Teck Alaska Inc. says it expects approvals from the U.S. Environmental Protection Agency Nov. 9 to develop a new mining area at the company's Red Dog Mine in Northwest Alaska.

Reserves in the existing pit at Red Dog will be exhausted by mid-2011 and Teck wants to shift mining to an adjacent deposit, Aqqaluk, that will allow the company to maintain present levels of zinc and lead concentrate production until at least 2031.

The mine, operating since 1989, is in the De Long Mountains about 90 miles north of Kotzebue. Ore concentrates are trucked about 60 miles to a port on the Chukchi Sea, where they are stored for shipping during a three-month ice-free season.

The mine has provided a major economic boost for Northwest Alaska. NANA Regional Corp. of Kotzebue owns the land where the mine was developed, and over the years about half of the mine workforce are employees hired from villages in the region.

Red Dog is one of the world's largest producers of zinc, producing about 1.1 million tons of zinc concentrate and 250,000 tons of lead concentrates yearly. Teck spokesman Jim Kulas said the company expects to maintain the same output as it mines Aqqaluk, which is adjacent to the pit now being mined.

"Aqqaluk's ore has a slightly lower zinc content than the 20 percent zinc ore in the pit now being mined, but we will compensate for this by mining and milling larger quantities of ore," Kulas said.

EPA issued a final environmental impact statement for the Aqqaluk project Oct. 9. The FEIS is now in a required 30-day public comment period. The federal agency is expected to issue its record of decision approving the document on Nov. 9. At the same time EPA is expected to issue a wastewater discharge permit for the Aqqaluk project, Kulas said.

Teck hopes to secure the remaining permits needed from federal and state agencies by Nov. 30, which would allow it to begin removing overburden at Aqqaluk in the spring and to begin mining later in the year, he said. The company still needs a U.S. Army Corps of Engineers Section 404 dredge and fill permit, and approval for the mine reclamation plan from the state of Alaska.

Securing approvals from the EPA is a big step for the Aqqaluk project, but there is still a possibility that environmental groups could appeal the permits, Kulas said. That could cause delay, which concerns Teck because of the need to keep Aqqaluk work on schedule and meet production targets in 2011 when the current pit is exhausted.

When EPA issues permits, its procedures allow a 30-day period in which appeals can be filed. Hoping to stave off such opposition, Teck has been meeting with environmental groups and local communities that voiced concerns during EPA's public consultation period on the EIS.

Red Dog faces difficult environmental challenges because of the high metals concentrations in the local environment. The zinc ore body, virtually at the surface, leached zinc sulfates into local streams - water coursing through the ore body acquires the zinc - before mining began to the point that fish and other aquatic life could not survive.

When Teck developed the mine, the wastewater treatment systems that were installed cleaned up local streams to the point that fish returned.

Although the fish are now thriving, the company still faced technical difficulties over the years in meeting strict water quality standards, and has operated under a compliance order negotiated with the EPA and state agencies. EPA still imposed a $120,000 fine on Red Dog last September for a series of technical violations of its discharge permits.

The company had added fresh water from the drinking water supply to improve the performance of its discharge water treatment system, a procedure that had been discussed and agreed on with EPA's Region 10 office. However, it was still a violation of regulations that required only natural water to be used in the system. The fine was levied even though the agency had long been informed of the situation.

Red Dog has also had a problem meeting the state's stringent total dissolved solids standard of one-third above the background level, which works out to about 170 parts per million at the end of the wastewater pipe at the mine. The TDS levels in Red Dog's wastewater have been around 2,000 ppm since the mine began operations. The new discharge permit that will be issued Nov. 9 will have a limit of 1,500 ppm, a level at which fish can live.

There was no state TDS standard when the mine began operating in 1989. It was imposed nine years later. The TDS measurement is taken at the end of the pipe where wastewater flows into Red Dog Creek, but the solids are diluted in the flowing waters of the creek.

What is important is that Teck removes most of the zinc metal in the wastewater by applying lime. Through that process, what had been a zinc sulfate in the wastewater was converted to calcium sulfate, a non-toxic compound, which is what is discharged.

Teck caught in a Catch 22

The mine will be able to meet water discharge standards in the revised EPA discharge permit, expected next month, Kulas said.

Having helped fish return to local streams over the years, Teck must keep them healthy after the mine closes - sometime after 2031. The company will have to continue operating the water treatment plant at the mine site almost in perpetuity, Kulas said. Teck will set up a $230 million fund to support this, under an agreement with the state, he said.

Local Inupiat Eskimo villages support development of Aqqaluk. Some see that as a model for how a large resource project can be developed in cooperation with local aboriginal groups, said Rosie Barr, vice president for resources at NANA Regional Corp., an Alaska Native regional development corporation in the area. Barr is an Inupiat from Kivalina, a village near the mine.

NANA has 11,500 Native shareholders who mostly live in 11 small communities in a 38,000-square-mile region of Northwest Alaska. The corporation owns the land where the mine was developed and receives royalties that are shared with other Native regional and village corporations across the state. The revenue sharing is required by the federal Alaska Native Claims Settlement Act, which granted lands to NANA and other Native corporations in 1971.

NANA has parlayed its ownership into jobs as well as royalties, Barr said. More than half of the 560 workers now employed by the mine are NANA shareholders hired from local villages and trained over the years, she said.

Good-paying jobs have lifted local villages out of economic depression and have helped ease social problems like alcoholism and a high suicide rate that had been linked to a previous lack of jobs, Barr said.

Teck now pays NANA a royalty of 25 percent of net profits. The royalty will increase to 30 percent in 2011. The agreement originally provided that Teck pay smaller royalties and increase it to 25 percent after the company recovered its investment, which occurred in 2007, Barr said. Royalties increase 5 percent every five years.

NANA received $212 million in royalties from Teck in 2008, a year of high zinc prices, and 62 percent of this, or $122 million, was shared with other Native corporations around the state, Barr said. NANA retained $90 million of the royalties, and also engaged in several mine support joint ventures, such as in trucking concentrates from the mine to its port, which earned NANA an additional $111 million in revenues.

Earnings from Red Dog have helped NANA diversify into a variety of other industrial support sectors, such as engineering, construction and camp services in Alaska North Slope oil fields, Barr said.

Tim Bradner can be reached at tim.bradner.@alaskajournal.com.