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Mine Openings Trouble Alaskans

Companies make plans to open old mines but face growing resistance from environmentalists. GOLD RUSH

THE rusted and rocky bones of Alaska's mining past lie scattered throughout its capital city. Ringing state government buildings, espresso bars, boutiques, and the harbor are mill tailings and corroded scraps of metal equipment from the gold and silver mines that produced fortunes in the early 1900s.

Now, companies are restarting the state's mining machinery. With huge mining projects coming on line, Alaska is poised to become one of the nation's top producers of gold and silver.

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But mining's reawakening is clashing with today's heightened environmental consciousness.

Nowhere is the mining renaissance stronger than in southeastern Alaska, an area rich with varied deposits, access to cheap ocean transportation to Asian markets, and freedom from the political strife that troubles South Africa and Central America.

And nowhere is the environmental resistance sharper than in this fishing-dependent, rain-forested region, where the Sierra Club Legal Defense Fund just received a $90,000 grant to add a mining specialist to its staff for the next two years.

Twenty miles southwest of Juneau, on lush Admiralty Island in the Tongass National Forest, a mining consortium last year opened what has become the nation's top-producing silver mine.

The Greens Creek Mining Company, owned primarily by Kennecott Corporation, has been praised by state and federal regulators for a cooperative attitude. Yet the company was fined $50,000 recently by the Environmental Protection Agency (EPA) for excessive discharges of trace metals during mine startup and is under investigation by the state for a May 1989 ore spill. Environmentalists say these incidents show that even mines run with the best intentions pose risks.

Echo Bay Mines Ltd., based in Edmonton, Alberta, seeks to reopen the Alaska-Juneau Mine (A-J) near downtown Juneau, producer of 3 million ounces of gold from 1897 to 1944, to make it the Western Hemisphere's top-producing underground gold mine. The plan has drawn howls of protest in the white-collar capital for the proposed damming of a valley popular with Juneau residents for recreation. The valley would become a tailings dump for the mine, which critics say would endanger the safety of Juneau's water, create noise and visual blight, and depress home values.

Echo Bay, along with Coeur d'Alene Mines of Idaho, plans also to reopen the Kensington Mine 45 miles north of Juneau. Kensington has higher quality ore than the A-J mine, which gives it lower costs and more promise, analysts say. But fishermen are casting wary eyes on the mine, located just onshore from one of the region's richest salmon runs - $6 million worth of fish that would be vulnerable to chemical spills, leaks, and industrial traffic.

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US Borax and Chemical Corporation has plans to exploit the Quartz Hill deposit, which holds a tenth of the world's known reserves of molybdenum, an ore used in various alloys.

Debate over Quartz Hill, surrounded by wilderness areas within Misty Fiords National Monument near the southern tip of the state, has raged for over a decade. The Alaska National Interest Lands Act of 1980, which created the monument, included an exemption to allow development of the Quartz Hill deposit. Some in nearby Ketchikan say the exemption still stings.

``This is our Yellowstone National Park, and they want to put an open-pit mine in it,'' says longtime mine opponent Larry Painter of Ketchikan, gazing out the window of his fishing boat.

Borax was jolted in May when the EPA reversed a Reagan administration decision to allow 80,000 tons of tailings to be dumped daily into a salmon-rich fjord. Borax is protesting the EPA reversal, claiming that diverting tailings to a more distant, deeper fjord would increase costs by 55 cents a pound of molybdenum.

In Juneau, Echo Bay has embarked on a good-neighbor campaign. The company in May released a rewritten A-J mine plan revised to accommodate more than a year's worth of protests from environmentalists and homeowners. Echo Bay has also made visible contributions to local charities and community events.

Critics remain unimpressed. ``Echo Bay's playing a PR game with people's health and safety,'' says John Howe, the paid staffer of Alaskans for Juneau, a 450-member group formed last year to oppose the A-J's reopening. ``They must think we're stupid.''

Mr. Howe's office is located nearly directly under the rusted A-J mine entrance used in Juneau's past. He acknowledges that mining is an important part of the history of the city named after gold prospector Joe Juneau. But history doesn't justify a huge industrial operation nearly in downtown Juneau, he argues.

Suspicion about the overwhelming powers of the huge mining companies that have set their sights on the state is common in southeastern Alaska. In Ketchikan, mine opponents are fond of pointing out that US Borax - and Greens Creek's Kennecott - are owned by RTZ Corporation PLC of Britain, the world's largest mining company.

``They're powerful,'' Painter says. ``The big machine just sits there and idles and waits for everybody's money to run out and apathy to take over.''

Some mine proponents complain that increased environmental vigilance has stalled Alaska projects like the Quartz Hill mine. Steven Borrell, head of the Alaska Miners Association, points to the proliferation of mines across the border in British Columbia as evidence that friendlier political atmospheres stimulate development.

``In Alaska, it's a matter of lockup and preserve as is, rather than finding ways to make a project environmentally acceptable,'' Mr. Borrell says. ``The Canadians, on the other hand, work very diligently with companies to make it work.''

But Eric Friedland, chairman of Fairbanks Gold Ltd., of Vancouver, British Columbia, says that while Alaska has stricter environmental rules than British Columbia, it is easier access to capital, not the absence of regulation, that stimulates faster mine development across the border. Canadian projects have backing from Vancouver's financial establishment, including a stock exchange where the vast majority of listed companies are mining firms. Alaska has no similar financial resources, he says.

Fairbanks Gold plans to develop a huge open-pit gold mine just north of Fairbanks, and Mr. Friedland maintains that good projects will thrive and that the large companies planning Alaska ventures should have no trouble meeting the state's growing environmental demands. ``The cream of the cream is working in Alaska,'' he says.

But mining critics often draw pointed parallels with another huge corporation.

``It seems to me those tailings are going to get into the water at some time,'' Haines resident Vivian Menaker said at a meeting on the Geddes project. ``Like the Exxon Valdez, they said it was very, very remote that there would be an oil spill, but look what happened.''

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