Army Corps of Engineers denies IPOP permit to mine
By Diana Haecker
On Friday afternoon, the U.S. Army Corps of Engineers announced its decision to deny regulatory permits for IPOP LLC, effectively nixing IPOP’s plans to mine for gold and dispose of material in the wetlands and waterways of Bonanza Channel and Safety Sound.
“Today’s action is reflective of an exhaustive permit review process,” said Col. Damon Delarosa, commander of the Alaska District said on Friday. “On top of extensive consultations with our sister agencies and tribal partners as well as collecting the public’s input, the applicant failed to adequately show that their proposal is the least environmentally damaging practicable alternative.”
According to the Army Corps, nationwide, less than one percent of all requests for Corps permits are denied. “Those few applicants who are rejected usually have refused to change the design, timing or location of the proposed activity,” a press release announcing the decision said.
IPOP proposed to dredge for gold over a six-year period, moving nearly five million cubic yards and disposing material in 192.5 acres of the Bonanza Channel, a waterbody that includes “special aquatic sites.” Work would’ve included construction and dredging of mining channels in the estuary, a man camp and a staging area. The dredging was proposed to be done with a 36-inch cutterhead drill. The project’s stated purpose was to economically produce gold from IPOPs mining claims in the Bonanza Channel. However, IPOP had other purposes in mind that it didn’t disclose to the Corps, but which were outlined in a prospectus for potential investors. These plans included a reality TV show called “Rivers of Gold” and associated merchandise. IPOP, in a June 2019 letter to the Corps denied that it had plans for a reality TV show, the manufacture of gold jewelry and other merchandise. “While IPOP stated that their purpose was to economically recover gold and explore for additional pockets of gold within their claims, in their March 20, 2019 application, for purposes of understanding the applicants proposed project purpose, it should be noted that on May 20, 2022 IPOP LLC, and other plaintiffs, including Rivers of Gold, Global TV Show and Global Merchandising LLC filed suit against the Corps in the U.S. District Court for the Western District of Louisiana to compel agency action on IPOPs permit application,” says a Corps document.
The Corps’ 157-page long decision document provides detailed information on the timeline of the proposal, detailed agency comments and substantive public comments that weighed in on the decision.
In a letter dated Sept. 8, to IPOP’s Beau Epstein, Col. Delarosa wrote, “We have thoroughly reviewed your comments, those received from the Federal and State agencies responsible for the protection of water quality, fish and wildlife, and environmental values, and those received from other interested parties. Several of the resource agencies objected to your proposed work. They have maintained their objections after considering your reclamation plan and revised proposal.”
Delarosa listed factors that played into the Corps’ decision: conservation, economics, aesthetics, general environmental concerns, historic values, fish and wildlife values, land use, recreation, water quality and the needs and welfare of the people, among others.
After evaluating the proposal and comments received, Delarosa said, “I have determined that the project proposal fails to comply with Section 404 of the Clean Water Act, in particular, the proposed project is not the least environmentally damaging practicable alternative. Additionally, I find the issuance of this particular permit would not be in the public interest with regards to recreation.”
Agency comments
The Corps’ decision document states that the proposed project would be the first suction dredge mining operation of this scale in an estuary. Early on in the permitting process, it was determined that it required a so-called Individual Permit, which required a more rigorous permitting process.
A common thread in comments from federal regulatory agencies was the lack of substantive information from IPOP and coherent plans.
The applicant has first proposed their mining plans in March 2018, with principal Ed Epstein in a promotional video saying that mining would begin in summer 2018, despite having no permits in hand to do so. Since then, the project received state permits to conduct surveys to locate and quantify the resource and to conduct baseline studies.
After amending their permit application three times, with changes to claims mined, purpose (which included at one point mercury removal) they proposed to mine concurrently while conducting a “case study” to collect scientific data. “By proposing such a study, the applicant shows they do not have enough information to provide to the Corps to make conclusions regarding the potential impacts to waters of the U.S. which is necessary for the Corps to determine compliance,” reads the decision document.
Is there even gold? According to the Corps, IPOP has not proven that the resource is there as stated in their 2020 Narrative. “At the time of this decision, 13 core samples have been collected with gold results homogenized, despite the applicant receiving authorization to conduct up to 502 survey cores,” reads the document. “Other publicly available sources of information do not indicate the presence of mineral resources along the Bonanza River or in Bonanza Channel,” the Corps says, citing USGS documents.
Subsistence
IPOP’s agent Yukuskokon Professional Services stated that there is no official record of subsistence use in the area, “due to the absence of people in the vicinity of the project, subsistence concerns should be given no weight,” argued the applicant.
The Corps disagreed. “Based upon available information, the Corps has determined that the project would impact subsistence opportunities,” the document says. “The applicant’s assessment contains no substantive discussion of subsistence and the applicant provided no measures to minimize impacts to subsistence resources or user as they believe none exist in the project area.”
