Alaska’s mining industry endures tough year

By Marleanna Hall

This year was a tough one for the mining industry in Alaska, noted RDC board member Karen Matthias, who also serves as the Managing Consultant of the Council of Alaska Producers.

“2013 was not a great year for mining in Alaska . . . investment dollars are scarce, Anglo American left the state, Nixon Fork stopped production, the EPA has been flexing it’s muscles, litigation drags on, and metal prices are down,” said Matthias, who spoke at the RDC Alaska Resources Conference in November.

“But, miners are tenacious, because Alaska has rich potential and we know that mining is an important part of Alaska’s economic future.”

Mining continues to provide 4,800 direct jobs in Alaska, with an average wage of $100,000. These are year round jobs, in 120 communities across Alaska.

But mining doesn’t just provide jobs, it makes $500 million in purchases of goods and services with Alaska businesses.

“More than $2 billion has been spent on dozens of exploration projects over the last 30 years,” explained Matthias. “But we only have six large mines, that gives you perspective of how much goes into mining.”

Matthias highlighted the six large producing mines in Alaska, including metals, minerals, and coal.

The Red Dog Mine, one of the largest zinc mine’s in the world, is a partnership between Teck and NANA Regional Corporation.

The Fort Knox gold mine has 635 employees who all reside in the Fairbanks North Star Borough.

Usibelli Coal Mine is still Alaska’s only operating coal mine. The clean burning coal provides about 40% of energy for heating and electricity in Interior Alaska.

Sumitomo Metal Mining’s Pogo Mine is a world-class high-grade underground gold mine. Last year, Pogo spent $127 million with almost 300 Alaska vendors and contractors.

Coeur Alaska’s Kensington Gold Mine and Helca Greens Creek silver mine are two other underground mines, located in Southeast Alaska. These two mines are the largest private employers as well the largest property tax payers in Juneau.

Many of the advanced projects in Alaska have great potential, and could provide jobs and benefits to local communities. All of these projects face many challenges of the high costs of working in remote areas, from the lack of infrastructure, the high cost of fuel, high transportation costs, and the lack of workforce development. All industries face similar challenges.

Permitting is also a challenge. However, the State of Alaska “has made a real effort to streamlining and improving its permitting process,” said Matthias. “I didn’t say make it easier. We believe that there should be a rigorous process and it should be transparent, consistent and thorough. Unfortunately, as you know, on the federal side, the opposite is true. The EPA’s Bristol Bay watershed assessment was unscientific and unprecedented.”

Matthias noted when the government makes or even considers a preemptive decision it weakens due process, making Alaska and the nation less competitive.

Minerals and metals are in everything people use in everyday life, explained Matthias. However, there is a real disconnect between our everyday use of the products of mining and the mining itself, and the result is public perception can impact mining operations and Alaskan jobs.

“We all need mining,” stated Matthias.

“Whether you work in mining or not,” said Matthias, “help people understand that we need mining, that it can be done responsibly, and it is being done responsibly in Alaska.”

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