Division ex-director made lasting reforms

Alaska's Department of Natural Resources may not have seen the last of Bob Loeffler. When he resigned as director of the Division of Mining, Land and Water in November, it was the third time he had quit the department that he first joined in 1978. He kept returning because he likes the work, Loeffler told Mining News. This loyalty is much like his loyalty to Alaska: He came to the state in 1977 with the U.S. Geological Survey for one year and never left.

The position of director has now been filled by the former deputy director of the division, Dick Mylius, and the ever-humorous Loeffler styles himself "director, emeritus". Loeffler holds a master's degree in civil engineering from Stanford University and a master's in regional planning from Harvard. In his previous hiatus from DNR, in the early 1990s, he worked as planning director for the Exxon Valdez Trustee Council - the federal-state group that disperses funds from the settlement of the Exxon Valdez oil spill.

Looking back on his accomplishments since he became director of the Division of Mining, Land and Water in 1999, Loeffler told Mining News it would be hubris to claim that he alone was responsible for everything. "I was involved with all of them," he said. "Some I directed much more than others. Most of them I accomplished by trusting a lot of excellent staff with details. And most of them involved the cooperation of the Alaska Miners Association."

The largest mining projects that Loeffler worked on during his tenure as director included Illinois Creek gold mine, Two Bull Ridge coal mine, True North gold mine, Pogo gold mine, Greens Creek tailings expansion and Kensington gold mine.

The following overview of other recent achievements was provided by Loeffler:

Modernizing mineral location laws and procedures

• Allowing 160-acre claims to be staked by GPS on the township-range grid.

In 2000, the Legislature passed SB 175.

This changed the law to allow companies to stake up to 160-acre claims using GPS on township range lines.

This is much more convenient for companies staking large claim blocks.

Because it fits into township-range lines, it allowed DNR to computerize its record-keeping.

This, in turn, decreased state costs and, more importantly, enabled DNR to make accurate claim information available to companies within two to three weeks of claim staking.

It reformed the claim-staking system to bring it into the computerized 21st century, while still allowing the traditionally staked claims for those miners who wish to use it.

This is a major change in the way mining claims were staked for over 100 years.

• A cure for abandonment.

The 2003 Legislature passed a new law that allows miners who inadvertently err on some of the mining law procedures to pay a penalty and retain their claims rather than losing them. Previously, procedural or late-payment errors in the way that miners recorded a certificate of location or a statement of annual labor, or paid their rent or royalty, resulted in the miners losing their claims.

• Accepting claim payments in the Recorder's Office.

The regulations were changed, allowing miners to pay for claims in the Recorder's Office. Previously miners would have to record claims in the Recorder's Office, but pay claim fees at DNR Financial Services.

Modernizing reclamation law to accommodate the large mine industry

Alaska's original reclamation law, which took effect in 1991, was designed for placer mines - which were the industry at the time. In 2004, the Alaska Legislature passed SB 283, which changed Alaska's reclamation law to accommodate the needs of large mines. The law:

• Eliminated the upper limit to a reclamation bond of $750 an acre for lode mines (Alaska's large mines). The upper limit still applies to placer mines. Large mines are bonded for their reasonable and probable costs of reclamation, which is routinely more than $750 an acre.

• Provided that interest on the placer mine bond pool be placed back into the bond pool.

• Increased the bonding instruments that companies could use to satisfy Alaska's bonding requirement. As one of the changes, corporate guarantees can now be used as long as the corporation passes tests established in regulation.

• Allowed DNR and the Department of Revenue to establish a reclamation trust fund for individual large mines. This is a mine-specific, interest-bearing account, managed by the state and typically funded by the mining company, to assure reclamation at a specific mine. The first one has been established in the amount of $838,000 for the Illinois Creek gold mine.

Permitting reform

• Institutionalizing the large mine permit process.

While the process was established for permitting of the Fort Knox mine (before I joined the division), DNR institutionalized the large mine team. It became the accepted method of evaluating, permitting and assuring compliance at the large mines. Alaska now has a well-trained, expert team to work on mining that is as good as or better than any in the nation. It provides service to the industry and assures environmental protection for public resources. State experts include those at DNR, the Department of Fish and Game, the Department of Environmental Conservation and the Department of Law.

* Reforming the cumbersome, inefficient coal regulatory program.

When I became director, the coal program was unable to provide an adequate level of service. It was so slow and inefficient that mining companies feared that a new mine could never get through the process. After reform, which included many staff changes, Alaska now has a program that can provide efficient realistic service to the industry and still protect public values. The first example of this change was the Two Bull Ridge mine - a new coal mine at the Usibelli complex that was permitted within one year. Nationally, one year is an efficient process and resulted in an excellent permit for Usibelli Coal Mine and the public.

* Protecting the placer mine bond pool for federal miners.

Federal bonding regulations threatened to eliminate the ability of small miners to operate on federal land by requiring reclamation bonds that were simply unavailable to most small miners. DNR and the Bureau of Land Management worked together to allow the state's placer mining bond pool to substitute for the required federal reclamation assurance.