The Safety Sound, Nuuk and Solomon area are dotted with subsistence fish camps that clearly stand witness to the area used for summer subsistence activities.
“Information regarding subsistence was provided by local community members in the Nome and Solomon areas[…] Information shared by the community included descriptions of subsistence as not just a means for food security, but also for its cultural significance and way of life,” summarizes the decision paper.
“Based on the presence of seasonal fish camps information received in response to the public notices and during Tribal consultations,[…] the Corps has determined that the proposed project would directly impact subsistence users and resources – specifically fish, birds and other animals within the range of noise disturbance from the operations.”
EPA, the U.S. Fish and Wildlife Service and the National Marine Fisheries Service in their comments recommended the preparation of a full-blown Environmental Impact Statement. In The EPA was “concerned with the project’s potential for significant environmental impacts from dredged material disposal,” and voiced concern about the mining impacts, the lack of scientific design in the so-called “case study” and the lack of a complete and detailed project description. It stated that the Bonanza Channel intertidal estuary was one of the “highest functioning resources.”
The EPA also questioned why practicable alternatives were eliminated by the applicant. Why did they not pursue – like other gold mining operations in the region – offshore mining, or other inland mining locations?
IPOPs response: They were not aware of any other least environmentally damaging practicable alternative. “IPOP explained that it would be unreasonable to identify other gold deposits, as they have conducted an analysis of their claims. IPOP concurred that providing socio-economic benefits to the Nome Community is not part of the project purpose, however, they want to be considered as a benefit. IPOP continues to disagree with the Corps’ overall project purpose and believes it does not give adequate consideration to the applicant’s purpose.”
The Corps also found the reclamation plan insufficient.
“The Corps is neither an opponent nor a proponent of any project,” said Sara Longan, acting chief of the Alaska District’s Regulatory Division. “We owe the public a thorough review and a timely decision, which is the last milestone that we find ourselves.”
Does the denial mean the project is dead?
Army Corps Public Affairs Specialist John Budnik told The Nome Nugget that the applicant still has appeal rights and can choose to litigate. “However, they cannot apply for a permit with the same project parameters,” Budnik said in an email. “They can apply for a different project and the permitting process would start over.”
If IPOP chooses to appeal the decision, then the action goes through an administrative appeals process and the USACE – Pacific Ocean Division reviews the permit decision.
Lawsuit still ongoing
Meanwhile in Louisiana, two elderly investors, Edward and Elaine Abell, along with IPOP and Rivers of Gold, continue to fight the Corps in federal courts. They filed a civil lawsuit in May, alleging that the Corps was creating “outrageous delays” in its permitting process.
The plaintiffs filed the lawsuit in the U.S District Court for the Western District of Louisiana. Their basis for choosing that location was that the two investors listed on the lawsuit were Louisiana residents.
In a motion filed on July 25, the Corps requested that this court battle be transferred to the U.S. District of Alaska.
In a response filed on August 29, the Abells and IPOP argue to keep the lawsuit venue in Louisiana “in the interest of justice to avoid local permit discrimination as the cultural, social, political and economic forces Alaska, that are dominated by IPOP’s Alaska based mining competitors who oppose the granting of the referenced permit, create a situation where IPOP is unable to obtain a fair hearing of the issues alleged in the Complaint if the case is transferred to Alaska.”
The 134-page filing contains the belief that the Corps is “required” to process a permit application within 60 days of receipt and that IPOP’s application was delayed for political reasons.
The bizarre legal filing includes allegations that “local mining companies owned by Alaska Native Corporations control the press, cultural, economic, regulatory and political process in Alaska and are fixated on putting IPOP out of business as they are a non-Alaskan owned mining operation that directly competes with them.” Furthermore, the filing has IPOP principal Ed Epstein explain that “Alaska is controlled by the power and influence of a series of regional, for-profit corporations established under the Alaska Native Claims Settlement Act.” In a misinterpretation of ANCSA, the filing says Congress “donated” the property rights to 39.8 million acres to “these” Alaska Native Corporations. The unusual legal filing goes on to say that Bering Straits Native Corporation is a direct competitor of IPOP and “has led the charge for lobbying the Corps of Engineers to not provide IPOP with a permit.”
The court filing also targets Solomon Native Corporation, alleging “competing gold mineral interests adjacent to IPOP,” Kawerak Inc. and NSEDC.
Airing even more grievances, the filing alleges that the Army Corps’ project manager Leslie Tose has “conspired” with the Alaska Native Corporations to “create a public relations campaign STOP IPOP and to feed misinformation to the press that they control.”
The filing includes articles published by The Nome Nugget and news pieces aired by KNOM, alleging that these news items “disparage the IPOP proposal” and characterize the reporting as a “continual stream of misinformation.”
The filing then states that “this misinformation campaign was orchestrated by the Alaska Native Corporations, mining competitors of IPOP, with the goal of forcing IPOP to abandon its mining claim and equipment.”
UPDATE: The lawsuit was dismissed on Wednesday, Sept. 14.
