Teck’s Pogo stuck, Lennard Shelf revival planned

Construction work at Teck Cominco‘s (TEK-T) Pogo gold project in Alaska has ground to a halt after an environmental group’s appeal of a water discharge permit.

The Northern Alaska Environmental Center (NAEC) has appealed the project’s National Pollutant Discharge Elimination System permit previously issued by the Environmental Protection Agency.

The permit is required for construction, and Teck says the appeal could cause a delay of up to a year. Even if the appeal is rejected, NAEC could then take its fight to the courts. Teck says it will meet with Alaska’s governor, state officials, the EPA, and NAEC with the aim of avoiding a lengthy battle.

The delay comes amid pre-construction activities, including road building, and has stymied concrete work for the mill complex, which was set to begin this spring. Teck had budgeted $75 million for development spending in 2004, with most of that earmarked for Pogo.

Teck says the project has been designed to meet the highest possible level of environmental performance, and that it has addressed all concerns raised during four years of review.

Teck owns a 40% stake in Pogo; Japan’s Sumitomo owns the remaining 60%.

Meanwhile in Australia, Noranda (NRD-T) has agreed to take a half-interest in Teck’s mothballed Lennard Shelf zinc mine. Noranda can earn its stake by spending A$26 million. Teck acquired the mines, which were already placed on care and maintenance, from Western Metals in October 2003 for A$26 million. Teck and Noranda are working on redevelopment plan for the assets.

The project is situated in the Kimberly region of Western Australia, an comprises several Missisippi Valley type lead-zinc deposits. It comes equipped with a 3.1-million-tone-per year mill. In the year ended June 30, 2003, two underground mines at Lennard Shelf produced 176,000 tonnes of zinc and 70,000 tonnes of lead in high quality concentrates.