Mining Future -- Environmentalists Try To Stave Off Rush For State's Minerals

CUTLINE: CHRISTINE COX / SEATTLE TIMES: THE JUNEAU GOLDBELT (MAP OF AREA -- MAP NOT AVAILABLE IN ELECTRONIC LIBRARY)

JUNEAU, Alaska - Out near the end of the road, on the steep western flank of Mount Roberts, hangs the rusted frame of the once-great A-J gold mine. It is a scar on the landscape, a working man's monogram on a white-collar town.

It has been generations since Juneau traded its miner's headlamp and steel-toed boots for the bureaucrat's power suit.

But it was mining that gave Juneau its name, purpose and land on which to expand - half of all the homes and offices, from the state capitol to the harbor, are built on mine tailings.

So now, faced with yet another dramatic drop in oil revenue and government spending, Juneau is restarting its mining machinery. Encouraged by relatively strong metals prices and revolutionary technology, other Alaska communities are following suit, positioning the 49th state to become one of the nation's top minerals producers.

The resurgence of mining heartens Alaskans desperate to wean the state from oil, and it excites those longing for the full-tilt capitalism of the pipeline era. But this modern-day minerals rush disturbs other Alaskans, many of whom question whether they will truly profit from the promised economic revival.

``Working in the bowels of government is not like working down a mine shaft,'' says Skip Gray, a public television producer whose

salary is paid largely with state money. ``If there are government layoffs, I doubt very seriously if anyone will be able to trade their pink slip for a job slip at the mine.''

But the debate over mining in Alaska - like the fight over logging in the Pacific Northwest - is more than a contest for jobs. Most importantly, it is the confrontation of fundamentally different philosophies.

At issue is whether Alaska's vast mineral resources should be extracted and exploited - or revered and preserved.

Opponents of mining contend extracting natural resources from the earth is a crude and destructive method of making money. And they warn America's last frontier is about to be transformed by greed, arrogance and ignorance.

``The national debt is nothing compared to the environmental deficit Alaska is running up,'' says David Allison, a Juneau attorney who opposes mining. ``For years we've done nothing but take from the land, we've given absolutely nothing back. I guarantee you, when the bill is finally presented, we'll have spent this country's future.''

Mining proponents agree the future is at risk, but they charge it is the ``no-growth environmentalists'' who jeopardize the nation's well-being.

``Natural resources are a God-given gift to humankind,'' says Wally Hickel, Alaska's newly elected governor. ``We have an obligation to develop those resources for the betterment of all people.''

Last year, Alaska's miners produced more gold than in any year since 1950, according to a state report. Gold was Alaska's most valuable minerals commodity in 1989, accounting for 39 percent or $108 million of total minerals production revenue.

``There is no doubt but we're seeing a rebirth of the mining industry,'' says Steve Borrell, chairman of the Alaska Miners Association. ``Not just in gold mining, but in silver, zinc, copper and a variety of other minerals.''

In 1989, zinc and silver each contributed 10 percent to the state's total minerals production. Coal, sand and gravel, stone, peat and jade made up another 37 percent.

``The increase in the level of serious interest in mining Alaska is phenomenal,'' Borrell says. ``Despite the efforts of extremists to lock up the land.''

Nowhere is that more evident than in southeast Alaska, a region with vast deposits of varied minerals, cheap ocean transportation to Pacific Rim markets, and free of the violent political strife that makes South Africa and Central America (where the world's richest deposits are found) increasingly expensive and difficult to mine.

But nowhere is resistance to mining more strident and insistent than in this region of lush rain forest, blue-hued glaciers, icy waters teeming with salmon, and white-collar professionals.

Perhaps the best illustration of this contradiction is reaction to a proposal by the Canadian mining giant, Echo Bay Mines Ltd., to reopen the A-J.

Between 1897 and 1944, the A-J produced 3 million ounces of gold, making it the Western Hemisphere's top producing underground gold mine. Echo Bay says if its plan is approved, the mine would be returned to its former state of glory.

