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The snags of Windy Craggy mine.

The Snags of Windy Craggy Mine

The wave of business support in Southeast Alaska for the mineral industry's rebirth continues to grow this summer. But one of the projects is causing American business and community leaders, not counting environmentalists, to stop and consider whether the mineral project, while a gold mine for Canada, might not prove to be the pits for Alaska.

The debate is over the proposed Windy Craggy copper, gold and silver mine located in British Columbia. Tucked in the Wrangell-St. Elias Mountains across the border from Glacier Bay National Park and Monument, the proposed huge open-pit mine is in the midst of wilderness, 80 miles north of Haines at the head of the Alaska Panhandle.

The mine, expected to be North America's largest copper mine, is proposed to produce 500 operating jobs and have an operating life of from 30-50 years. But while the mine is expected to generate nearly $160 million over its first decade in taxes to British Columbia and Canada, and pump more than $550 million from wages and supplies into the economy of British Columbia, its main positive effect on Alaska is that it should generate up to 125 transportation jobs - most based in Haines - through ore hauling and ore ship loading.

The problems for Haines, however, are that the mine is located just north of the confluence of the scenic Tatshenshini and Alsek rivers and will require construction of a 70-mile haul road along part of the Tatshenshini, connecting to the Haines Highway and leading to a deep-water port in Haines. At present, the leading sites for the port are at the Haines city dock, next to the state's ferry terminal in Lutak Inlet, or at the nearby surplus U.S. Army fuel tank depot.

At least in the view of some tourism executives, the haul road and a needed bridge would drown the marketability of one of Haines' summertime tourism assets. The community is used as a staging area for wilderness raft trips down the 160 miles of the two rivers leading into Dry Bay and the Gulf of Alaska.

It's also feared that in winter the rumble of ore trucks - some 30,000 trips a year, with a truck likely to pass roughly every 15 minutes - might dampen the interest of visitors, who now flock to Haines from late October into January to see the congregation of up to 3,000 bald eagles that roost in the trees of the state's Chilkat Bald Eagle Preserve. The Haines Highway passes through the midst of the best eagle-viewing habitat, as the narrow road parallels the river for about 25 miles leading north from Haines.

Besides tourism concerns, fishermen worry that ore that might blow off passing trucks could contaminate either the Chilkat River or Lutak Inlet on the south side of Haines - much like the harbor at Skagway has been contaminated by heavy metals because of ore terminal-loading operations there. They also fear that mine activities might contaminate the Tatshenshini and Alsek rivers. The Alsek supports major commercial salmon fisheries in Dry Bay, south of Yakutat.

Environmentalists specifically worry that the acidic runoff from the sulphite ore deposit's tailings will kill the rivers, much as sulfuric acid from a smaller siver mine at Houston, B.C. - carved from a similar ore deposit - is threatening to destroy the Canadian Bulkley River fishery. They especially question plans to cover the tailings with water behind a 300-foot tall containment dam. That site is almost directly over a famed earthquake fault - the fault that triggered the 1958 quake that ravaged Lituya Bay on Glacier Bay park's outer coast.

"The upper Lynn Canal produces millions of dollars of fish to Alaska. But a fuel spill from trucks hauling ore to the port, or the sinking of a disabled ore freighter, could have a real impact on the fisheries," says Alan Stein, president of the Salmon Bay Protection Association, an environmental-fisheries group that recently has attacked logging practices in southern Southeast.

Ken Leghorn, part owner of Alaska Discovery, a wilderness guiding firm based in Juneau, says development of the mine would kill the marketability of his firm's four yearly, 10-day raft adventures down the rivers. He believes it would cost his firm its $50,000 investment in white-water rafts and deprive it of the $80,000-$120,000 in revenues made from the excursions yearly.

"We sell the Tat as one of the world's 10 best wilderness raft trips," Leghorn says. "It is not that the river has the world's best rapids, because it doesn't. But the trip is awesome because for 10 days there are no roads, no cabins, only dozens of glaciers and wonderful wildlife.

"If they build a road and bridge halfway down the river it literally will turn a world-class attraction into an expensive four-day outing. In this case, mining and tourism aren't compatible." He notes that there are 18 firms - 9 Canadian, 9 American - having concessionaires' rights to take raft buffs down the river system.

