.

Donlin says the design is compact for a mine of this scale and uses the latest and safest methods.

So far, the mine developer has spent $480 million on exploration and studies. It expects to spend a total of $6.7 billion to build the project over three to four years with a construction workforce of 3,000. It promises local hires.

Where some see opportunity others see unjustified risk. Its gold bars would be shipped to China and India and "used to make jewelry and bling," critic Grant Fairbanks contended at the hearing in Bethel Monday. Donlin says buyers depend on the market and gold has many industrial uses, including in electronics like iPhones.

The mine site is leased from The Kuskokwim Corp., a for-profit corporation for 10 villages, and Calista Corp., the regional Native corporation for the Yukon-Kuskokwim Delta. Calista owns the mineral rights. Profits would be shared with other Native corporations.

Donlin added the $1 billion natural gas pipeline to its project plan after hearing concerns from Kuskokwim residents early on about the amount of diesel fuel that must be barged on the river.

With the pipeline, Donlin says it will need about 40 million gallons of diesel per year, mainly to fuel its massive 400-ton capacity trucks. Without the pipeline, it would have needed triple that. Now natural gas will generate the electricity that powers the rock-crushing machinery and the mine camp.

Still, Donlin expects 122 diesel and cargo barge round-trips each summer season on the Kuskokwim, on top of normal river barge traffic numbering about 68 trips. Even that understates the impact, the Corps' Gordon said. Each trip could involve a train of as many as four barges pushed by a tugboat to a new dock on a stretch of river that sees almost no traffic, he said.

Under another option, Donlin is considering a switch to trucks powered by cleaner liquefied natural gas depending on the results of tests in British Columbia, according to Donlin spokesman Kurt Parkan.

Maybe, Bethel resident Eric Whitney told the Corps, LNG then could power nearby villages too.

Connections

Donlin's reach is extensive in the Y-K Delta and beyond. It's a major sponsor of the Iditarod Trail Sled Dog Race and the Iron Dog snowmachine race.

Leaders of both organizations praised Donlin to the Corps, as did the head of a nonprofit education organization, EXCEL Alaska, which Donlin also supports with money and direct help.

"I see it as them wanting to be part of events that are important to Alaskans," Stan Hooley, chief executive of the Iditarod Trail Committee, said in an interview.

The natural gas pipeline would mainly be buried. Its route comes close to the Iditarod Trail in places, and would overlap for about 4 miles, Hooley said. Donlin worked with the Iditarod to minimize conflicts, he said.

In the Y-K Delta, Donlin spends hundreds of thousands of dollars a year on community investment, plus more for education, according to the company's Parkan. It has bought Yup'ik dictionaries for schools and fuel for a women's shelter. During spring cleanup, it provides dozens of villages with kids' bikes for prizes. Parkan said the amounts are relatively small given that Donlin isn't in production and isn't making money but wouldn't give specifics.

"We've been here for 20 years. We hire people from here," Parkan said.

But at the Corps hearing in Bethel, residents talked mainly about spill risks and subsistence fears, erosion from barge traffic and the impact of big new docks.

Greg Roczicka, natural resources director for Bethel's tribe, Orutsararmiut Native Council, asked one of the experts on hand about the impact of barge traffic on tiny smolt salmon migrating to sea.

Bethel's John Wallace, who told the Corps he supports the mine as a way to instill a culture of work, said he wanted to see comparisons with other mines, like the Red Dog zinc mine near Kotzebue. The environmental review is too technical and will confuse most people, he said.

"It needs less engineer-speak and more people-speak, so that we can understand it," Wallace said.

Risks examined

The environmental review didn't examine worst-case scenarios such as a total collapse of the tailings dam but did look at some possibilities. There's a big chance of a small fuel spill and "a very low probability" of a significant one topping 100,000 gallons, the review concluded. If a diesel barge ruptured during spring smolt migration, an entire year of salmon could be affected, the environmental review found.

The review also analyzed the possibility of a breach in the tailings dam. A toxic slurry could block Crooked Creek and then head downstream. Contaminated water could reach the Kuskokwim River and flow into it for two days, the review found. There would be an emergency response, excavation of the material and extensive monitoring.

That chance is too much for some.

"For the tailings — there is no price that you can put on our subsistence way of life," Bethel resident Fritz Charles told the Corps. "It is going to impact everybody for hundreds and thousands of years. … There is no price for the fish, for the moose, for the wildlife and the waterfowl that we take each year."

Donlin says it is proposing to build its tailings dam foundation directly on bedrock. Workers would seal the area with a synthetic liner, the first mine in Alaska to do so. The dam would be a strong pyramid shape made entirely of rock, not tailings.

Donlin's design "is inherently the most stable construction process," Parkan said. Even a significant earthquake wouldn't destroy it, the environmental review concluded.

Village by the mine

Perhaps no place is more attuned to the possibilities and dangers than the small village of Crooked Creek, just 10 miles from the mine site and so remote residents can't yet get cellphone service.

During devastating floods in 2011, Donlin evacuated Crooked Creek residents to its nearby mine camp and helped the community rebuild. It also is a big supporter of educational programs that draw kids from that village and others, said Alison Zaukar, the 19-year-old tribal administrator there.

But in a phone interview, she said she is torn. She worries about subsistence and also the deeper economics. Good-paying jobs at the mine may hurt, not help, some who have never made real money before, she said.

"Chances are they are going to spend it on drugs, alcohol and all those negative side effects," Zaukar said in the interview.

The mine may boost the region for 30 years, but "what is it going to look like 30 years after?" she said.

Another community leader, former tribal president and administrator Evelyn Thomas, lives where Crooked Creek meets the Kuskokwim— and told the Corps she welcomes Donlin.

Locals who worked for Donlin during its exploration stage were productive and happy and had hope, she said in an interview.

In Crooked Creek, some are too poor to pay even $5 for a low-income hunting and fishing license, she said. The mine offers a chance that's been out of reach. Fears of Bethel residents with good jobs don't reflect the reality of village life, she said.

"It's our people who are going to be working there. It's our people who are going to see that the resources are watched carefully."

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