In full swing, the mine could generate up to 7 percent of the local economy, says analyst Eric McDowell, who considered the mine's potential impact at the request of city officials, half-owners of the A-J.

An estimated 450 new jobs would be created at the mine, with an annual payroll of $20 million, McDowell and company officials say. An additional 600 jobs indirectly related to the mine also would be created, they say.

The mine is jointly owned by Juneau's city-borough government and Alaska Power and Light, the local utility company. McDowell estimates that local government receipts from the A-J could exceed $5 million a year.

Echo Bay also has proposed reopening the historic Kensington gold mine, 45 miles northwest of Juneau. Owned jointly by Coeur d'Alene Mines and Echo Bay, the mine has a potential life of 10 years, would likely produce 200,000 ounces of gold annually and would employ up to 340 people for a yearly payroll of $13.6 million. Support sector workers would earn an estimated $7.2 million. McDowell estimates the Kensington could generate upward of $1.7 million in city-borough receipts.

Impressed with the preliminary revenue figures, local leaders say the A-J and Kensington projects could secure Juneau's fortune and future.

However, the Canadian mining giant has tapped a deep vein of distrust and resentment in the general population.

Critics say reopening the mine would generate a housing shortage, increase crime, drive up the costs of local drug and alcohol rehabilitation programs, endanger Juneau's drinking-water supply and cause immeasurable environmental damage.

``The mine would be a blight on Juneau,'' says John Howe, the only paid staffer with Alaskans for Juneau, a 450-member group formed last year to oppose reopening of the A-J. ``Echo Bay would reduce our mountains to rubble, fill our valleys with crushed waste rock, taint our water with chemicals.''

As proposed by Echo Bay, the A-J would operate nonstop seven days a week. Tons of cyanide would be used to leach gold from crushed ore, a recent technology that has transformed even unprofitable mines into bonanzas. Once the gold was removed, the remaining material - called waste rock or tailings - would be dumped behind a 345-foot dam built at the head of what is now Juneau's most popular hiking valley.

As many as 100 million tons of tailings containing toxic heavy metals would be dumped into Sheep Creek Valley each year. Echo Bay officials say the residual cyanide can be chemically neutralized, but Alaskans for Juneau are suspicious.

``Even if they can do what they say, will they?'' Howe asks. ``There is some pretty strong evidence to suggest protecting the environment is not the company's top priority.''

Indeed, Echo Bay was the focus of a protest by the Nevada Chapter of the Sierra Club last year for failing to meet environmental standards after an estimated 700 birds and other wild animals died at a tailings pond at Echo Bay's McCoy/Cove mine, in the high desert 150 miles northeast of Reno, Nev.

Echo Bay's manager of environmental compliance says once a problem was evident, a new water treatment system was designed and installed.

Mindful of the critics' increasingly loud voice, Echo Bay recently began a good-neighbor campaign. Last May, the company submitted a revised A-J plan, in an attempt to allay environmentalists' fears. There are television and radio commercials explaining the benefits of mining and workshops for residents who want face-to-face answers.

Says David Stone, spokesman for Echo Bay: ``Alaska is this country's environmental conscience. People see Alaska as the last place to do it right. We have no intention of doing it any other way.''

The Juneau city-borough government also has responded by adopting some of the toughest mining regulations in the country.

Mining opponents are not impressed, however. They contend standards are so lax nationally that Juneau's new regulations can hardly be considered a crackdown on the industry.

Idaho only recently began regulating cyanide leach operations. Montana has started controlling cyanide use by small mines previously exempt from state regulation. However, Montana and Wyoming are expected to permit heap-leach mines near Yellowstone National Park and prime trout-fishing streams.

``They told us not to worry when the Greens Creek silver mine opened last year,'' says Juneau resident Sandy Harbanek, ``So we didn't and we ended up with polluted water.''

Greens Creek, 20 miles southwest of Juneau on the thickly forested Admiralty Island, is the nation's top-producing silver mine. It is expected to yield 6.4 million ounces of silver and 36,000 ounces of gold. It has created 200 new jobs, most positions are occupied by local residents.

