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Donlin Gold’s Record ROD

Nov 13, 2018Mining

Col. Michael Brooks (left), commander of the US Army Corps of Engineers – Alaska District, and Joe Balash (right), US Department of the Interior’s Assistant Secretary of Land and Minerals Management, sign the first joint record of decision between the Corps and Bureau of Land Management, August 13, 2018.

Donlin Gold

O'Hara Shipe

In August, a joint Bureau of Land Management (BLM) and US Army Corps of Engineers Federal Record of Decision (ROD) was handed down to Barrick Gold Corporation and NOVAGOLD Resources, who jointly own Donlin Gold.

Aerial view of the proposed Donlin Gold Mine site, situated near the Kuskokwim River.

Donlin Gold

Interior project hits major milestone

Located ten miles from Crooked Creek, the proposed Donlin Gold Mine sits on what is predicted to be one of the largest and highest-grade undeveloped open pit gold endowments in the world. If the estimates are correct, the proposed mine could produce an average of 1.3 million ounces of gold annually during the mine’s projected twenty-seven-year lifespan. Even with the ROD, it will likely be years before the mine is developed and even longer before it begins producing.

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An Extensive Permitting Process

Aerial view of the proposed Donlin Gold Mine site.

Donlin Gold

In December 2012 Donlin Gold and its partners assembled a team of field scientists to conduct feasibility studies to include in the initial Section 404 permit applications and Environmental Impact Statement (EIS). Enforced by the US Army Corps of Engineers and overseen by the Environmental Protection Agency (EPA), Section 404 of the Clean Water Act regulates the discharge of dredged or fill material into waters of the United States, including wetlands. The program largely affects water resource projects like constructing dams and levees as well as certain infrastructure developments and mining projects.

The EPA suggests that, for most material discharge that will only have minimal adverse effects, a general Section 404 permit is sufficient, allowing eligible projects to proceed with little delay. In Donlin Gold’s case, acquiring the required 404 permit was more difficult than anyone initially anticipated.

“I think originally when we first applied for our Section 404 permit we may have thought the process would have gone a lot quicker. But ultimately, I think it wasn’t that bad in terms of an extended review time considering the complexity of the project. It was a very thorough environmental review, and that’s what matters most,” says Donlin Gold External Affairs Manager Kurt Parkan.

The Donlin Gold proposed project includes several items that require review under Section 404, including “cut-and-fill for construction of roads, airstrips, port facilities, laydowns and work areas, mine site facilities, material sites, and installation of culverts and bridges at stream crossings, power poles, and the natural gas pipeline,” according to the ROD, as well as a port at Jungjuk Creek, two barge landings on the Kuskokwim River, and a natural gas pipeline crossing, also at the Kuskokwim River. “Impacts to navigable waters include up to three acres and 2,472 linear feet of [waters of the United States],” the report states.

For the Section 404 process, it was incumbent on Donlin Gold to prove that steps had been taken to avoid impacts to wetlands, streams, and other aquatic resources during construction and throughout the mine’s planned operation. With such an extensive affected landmass, the US Army Corps of Engineers has taken on a special role within the permitting process.

“Whenever wetlands are impacted the Corps is involved, but in the past the Corps hasn’t really taken on these projects as the lead agency in the EIS process. Sometimes the EPA will step in if water is the primary issue, but because we’ve got such a large project involving a lot of wetlands, the Corps has taken the lead,” says Parkan.

Donlin Gold initially proposed a plan to barge supplies and fuel up the Kuskokwim River during the shipping season between June and October, but when the company held community outreach meetings it ascertained that some residents were uncomfortable with the amount of diesel that would be traveling up the river. In response, Donlin Gold went back to the drawing board to retool its strategy. The result was a proposed natural gas pipeline that would supply the power plant while cutting down on the number of barges. Overall, the alternative allowed Donlin Gold to reduce the amount of barged diesel by two-thirds. However, the proposed pipeline requires the involvement of BLM.

Donlin Gold’s suggested buried natural gas pipeline would measure 14 inches and span 312 miles from the Cook Inlet region to the mine site. This means that the pipeline would cross 97 miles of federal lands that are affected by the Alaska Native Claims Settlement Act, requiring both an Offer to Lease for the right-of-way portions of the pipeline that cross those lands from BLM and cooperation from two Alaska Native corporations: Calista Corporation and The Kuskokwim Corporation (TKC). Calista owns the mineral rights and TKC owns the surface rights, which means Donlin Gold is now operating the project under a mining lease with Calista and a surface use agreement with TKC.

