OFR-35-90 Permitting And Environmental Constraints - Their Impact On Mining In Alaska

This report presents a Bureau of Mines study on the cost of mine permitting and compliance with environmental regulations in Alaska. It discusses permitting requirements and procedures for placer and lode mines. Placer miners must comply with recently established (1988) water quality regulations and effluent treatment requirements. To estimate the impact differing treatment options (no recycle, 100% recycling, and flocculation) have on a placer mine's rate of return, three models (1,500, 1,000, and 500 yd3/d) were simulated. Rates of return for these models show a marked decrease as effluent treatment is increased. The incremental increase in operating cost from one treatment option to the next is relatively small; however the opportunity cost of lost production if' significant and accounts for the decreasing rate of return with increased effluent treatment. Lode mines face greater costs for permitting and compliance than similarly sized placer mines as a result of the impact of the operation. Direct permitting costs for lode mines range from 2 to 6% of total project cost, with 4% the most common figure cited by industry. Total costs for permitting and compliance are approximately double those for permitting. Indirect costs associated with compliance include mitigation, monitoring, and reclamation.