March 17, 2007 / 5:51 AM / 12 years ago

U.S. court to overturn controversial mine permit

ANCHORAGE, Alaska, March 16 (Reuters) - A controversial permit that would allow an Alaska gold mine to deposit its milled rock waste into a natural alpine lake is illegal and will be struck down, a U.S. appeals court said on Friday.

The 9th Circuit Court of Appeals said it plans to overturn the key wetlands-fill permit that was issued by the U.S. Army Corps of Engineers to Coeur d’Alene Mines Corp.’s (CDE.N) unit Coeur Alaska for the Kensington mine north of Juneau.

Coeur had planned for the mine to produce 100,000 ounces of gold annually and start operations by the end of this year. The company’s wetlands-fill permit would allow it to place 4.5 million tons of rock waste, or mine tailings, into the lake over 10 years.

“In issuing its permit to Coeur Alaska for the use of Lower Slate Lake as a disposal site, the Corps violated the Clean Water Act,” said the court’s 10-page order.

The permit, issued under a 2002 Environmental Protection Act policy change that eased rules for mountain top-removal mining, was the first that allowed a hard-rock mine to dispose of tailings in an existing natural body of water since the Clean Water Act was passed three decades ago.

The appeals court order was a victory for environmental groups that had sued to overturn the permit.

“The Kensington permit was a test case for the Bush administration to go back to mining practices from the pick-and-shovel days,” said Tom Waldo, a Juneau-based attorney with Earthjustice, the law group representing the environmental plaintiffs.

The case has drawn national attention because of its implications for other mines, including the massive Pebble copper and gold project proposed by Northern Dynasty Minerals Ltd. NDM.V for Alaska’s salmon-rich Bristol Bay region.

In a brief statement, Coeur said it was still reviewing the court order. “We just received a copy of the order within the past hour or so,” said the statement. “We don’t know the full ramifications of the order.”

Coeur had argued that lake disposal of tailings was the most practical and environmentally sound option for this particular mine, which is nestled in the coastal mountains of the Tongass National Forest.

Friday’s order was not a final ruling. It was issued in response to a request from the Corps’ for permission to grant a permit to Coeur Alaska to build a ditch around the lake for the disposal of the tailings.

Such a ditch would violate the Clean Water Act and the Corps and the mine’s developer should stop trying to accomplish such projects, the appeals court said in its ruling.

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