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ANCHORAGE, Alaska, Oct 16 (Reuters) - The world's biggest zinc mine is on the verge of growing even bigger, with federal and state approval of a major expansion expected imminently. The Red Dog Mine in northwestern Alaska, operated by Teck Resources Ltd (TCKb.TO) on land owned by the region's native Inupiat Eskimo people, would be allowed to start processing ore at a new site that would effectively double the 20-year-old mine's lifespan, under the pending permits. Since the mine opened in 1989, Teck has processed about 1 million tons of zinc and lead annually from ore pulled out of the original Red Dog mine pit. The operation above the Arctic Circle has infused money into a remote region where cash-paying jobs are scarce. Now Teck and NANA Corp, the Inupiat company that owns the Red Dog property, are seeking to expand mining into an adjacent and relatively newly discovered ore body called Aqqaluk. The name honors Robert Aqqaluk Newlin, the original president of NANA Corp. That expansion -- contingent on several federal and state permits -- is needed to keep Red Dog from shutting down in 2011, company officials say. "We need the ore to continue to provide feed to our plant," said Jim Kulas, Red Dog's manager of environmental and public affairs. "After 2011, where we're mining now will be totally exhausted." The major permits needed for the expansion are a wastewater-discharge authorization from the U.S. Environmental Protection Agency and a wetlands-fill authorization from the U.S. Army Corps of Engineers. The EPA, after two years of formal review, issued a final report on Oct. 9 saying it planned to approve the Red Dog permit application. The final permit could be issued as early as December, after a 30-day public-comment period and a 30-day administrative appeals period expire, said Patty McGrath, the EPA regional mining coordinator managing the review. Kulas said the wetlands permit from the Corps is also expected soon, as are associated state and local permits. The mine operators hope to start working on the Aqqaluk deposit in early 2010, he said. "As soon as we get the authorization to get into the area, we will," he said. "The sooner we can get into the Aqqaluk, the better." Red Dog may be able to meet that schedule, McGrath said. "I believe it's realistic if there aren't appeals of our permit or the Corps permit or any of the other permits," she said. Red Dog, and its planned expansion, has the backing of Alaska's political and business establishment. The mine is cited as an Alaska success story, producing income and creating jobs and careers for indigenous residents who might otherwise be impoverished. But environmentalists and some neighbors say the mine's record is spotty, inflicting years of harm on the fragile Arctic environment. They point to studies finding that harvests of caribou and beluga in the vicinity of Red Dog have fallen to less than half of pre-mine levels. Red Dog has been cited in the past by federal and state regulators for improperly releasing sediments and metals into the water and air. The most recent case was settled last month, when Teck agreed to pay $120,000 to settle a series of wastewater-discharge violations alleged by the EPA. Residents of Kivalina, a village of 400 downstream from the mine, were embroiled in a years-long dispute over discharges into the Wulik River, the local drinking-water and fish source. Villagers filed a lawsuit accusing the mine of thousands of Clean Water Act violations. In a settlement deal stuck a year ago, Teck pledged to spend up to $120 million on a pipeline to carry wastewater directly to the Chukchi Sea, bypassing the river. The company also pledged to pay for widespread water-system upgrades in Kivalina. In exchange for those commitments, the villagers are supporting the mine expansion. As long as "Red Dog carries out their end of the deal, it's OK," said Enoch Adams, a local leader and one of the lead plaintiffs in the water-pollution case. (Reporting by Yereth Rosen; Editing by Bill Rigby and Christian Wiessner)
