Teck Cominco face Red Dog violations

Vancouver — Residents of a remote Inupiat Eskimo village on Alaska’s northwestern coast have filed a lawsuit against Teck Cominco (TEK-T) charging the world’s largest zinc company with 2,171 federal water-pollution violations at its Red Dog mine.

Filed in U.S. District Court as a citizen action under provisions of the Clean Water Act, the lawsuit seeks more than US$59 million in fines, or the maximum US$27,500 for each violation. The local group filed the lawsuit after negotiations between the two parties failed to reach a settlement.

Kivilina is the closest village to the mine and home to 380 people. The lawsuit was filed on behalf of the Kivilina Relocation Committee, a local government body, by the San Francisco-based Center on Race, Poverty and the Environment.

According to the lawsuit, the quality of local drinking water had deteriorated and fish and wildlife populations have suffered, since the mine launched production in 1989.

The Red Dog operation is located on land owned by NANA Corp.,a for-profit regional corporation owned by Inupiat Eskimos of northwest Alaska, including the Kivilina villagers.

Under its lease terms, Teck Cominco pays royalties to NANA and ensures that a large percentage of its mine workforce is made up of NANA shareholders.

Although mineralization was first discovered in the area in 1953, the Red Dog discovery is credited to the late Robert Baker of Kotzebue, Alaska and Irving Tailleur of the U.S. Geological Survey, who in 1968 was mapping the De Long Mountains. Baker, a bush pilot, spotted a rusty zone while flying over Red Dog Creek. Tailleur visited the site and collected samples yielding 2% lead and 1% zinc. These finding were included in a USGS open file published in 1970. Quickly catching the eye of Cominco, now part of Teck-Cominco, native land claims issues prompted the major to cool its heals for a number of years. Finally by the early 1980’s, Cominco was given permission to move ahead with the project.

Located 1,000-km northwest of Anchorage, the Red Dog mine entered commercial production in 1990. The main deposit is 4,400 ft long and varies in width from 200 ft in the north to 1,400 ft in the central and southern portions. Mineralization is marked as a flat-lying, stratiform zinc-lead-silver body with associated barite. Following five years of production exploration resumed in 1995, quickly resulting in the discovery of the Aqqaluk deposit. Located just across the creek from the main deposit, Aqqaluk holds a possible reserve of 72.9 million tonnes grading 13.6% zinc, 3.7% lead and 65 grams silver. Subsequent definition drilling cut a new deposit just north and stratigraphically deeper than Aqqaluk, dubbed Paalaaq. Lying 500-to-1000 ft below the surface, the Paalaaq deposit hosts and inferred resource of 13 million tonnes grading 15% zinc, 4% lead and 90 grams silver.

By 1999, company geologists and geophysicists employed new interpretations of structure, mineralization styles and both conventional and innovative geophysical surveys. Their efforts resulted in the discovery of Anarraaq some 10-km north of the mine site. Earlier this year, Teck Cominco tabled an inferred resource of 17.2 million tonnes grading 15.8% zinc, 4.8% lead and 17 grams silver per tonne for the new deposit.

Despite hosting thickness’ and grade similar to those at Red Dog, Anarraaq and the newly discovered mineralization to the north, both lie 2,000 ft below the surface, which means more expensive mining costs than the current open-pit mine. Based on the company’s criterion of a 10% return at a zinc price of US45 per lb., analysts still aren’t certain if this deep seated mineralization can be developed as a stand alone operation.