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Operators give Alaska mining updates

May 3rd, 2011 | Alaska Newspapers Staff Print this article   Email this article  

Representatives from Southeast, the Northwest Arctic and places in between offered project reports on all the major mining operations in Alaska during presentations in Anchorage this week.

It even included a mine that isn't.

"We're not a mine, yet," Mike Heatwole, vice-president of public affairs for Pebble Partnership LLC, told the luncheon crowd at the Anchorage Chamber of Commerce meeting on Monday.

In 2011, the partnership is spending $91 million toward becoming a mine that will employ 1,000 in the Bristol Bay region and extract copper, gold and molybdenum, Heatwole said. That money is for environmental studies, engineering work and administrative services. The focus of this year's work is to define a development plan for Pebble. A part of that, an environmental baseline document that is expected to be upwards of 20,000 pages will be released in the next couple of months, he said.

Another project that's not yet a mine is working on its energy plan this year. The Donlin Creek prospect will be completing its feasibility study by this fall, said Stan Foo, general manager of Donlin Creek LLC, and it will include costs for a natural gas pipeline beginning at Cook Inlet. Foo said the delivery of energy to the remote mine site is key, since it is located in the Yukon-Kuskokwim Delta with the nearest community being the 105-population village of Crooked Creek 15 miles from the prospect.

A dedicated, buried gas line is a preferable alternative to bringing diesel to the mining site by barge, he said. And establishing a gas line as an industrial user could offer benefits to other communities interested in tapping into the source, he said.

If the resource is developed into a mine, the more than 1 million ounces of gold it would generate annually would make Donlin the biggest gold mine in the state, Foo said.

But first Donlin will need to pass through project permitting, anticipated in early 2012.

Until then, the largest gold mine in Alaska is Fort Knox, which realized its 5 millionth ounce of gold poured last month.

The operation near Fairbanks has been worth its weight in precious metals to the community, according to figures provided by spokeswoman Lorna Shaw. The mine works with more than 500 Fairbanks companies, and 60 percent to 70 percent of its annual operations spending is local. Last year, total operations spending was $186 million, Shaw said.

Fort Knox is currently slated to mine and mill gold through 2017. However, that could change. An active exploration program gives hope for work for some of the 500-plus employees to work beyond that date, Shaw said.

Gold and Greens Creek

Ron Plantz, president of the mining trade group Council of Alaska Producers, gave general overviews on the Kensington gold mine and Greens Creek silver mine in Southeast as well as the Pogo gold mine in the Interior.

He touted Greens Creek, which began operations in 1988, as an example of mining in harmony with nature.

"We have 1,500 brown bears on a 1,500-square-mile island," Plantz said of the Admiralty Island location. "I can't imagine a mine in a more pristine place."

Greens Creek, the largest private sector employer in Juneau, is looking to get bigger. It's going through a National Environmental Policy Act review that aims to expand the mine's tailings pile by 200 acres, Plantz said.

Pogo, located 85 miles southeast of Fairbanks, has been in operation since 2006 and has a

life projected at 10 years. Kensington began operations only last July.

The Red Dog mine in the Northwest Arctic Borough got a new lease on life last year with permitting approval to develop the Aqqaluk deposit adjacent to the exiting mine. This ensures operations for 20 more years, said Wayne Hall, spokesman for Teck/Red Dog.

"This means the continuation of jobs in Northwest Alaska and elsewhere," Hall said.

Of the 242 companies that Red Dog works with, 79 percent are in Anchorage, he said.

On a world scale, Red Dog dropped to the No. 2 producer of zinc last year behind a mining operation in India. It's producing 4.4 percent of the world's supply now.

Nevertheless, the impact in Alaska is still great. Fifty-six percent of the mine's employees are locally hired NANA Regional Corp. shareholders, said Lance Miller, vice-president of resources with NANA.

The impact is spread wider to Alaska Native regional corporations, who share in Red Dog's wealth through the 7(i) provision of the Alaska Native Claims Settlement Act. The provision provides for 70 percent revenue sharing among the corporations of natural resource wealth. Last year, Red Dog's portion via the NANA Regional Corp. gave $82 million to other regional corporations, Miller said.

"We really need to support rural resource development because it comes back to Anchorage," Miller told the chamber of commerce audience.

At the end of the presentation, a question from the audience asked Heatwole of Pebble about the potential for environmental damage from the mine. Heatwole pointed to the Pogo mine, located at the headwaters of the salmon-rich Copper River delta, and noted that it came into being when permitting wasn't so stringent, and there haven't been any problems.

He also noted what the absence of mining economics is doing to Bristol Bay now.

"They are paying 87 cents a kilowatt hour," he said. "If electricity cost that much in Anchorage, there'd be rioting in the streets."

And with shrinking economic opportunities, families leave the region, he said. Last year, Pedro Bay's school shut down when the number of students fell below 10.

"And when the school goes, so goes the rest of the community," he said.


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