Cyanide Issue Clouds Juneau’s Visions of Gold

About 2 miles south of downtown, on the western flank of snow-capped Mt. Roberts, looms the hulking, rusted frame of the abandoned A-J Mine.

Its rich lode of gold gave birth 100 years ago to this small city in a setting of misty fiords, icy peaks and almost constant rain.

Now Juneau is turning to the mine again. Facing a decline in oil revenues, city officials and Echo Bay Exploration Inc. of Canada plan to turn the A-J into the largest underground gold mine in the Western Hemisphere.

The mine would operate nonstop seven days a week and use tons of cyanide each day to leach the gold from crushed ore, a technique that has transformed previously unprofitable mines into bonanzas.

It is also a technique that environmentalists say could pollute the region’s air and drinking water and endanger salmon fisheries in nearby Gastineau Channel.

“They say they can control pollution from cyanide, but will they? They said they could control an oil spill at Valdez, but did they?” said George Rogers, 73, a retired economist and Juneau resident of 50 years.

Echo Bay officials say the project would generate 450 jobs, a $20-million annual payroll and 300,000 ounces of gold each year for the 13-year life of the mine. The City of Juneau would earn 3.5% royalties from the gold produced and gain an estimated 600 jobs indirectly related to the mining.

In full swing, the project would amount to 7% of the local economy, said Eric McDowell, economic forecaster for Juneau. That could come in handy for a capital city of 30,000 people that is filled with white-collar government workers dependent on the state’s dwindling oil income.

The plan, developed by Echo Bay, calls for milled ore to be soaked in vats containing a weak cyanide solution that dissolves gold. After the gold is extracted, residual cyanide would be chemically neutralized.

Up to 100 million tons of tailings containing toxic heavy metals would be dumped each year into nearby Sheep Creek Valley. A 345-foot dam would be built at the head of the valley to create a reservoir, so the wastes would be under 25 feet of water.

“Sacrificing Sheep Creek Valley for the short-term jobs and payroll this mine would bring isn’t worth the risk to the environment and health and safety of local residents,” said Skip Gray, 40, a cable television producer and leader of Alaskans for Juneau, a group opposed to the mine.

Opponents say they will battle the proposal through several steps. The company must obtain permits from a host of local, state and federal agencies, including Juneau’s Planning and Zoning Commission, but city officials appear committed to reopening the mine by 1991.

Mine supporters say it is not a question of losing a chunk of wilderness, it is a question of saving their city.

“I see it as using a valley, not losing one,” said Don Abel, 53, a lifelong resident of Juneau and owner of a building supply company. “If oil revenues go down, this town will go down with them.”

Alaska’s other two large cities, Fairbanks and Anchorage, have diversified economies based on mining, defense, transportation, government and fishing as well as oil, but they also suffered when oil prices fell about five years ago, authorities said.

Meanwhile, many of the old mines scattered among the granite peaks of the 100-mile-long Juneau gold belt are being reevaluated for the first time in 45 years.

Precious-metals exploration in Alaska tripled between 1987 and 1988. Last year, Juneau saw one of the nation’s largest silver mines swing into operation 15 miles away on Admiralty Island. The Greens Creek mine, expected to yield 6.4 million ounces of silver and 36,000 ounces of gold, has created 200 jobs for miners who are ferried to the site on catamarans operated by local entrepreneurs.

The sudden return of precious-metals mining in these parts has caught wildlife biologists and state conservationists unprepared.

“I’m a little worried about it because we just don’t have the manpower,” said a water quality expert with the State Department of Environmental Conservation in Juneau. “But we are going to have to set up some kind of monitoring program if we are going to rely on data other than mining company information.”

Indeed, the Nevada Chapter of the Sierra Club last year requested a federal investigation into allegations that ponds containing cyanide at Echo Bay’s McCoy-Cove mine, about 150 miles northeast of Reno, Nev., caused the death of 700 birds and other wild animals.

“It turned out there was a problem at a reservoir intended to reclaim cyanide solution,” said Frank Bergstrom, Echo Bay’s Manager of Environmental Compliance. “Within two months, a water treatment system was designed and installed to address the problem.”

Mindful of growing concerns about environmental hazards, Echo Bay has moved aggressively to produce television advertisements and sponsor studies that could allay such fears.

For example, Echo Bay hired aquatic biologist Jim Buell to conduct an $85,000 study to determine whether heavy metals in the concentrations expected from the A-J Mine would affect the survival rate of salmon fry in a nearby hatchery.

Peering over a 5,000-gallon vat containing 80,000 inch-long fish at the Douglas Island Pink and Chum hatchery, Buell said: “We really put it (heavy metals) to them right around hatching time--exposed them for 15 days. Then we nailed them again for another 15.”

“Now, we are going to put them in seawater and see what happens,” Buell said. “If it can be demonstrated that a mine and hatchery can co-exist, then a lot of peoples’ notions might stand some correcting.”

Bergstrom said that so far, fish exposed to the heavy metals seemed to be “perky little guys.”

A federal biologist familiar with the study, however, questioned the value of the experiment.

“So the fish don’t go belly up in four nanoseconds. What’s that prove?” Nevin Holmberg of the U.S. Fish and Wildlife Service asked. “You need to look at the impact of discharge of heavy metals into an ecosystem over a period of time.”

He added: “The issue is not whether a slug of heavy metals in a tank results in deaths. I’m equally concerned about the effects of these heavy metals throughout the environment.”

Contributing to the controversy are what some opponents call “possible conflicts of interest” that have arisen since the mining company came to town.

The City and Borough of Juneau and a local utility, for example, own the site of the mine and stand to earn substantial royalties from the gold it produces.

And Echo Bay is paying $100,000 annually to the only newspaper in town, the Juneau Empire, to rent the top floor of the paper’s building as its local headquarters.

Marcus Jensen, 82, wonders what all the fuss is about. Jensen was 19 when he rode freight cars and ocean-going barges to find a $7-a-day job shoveling ore into subterranean box cars at the A-J.

“If anyone would have raised these concerns back then, they’d a shipped ‘em out on a barge the same day, so help me God!” said Jensen, who lives in a house he built and has decorated with bear and wolf trophies he has taken over the years.

Laurie Ferguson Craig, a graphics artist who came to Alaska in 1969 to work as a placer miner, sees it a different way.

“I was in favor of reopening the A-J mine until I hiked up to Sheep Creek Valley last summer,” Craig said. “I saw a beautiful cottonwood forest in the gorge, and I saw my responsibility. We don’t have a right to bury a valley in toxic waste.”

Times researcher Ann Rovin contributed to this story.