Layout & Logistics. Gerald Harper, president of Geddes Resources Ltd., proposed developer of the Windy Craggy deposit, considers such talk needlessly alarmist.

Windy Craggy was a mineral deposit first discovered in 1958 by prospectors working for the Falconbridge organization. They walked into a valley and found copper-mineralized boulders lying on the valley's floor. It wasn't difficult to trace the deposit to the top of a steep peak. Given the inaccessibility of the deposit, however, there was little interest in the find until 1981.

In that year, Geddes Resources optioned the property and two years later acquired the claims outright, subject to a steep 22.5 percent net proceeds royalty to the claim owners. Surface drilling operations were carried out in 1981 and 1983, and in 1987 the company began driving an adit (one-way tunnel) from the southwest ridge of Windy Craggy Mountain to allow bulk ore sampling and to confirm the depth of the mineral find.

The company found two huge zones of high-grade copper, in which the ore was measured to be 1.89 percent copper, about four times better than at other U.S. mines. The deposit also contains 0.2 grams of gold per Canadian tonne, 3.9 grams of silver and 0.08 percent cobalt.

Better yet, there is a lot of it. The company places proven reserves at 113.8 million metric tons and likely total reserves at more than 165.4 million metric tons. That's enough to support a 132,000-ton-per-year open-pit mine for a minimum of 20 years, and more likely for 40-50 years.

Says Harper, "What we are talking about here is the creation of new wealth, the creation of long-term jobs, a project that will really help Canada's foreign exchange balance. It is a project that will open up an entire mining district to development."

Harper also is a vice president for Northgate Exploration, a firm that owns about 40 percent of Geddes stock. Another 20 percent of the project is owned by Cominco Ltd., the Canadian mining giant that operates the Red Dog zinc mine north of Kotzebue and has a stake in other mineral ventures in the Juneau area.

Development of the mine will cost between $400 million and $500 million and take three years from receipt of all needed permits, according to Harper. It would produce 900 jobs during construction. The company would like the mine, which will produce 1 percent of the world's annual copper needs, to be open by 1994 - about the time that several other North American mines are winding down their production.

The mine would be an impressive technical achievement. The company is proposing to build two open pits, one at the top of a nearly 6,000-foot mountain, the second underneath the nearby snowfield. The ore would then be driven down the mountain over a road carved from the Tats Glacier.

Bill Hales, the mine's project manager, says the company would build a 300-foot-high earthen dam to form a lake to hold the tailings the mine would produce daily. The waste rock, 350 million tons over the mine's life, would be placed in surface dumps and blended with limestone rocks to neutralize acid formation. According to Hales, covering the tailings with water and keeping them from contact with oxygen will curb the production of mine acid waste.

The project calls for trucking the ore to a concentrator near Tats Lake, while the ore would then move to Haines over first a one-lane and later two-lane haul road. The mine's developers have proposed to "hide" its road corridor as far away from the Tatshenshini River as possible and to make part of the road available for recreational uses. They also have proposed to operate regular-size trucks to cut impact on the Haines Highway.

Environmentalists, however, argue that rather than a concession to the state's concerns regarding the need for expensive widening, reconstruction and repaving of the mountainous Haines Highway, the change was more an attempt to keep the project from triggering a time-consuming, suit-laden American environmental impact statement process. That charge was refuted by Harper during an early May public meeting on the project in Juneau.

Hales has said that some acid run-off will likely flow from the containment pond and into neighboring Tats Creek, which flows into the Tatshenshini. But he argues that runoff will be neutralized sufficiently to not violate Canadian water standards or more stringent American-Alaska water standards by the time it reaches the U.S. border, after mixing with the larger Alsek River, 15 miles downstream.

During Alaskan public meetings, Harper emphasized that Geddes' plan to cover the tailing with water should mitigate the major concern of acid formation and runoff. But Alaskans, and now federal Canadian officials, aren't so sure.

According to comments on the project submitted by Alaska state agencies, water inundation is no guarantee that mineral oxidation won't take place over time. And if it does, its effects could be serious.

