Mining works for Alaska

By Deantha Crockett

Mining Works for Alaska.

The motto of the Council of Alaska Producers (CAP) describes the contributions made by the mining industry to Alaska’s economy and its people, said Mike Satre, Executive Director of CAP and RDC Board member. Satre delivered the mining portion of RDC’s Annual Conference opening segment titled “Alaska Industry 2011 Year in Review and 2012 Outlook.”

Satre provided an overview of the mining industry in Alaska and its economic impact for the year 2010. He indicated Alaska has six large producing mines, as well as 24 projects that each spend over $1 million per year on exploration. Mining provides 3,500 direct jobs statewide, which dispense an average annual salary of $95,000.

Satre outlined the producing mines in Alaska: Red Dog, the world’s second largest zinc mine near Kotzebue, which is operated under a partnership between NANA Regional Corporation and Teck, the Fort Knox gold mine near Fairbanks, the Pogo gold mine near Delta Junction, Nixon Fork gold mine near McGrath, Usibelli Coal Mine in Healy, Kensington gold mine near Juneau, and Greens Creek, a silver mine on Admiralty Island.

Large projects currently being explored in Alaska include the Livengood gold deposit outside of Fairbanks, the Donlin gold deposit in the Kuskokwim region, Chuitna coal project in western Cook Inlet, Wishbone Hill coal mine in the Mat-Su Valley, and the Pebble copper and gold deposit in Southwest Alaska, and Niblack polymetallic prospect in Southeast Alaska, Satre said.

Satre referred to some milestones that occurred in 2011, including Fort Knox pouring its five millionth ounce of gold, the first full year of Kensington operations after almost 20 years of delays, the Red Dog mine expansion into the Aqqaluk deposit that will prolong mine life until at least 2031, and the re-opening of the Nixon Fork mine near McGrath, due to the high price of gold. Additional milestones Satre mentioned were a partnership between NANA and NovaGold to explore the Ambler Mining District, the first assessment of Donlin, estimated to cost $7 billion to bring into production, and the State of Alaska’s commitment to inventory Alaska’s critical minerals opportunities.

Satre noted mining in Alaska does not come without challenges. He stated Alaska is high-risk, with over $2 billion being spent on exploration only to have seven producing mines. Exploration and development is expensive, and the state has an immense lack of infrastructure like roads and power supply. Perhaps the biggest challenge, said Satre, is the public perception that mining cannot exist with other resource industries in the state, which is simply untrue. Satre stated the critical need to develop all resources in tandem in Alaska, and that our resources are not mutually exclusive. He urged the audience to never consider one resource over the other, but rather how to develop both sustainably for the future.

Opportunities, however, do exist in Alaska and attract investors worldwide, Satre said. He said Alaska has vast mineral potential, with much of the state underexplored and the possibility of a huge prospect yet to be discovered. He described Alaska’s permitting process as being science-based, predictable, transparent, and rigorous. “On the state side, what the state can permit, we know what we’re getting into and have a good working relationship with state regulators,” Satre said.

Satre explained that Alaskans are very supportive of the mining industry, with over 80% of citizens who recognize the industry’s contributions to the state economy.

“Existing mines in Alaska are a model for responsible resource development,” Satre said. “With high commodity prices and an Administration and groups like RDC that support us, we want the opportunity to work in Alaska and want to make sure our industry will work for Alaska in the future.”

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