Thank you for the opportunity to speak today. I am honored and privileged to talk to you about the people I serve, who are the owners of NANA Regional Corporation, the Inupiat people of Northwest Alaska, and to talk about business and development, both in our past and in the future.
I live in Kotzebue, which is the headquarters for NANA Regional Corporation. As we speak, the people of our region are getting ready for a busy summer season. They are getting their boats ready and making final repairs on nets and equipment. The ice is finally going out in Kotzebue Sound and hunters are looking for ugruk and beluga. This is the beginning of our harvest, gathering of our foods as we have done for hundreds of years. My ten year old grandson has hunted his first seal and the dried seal meat and seal oil will be shared with pride.
NANA shareholder students have begun their summer internships; some on the slope, others at sites in Anchorage, the lower ’48 and at the Red Dog Mine, where 51 temporary summer workers, all NANA shareholders, including 14 college students will be assigned to environmental, office, port and mine operations and human resources positions. 14 additional shareholders who are students at Alaska Technical School are also working as temporary employees.
NANA region villages are in the news.
A recent Wall Street Journal article addressed the high cost of fuel, which this winter was $8.10 per gallon in Shungnak. On a barge somewhere to the south, natural gas drilling equipment is headed for Red Dog. Our partnership, NANA Major Drilling, will hopefully help find lower cost and cleaner burning fuel which is desperately needed in the NANA region. A group of NANA shareholders has been training all winter down in Nevada so they can go to work as drillers and drillers helpers not just in Alaska, but anywhere in the world where there is mining activity. Also, over at Red Dog Mine, Teck Cominco has started a 30 million dollar project to build a back dam, and they also have helicopter supported mineral exploration underway this summer. They are hoping to find another Red Dog and we at NANA hope they do.
There is so much activity going on at Red Dog this summer that the main camp has run out of space and they have had to re-open the old construction camp. We like this at NANA for several reasonsfirst, our company, NANA Management Services will be running the camp, and second, there are numerous job opportunities for our shareholders and other Alaskans on these projects.
Other NANA companies are as busy as they ever have been on the North Slope, where our engineering company, NANA/Colt has the contract for engineering services all across the slope. Purcell Security is involved in testing the oil transit lines and they have beefed up their workforce with shareholders from our villages.
NANA Management Services is providing a safe and comfortable living environment for the workers on the slope, just as they have been since the days of the pipeline construction.
Working out of Anchorage, NANA companies like DOWL Engineers, ASCG Incorporated, and hotel group, which runs the Courtyard, SpringHill Suites and Residence Inn are all operating at full speed and helping us fulfill our mission.
This year, NANA will surpass $1 billion in revenues. We will have employed more than 7000 people throughout Alaska and other parts of the United States, and we have operations in Antarctica, Guam, Korea, Spain, and even France.
We use our profits to fulfill our broader mission. In addition to paying dividends to our shareholders, we also support cultural programs, job training, scholarships, internships, as well as numerous services to our shareholders and the communities where we live and work.
NANA has been involved in resource development from the beginning. It was clear to our leaders 35 years ago, that the place in Alaska to develop profitable business with jobs that can sustain families is in the resource industries.
But just like people all over the world who consume resources, it is one thing to buy gasoline at the corner gas station or to use a car that contains zinc in its components, and it is another thing to actually develop those resources in our own back yard.
When NANA made the decision to move forward and establish a partnership with a Canadian firm and develop Red Dog Mine, we did it with considerable forethought and discussion. People were concerned about environmental issues and how the activity would impact the caribou migration. They talked about the new people who would come and how cultural differences would change our people. They talked about jobs and they were concerned that the only opportunities seemed to be far away from our region.
Our leaders believe that the best way to improve the lives of our shareholders is through jobs. That is why when we weighed the positives and negatives of developing the Red Dog Mine in our region we were willing to accept the change to our lifestyle that has come with that decision. After ten years of discussion the question was put to a vote, and our shareholders voted to pursue the development of Red Dog.
The mine opened in 1989. Since then, more than 1100 shareholders have worked in some capacity at Red Dog. Our agreement with Teck Cominco is to develop a workforce that will one day be responsible for the full management of the mine. To that end, we have an Employment and Training Committee made up of senior level staff from both Teck Cominco and NANA. Together with the Northwest Arctic Borough School District, Alaska Technical Center, the Chukchi Campus of the University of Alaska, and the University of Alaska’s ANSEP program we work to strengthen and develop the workforce of today and the future. A millwright training program through the Alaska Technical Center has produced numerous shareholder millwrights, and we are gradually seeing our shareholders become trainers and supervisors. College-bound students are supported through scholarships and some are able to alternate between work at the mine and going to college. The result is that we now have several shareholders with engineering and business degrees that are relevant to the mining business. More than half of the workforce at Red Dog are NANA shareholders and as our people gain more training and education, we expect to see our own people take leadership roles.