Amy Kruse, an ecologist for the Alaska Department of Environmental Conservation, says "Due to the huge scale of this project, failure of any one part (of road construction and use, tailings impoundment, or acidic generation) could have large impacts on the surrounding environment. The cumulative impacts of the entire project could have irreversible environmental effects on a very large scale."

Rick Reed, regional supervisor for the Alaska Department of Fish and Game, says acid runoff could severely damage the Alsek, which produces more than 10,000 king salmon. The river is one of three major trans-boundary salmon-producing rivers on the Panhandle.

Other state agencies have questioned the socio-economic impact of the mine on Haines and whether it would produce enough revenue from docking fees, ore loading facilities and property taxes to offset any potential negative tourism and fishing effects.

Frank Wallace, Haines' mayor, however, says the city generally supports the mine, as long as Geddes can solve its acid runoff problems. "It would bring an additional 300-400 year-round residents to town, and that would be a big boom for us. I don't feel the jobs would hurt the character of the town at all," he explains. Wallace notes the nearly $4 million annual payroll would stabilize the economy of the town of about 1,100 that currently depends on fishing, timber sawmill jobs and tourism for its life blood.

Divided They Stand. The project appears to have split the community. Tom Morphet, editor of the Chilkat Valley News, the local newspaper, says "Right now it is hard to say how people feel. There is no consensus. A lot of people who are in the middle normally on development versus preservation issues have a lot of questions about the mine's effects on tourism and fisheries. It is very controversial."

One indication of the disagreement: The city government basically supports the mine, if its environmental problems can be overcome, but the Haines Borough government has passed a resolution generally opposing the development, taking the stand that the problems are insolvable.

Wallace says preliminary research indicates that the truck traffic likely wouldn't scare off the eagles that come to the Chilkat Valley each winter to dine on a late fall salmon run prompted by warm upwelling currents in an area of the river near the village of Klukwan. He points out that the truck traffic, at least 50 round-trips a day, will force the state to install proper scenic pulloffs in the eagle preserve that might promote - not dampen - visitor interest in the preserve.

Alaska Discovery's Leghorn, however, says visitors won't come from around the world to visit the preserve with noisy trucks whizzing by.

Currently, the future for the mine is rocky. While the British Columbia provincial government is on record supporting opening of the mine in the wilderness area, Environment Canada, Canada's national environmental protection agency, in early June ruled that the mine's so-called stage one development plant was inadequate and sent the document back for a major rewrite.

The agency said the plan was lacking in designs to control acid runoff. It argues that the mine should have to meet Canadian water standards when the runoff first enters Tats Creek, not after it is diluted by Tatshenshini River water.

The ruling could delay review of the project by the province's mining review committee for months or years and add millions to the $43 million that Geddes already has spent on its development plans. Even after the stage one plan is rewritten, Alaska state agencies are arguing that the mine should have to move to draft a Canadian "stage two" report - one that would include a detailed socioeconomic impact statement for Haines and full engineering designs for the mine and haul road.

But if the mine can buy a terminal site in Haines and elects to use regular, instead of 80-ton oversize ore trucks, there is a real question whether Alaska state agencies can do anything to effectively stop or alter the project, should it win Canadian and provincial government approval.

The mine has refueled the passions of international conservation groups to press the Canadian national government toward classifying the area as the Tatshenshini Wilderness Park - given that the land is surrounded by Glacier Bay and the Wrangell-St. Elias National Parks on the U.S. side of the border and by the Canadian Kluane National Park on the northwest. The mine could generate in Canada the same type of emotional environmental debate as revisions to the Tongass National Forest and the opening of the Arctic National Wildlife Range have kindled in America.

"This is an issue that is going to be controversial for a long time," says Haines Mayor Wallace. "Until Geddes officials work out all the acid waste and contamination problems and guarantee the protection of all the fisheries, the Windy Craggy mine is going to be a long way from reality."

PHOTO : Rafting is popular on the scenic Tatshenshini River, which tourism operators and fishing industry proponents fear could be polluted by ore blowing off the passing trucks or acidic runoff from tailings.
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Author:Kleeschulte, Chuck
Publication:Alaska Business Monthly
Date:Aug 1, 1990
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