Owned primarily by Kennecott Corp., the mining company has been praised by state and federal regulators as an exemplary operation. Yet the company was recently fined $50,000 by the Environmental Protection Agency for excessive discharges of trace metals during mine start-up. It also is under investigation by the state for a May 1989 ore spill.

``If the best-run company can't avoid contaminating the waters, how can we expect average companies to do anything but create disaster?'' asks Alaskan for Juneau's Howe. ``Do we seriously need jobs at the risk of an ugly environment?''

Alaska's Gov. Hickel has only one answer to that, and he repeats it time and again as he pushes natural resource development. ``If a man doesn't have a job, his environment is ugly regardless of the scenery.''

Much of the wealth mining companies hope to extract from the earth is buried in national forests, national monuments and national wilderness areas, in Alaska and the Lower 48.

Recently, the U.S. Forest Service recommended changes in the Tongass National Forest management act to encourage mining development. A significant shift in approach, the new ``minerals prescription,'' would set precedent, possibly opening other national forests to increased development.

Regional Forester Michael Barton says the revised plan would ``enhance the economic viability'' of the Tongass.

Chris Finch, with the Southeast Alaska Conservation Council, says the proposal would be ``nothing less than a violation of the public trust.''

In the Misty Fiords National Monument, near Ketchikan, US Borax and Chemical Corp is continuing its 10-year-old effort to exploit Quartz Hill, a deposit that holds one-tenth of the world's known reserves of molybdenum. Molybdenum is an ore used in manufacturing various alloys.

Longtime mine opponent Larry Painter of Ketchikan is outraged, but he finds fault with others besides US Borax. ``This is Alaska's equivalent of Yellowstone National Park and US Borax wants to put an open-pit mine in it. That makes me angry. But it upsets me even more than nobody in power has told them, `No.' ''

Although it was not an outright ``no,'' EPA this spring did reverse a Reagan administration decision allowing 80,000 tons of tailings to be dumped daily into a fiord noted for its salmon fishing. The action sent a jolt through US Borax, which said diverting the tailings to more distant, deeper fiord would increase costs by 55 cents per pound of molybdenum.

Mining rights to Misty Fiords were granted by an exception to the Alaska National Interest Lands Act. In most cases, however, resource developers have rights under the General Mining Law of 1987.

That frontier legislation allows individuals and corporations to look for minerals on most federal land and stake claims on their discoveries. Depending upon the type of claim, full ownership of the land can be bought for $2.50 to $5 an acre. If later the company determines it is not ``economically feasible'' to extract minerals, it is free to sell the land. That happens frequently, and often at a huge profit.

If the claim proves profitable, the federal government is not entitled to any royalties.

The last of the frontier-era legislation aimed at encouraging settlement of the West, the 118-year-old law has made possible the kind of minerals development essential to a modern industrial nation. But it also has contributed to a legacy of maimed landscapes, polluted streams and abandoned toxic-waste dumps.

Congress is now considering scrapping the law. Leading that effort are two democrats, Sen. Dale Bumpers of Arkansas and Rep. Nick Joe Rahall II of West Virginia. Both would like to see government's regulatory grip tightened, and Bumpers would like to see the U.S. Treasury collect royalties.

On the other side are western conservatives, lead by Republican Sen. James McClure of Idaho, who say scrapping the law and imposing new costs on the high-risk, capital-intensive industry will shut down the nation's mines.

As in the case of Spotted Owl vs. Logger, environmentalists say such claims of economic doom are greatly exaggerated. But they cannot deny the need for some level of resource development.

Not even in Alaska, where certain insupportable illusions of independence and self-sufficiency are accepted as gospel.

``We like to say we're free up here, that we don't need the same things as you folks `Outside,' '' says Juneau taxi driver Dan Gerhing. ``But don't you believe it. If we were so free, we wouldn't need oil. And we need oil. Don't you know, it's trying to get off oil that's got everybody so excited?''