Environmental oversight and the protection of our subsistence harvest is another critical part of what makes our relationship with Teck Cominco work. The closest villages to Red Dog are Noatak and Kivalina. Eight people are selected by the elders of those villages to serve on the Subsistence Advisory Committee, which directs a regional caribou-monitoring program as well as other activities such as the careful scheduling of shipping to minimize effects on the whaling and seal hunting seasons. Red Dog Mine operates under an Environmental Management System based upon stringent EPA standards and Red Dog is was the first zinc mine in the U.S. to achieve the even more strict certification by ISO 14001. The Subsistence Advisory Committee is involved in ensuring those standards are maintained.
So, what have we been able to accomplish through Red Dog?
First, our goal for the mine to become 100% NANA shareholder operated is still a dream for the future. We need many more people to receive the education and training required to operate and manage a facility of Red Dog’s scope. But we are making progress and we intend to get there some day.
Red Dog Mine is the main source of funds for the Northwest Arctic Borough. The Borough receives $8.6 million in annual payment in lieu of taxes from the mine. Money from Red Dog has been used to fund new schools, renovations, scholarships, and to generally make it possible to provide services to the NANA region shareholders.
Red Dog is the biggest employer in the NANA Region. $18.6 million in wages were paid to shareholders working at the mine last year.
NANA businesses earn revenues from Red Dog by providing support services. We handle the care and comfort of employees through NANA Management Services, we truck zinc to the port through NANA Lynden, we provide drilling through NANA Major Drilling, soils testing by Alaska Testlab, oil products through NANA Oilfield Services, security through Purcell Security, engineering by DOWL Engineers, NANA/Colt, NANA/Pacific and ASCG; drug testing by WorkSafe, training by NANA Training Systems, and temporary workers through NANA Employee Leasing. As we have developed expertise over the years, we are now able to supply many of the services necessary to support the mine’s operation.
Something that perhaps is not fully understood or appreciated by the general public is the financial contribution that Red Dog makes to all other Native communities in the state. 62% of all royalties received by NANA are distributed to all other Alaska Native Corporations. So it is in everyone’s best interest to see the Red Dog Mine’s success.
While royalties can make a contribution, remember, short five years ago the price of zinc was at 35 cents a pound and the mine was not covering its expenses. Today, with the price of zinc in the $ 1.70 per pound range the value of royalties has increased considerably and our shareholders will appreciate receiving some of those royalties as dividends. But we have learned that with fluctuating commodity prices this year’s bounty can not necessarily be counted on for next year.
Red Dog Mine has helped NANA mature as a corporation. We have designed our business strategy to serve Red Dog and in doing so, we have expanded the services we are able to offer elsewhere.
What else have we learned?
We have learned that outside environmental interest groups will take advantage of our people to further their own goals and to raise money for their own organizations. Our villages do not benefit from the actions of these organizations, and unfortunately we expect to be fending off such groups for the duration of our mine project.
We have learned that it is possible for a Native corporation to respect the land and our traditional culture while involving ourselves in resource development. I am not saying it is not a challenge, because it is a challenge every day. But if you ask me if it is worth it, I would have to say yes. As a shareholder of NANA Regional Corporation I remember the early discussions about whether we should develop the mine. I was against it because of my concern about whether it could be done in a way that also protected the environment and our subsistence way of life. Change is difficult. We would all prefer that the world stay the same. But as we are experiencing as we see the natural cycle of global warming take its effect and as we watch our young people grow up with an interest in technology and skills that are new to us, we realize that the work we do can serve everyoneour elders, our youth, today’s adults, and not just our own interests, but also the broader community here in Alaska and throughout the world.
We are NANA, the company that talks about doing business in Alaska for 10,000 years. Trade, commerce and the use of our natural resources to sustain our people and families have always been a part of Inupiaq culture.
Today, our lives are balanced between our desire to maintain the traditional skills and values that it takes to live off the land, while gaining the knowledge and expertise required to do business on a global level. We simultaneously concern ourselves with issues related to the subsistence harvest, while also making sure that our people receive the education and training they need to survive in today’s world.
Unlike most businesses, we have a broader mission than just making money to accomplish short-term goals. We also work to improve the quality of life for our people by maximizing economic growth, protecting and enhancing our lands, and promoting healthy communities.
Just as our land and culture have always sustained our people, we are building a corporation that will also sustain us forever. We will not be acquired. We will not be dissolved. And we will work to ensure that our land can sustain our people now and in the future.