The agreements between all parties have granted Donlin Gold a thirty-year right-of-way grant for the construction, operations, maintenance, and termination of the natural gas pipeline. It also ensures that the mine will provide direct and indirect economic benefits (contracting and hiring preferences) to Calista and TKC, as well as stringent environmental-stewardship obligations.

The complex permitting and agreement process has a historic aspect to it. According to Lesli Ellis-Wouters, communications director for the BLM Alaska State Office, this is the first Joint ROD between the US Army Corps of Engineers and BLM in the nation.

“This Joint ROD was in keeping with Executive Order 13807… signed August 15, 2017, specifically under the order’s ‘One Federal Decision’ initiative. This Joint ROD furthers the administration’s goal of being good stewards of public funds by eliminating duplicative processes,” says Ellis-Wouters.

Remaining Opposition to the Project

Col. Michael Brooks (left), commander of the US Army Corps of Engineers – Alaska District, and Joe Balash (right), US Department of the Interior’s Assistant Secretary of Land and Minerals Management, sign the first joint record of decision between the Corps and Bureau of Land Management, August 13, 2018.

Donlin Gold

As with all complex projects, there are some who do not share the company’s excitement. A group calling itself the Yukon-Kuskokwim River Alliance has said that they are “outraged” by the ROD. Lead by cofounders Alissa Nadine Rogers and Danielle Craven in Bethel, the group claims that the social and environmental impacts of the mine would be detrimental to the subsistence region and traditional Yup’ik culture.

The Alliance’s claims stand in contrast to what Donlin Gold says was a thorough process that included numerous community-centric conversations.

“I think the project has become a better project as a result of the extensive amount of conversations, dialogue, and feedback that we’ve received over many years of interaction with stakeholders in the region. I think we’ve counted over 400 meetings between village meetings, mine tours, and agency hearings. We’ve also been active with newsletters and social media because it’s really important for us to share with the people of the region what plans we, TKC, and Calista have,” says Parkan.

Looking to the Future

Andy Cole, General Manager, Donlin Gold

Donlin Gold

Even with a ROD in hand, Donlin Gold has some hurdles to overcome before the project breaks ground. First, the company must secure a right-of-way from the State of Alaska for the portions of the pipeline that go through state managed lands. Alaska Statute 38.35.050 requires that anyone who wants to own a pipeline located in whole or in part on state land must apply for a noncompetitive right-of-way lease of the state land. Donlin Gold is hopeful that it will receive the right-of-way later this year. Second, the State of Alaska has to approve and then issue Donlin Gold’s financial insurance and integrated waste management permits.

“Securing the majority of our major permits to construct and operate is sort of what we’re focused on right now. We are also looking at ways to optimize the project, and so those studies will continue to look at ways to reduce the initial capital expenses and operating expenses,” says Parkan.

Donlin Gold will also further their outreach efforts with Calista and TKC, including job training and establishing preferential hiring processes for shareholders. In 2017 Donlin Gold and TKC formed the Donlin Gold Kuskokwim Education Foundation (DGKEF), which focuses on scholarships for individual students and one-time certification and training programs for shareholders. The program hopes that these efforts and its recent partnership with EXCEL Alaska will prepare Kuskokwim region shareholders for jobs associated with large development projects in their community. This semester six students are receiving scholarships that can be applied to their university and college degrees, as well as technical certificates.

“DGKEF makes a substantial contribution to the EXCEL Alaska program, an 8th through 12th grade program that focuses on personal, social, and career development; service training; urban familiarization; leadership; character; and life skills development for more than 4,000 students in rural Alaska. DGKEF has also contributed to the heavy equipment training for fifteen TKC shareholders and driller assistant training for twenty-three TKC shareholders,” says TKC’s Vice President and Chief of Staff Andrea Gusty.

Donlin Gold General Manager Andy Cole believes that the company’s focus on providing primary and secondary benefits to the Yukon-Kuskokwim region makes the project a model worth replicating.

“This has been a thorough process, with more than twenty years of planning and development, but I think it clearly demonstrates that the project has a track record of engineering excellence and a strong culture of safety, environmental stewardship, and community engagement, all values that will remain constant,” says Cole in a press release. “We believe Donlin Gold can be a model of responsible mine development with the potential to generate meaningful benefits for our Native corporation partners and communities throughout Alaska for many decades to come.”

Alaska Business June 2024 cover
In This Issue
Delivering Anchorage's Promise
June 2024
Welcome to the June 2024 issue, which features our annual Transportation Special Section. We've paired it this year with a focus on the Pacific Northwest and Hawai'i, as Alaska has close ties to both that reach far beyond lines of transportation. Even further out past our Pacific Ocean compatriots and our Canadian neighbors to the east, Alaska's reach extends to India and Singapore. Enjoy this issue that explores many of Alaska's far-flung business dealings.
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