OPINION: Alaska’s under-the-radar mining boom

It hasn’t gotten a lot of notice, but Alaska miners are going gangbusters this summer. The state’s producing mines are doing well, and advanced exploration is underway at a number of significant new projects.

A lot of people are at work. It’s significant that workers many of the new prospective mines are in regions near Alaska Native villages and employ people from those communities.

The jobs pay well, too. Average annual salary for a job in mining these days is $110,000, according to the Alaska Miners Association.

The largest of the prospective new mines is Donlin Gold, a discovery near the village of Crooked Creek near the mid-Kuskokwim River.

It can take decades to bring a mine to production and exploration has been underway at Donlin Gold for decades. The find was made in the 1970s by geologists working for Calista Corp., the Alaska Native Regional Corporation for Southwest Alaska. Serious exploration has been underway since the 1980s, and still is.

Calista owns the mneral rights and the surface lands are owned by The Kuskokwim Corp., a consortium of Native village corporations in the area. If a mine is built Donlin Gold will be one of the largest gold mines in the world. Seventy percent of mining royalties will be shared with other Alaska Native corporations under terms of the Alaska Native Claims Settlement Act, a 1971 congressional act under which Calista and TKC obtained their lands.

The mining firms involved, Barrick Gold, a major mining company, and NovaGold, a smaller “junior” mining company that led the early exploration, are spending $60 million this year and have hired about 150, most of them local. This is the largest summer field season to date for Donlin Gold. The exploration data gathered will be used in a final investment decision on whether to build a mine.

The importance of this should not be underestimated. The Yukon-Kuskokwim region is one of the more economically depressed parts of the state.

There’s also a lot of activity in Northwest Alaska on two projects, with 190 employed between both. One is at new zinc finds a few miles from the existing Red Dog lead and zinc mine, which is north of Kotzebue. Red Dog has been producing zinc and lead since 1989 and is the largest zinc mine in the world.

NANA Regional Corp. of Kotzebue owns the land and resources at Red Dog and also shares 70% of royalties to other Native corporations. Red Dog employs a lot of local people at the mine and with NANA-owned contractors that support mining.

It’s known that the region holds other lead and zinc deposits that could be developed as the ore at Red Dog is depleted. Sure enough,Teck Resources, the operator at Red Dog, has found more zinc and believes two of these discoveries could become producing mines on their own.

Infrastructure built for Red Dog, mainly the mill to process ore and a road and port dedicated for seasonal shipping, will help in bringing these new deposits into production.

If these deposits prove out they will sustain the current mining jobs in the region and revenues paid to the North West Arctic Borough that supports schools.

A third area of intense exploration this summer is in the Ambler Mining District in the upper Kobuk River region east of Kotzebue.

This is another decades-old project. Kennecott Copper, a historic mining company that got its start in Alaska at the Kennecott copper mine near McCarthy, made this copper find in the 1960s and exploration has been underway since.

NANA is involved in this, too, having bought the first discovery, Bornite, from Kennecott. Kennecott also found a higher-grade prospect at Arctic, which is in the region. The mining companies now involved are South 32, a major Australian company, and Trilogy Metals, formerly NovaCopper, a “junior” exploration company.

Typically, smaller junior companies lead exploration and bring in larger mining companies later as a partner. NANA has an option to be involved in all this but for now its subsidiaries will be busy supporting the work.

South 32 and Trilogy are spending $26 million this summer through their joint-venture company, Ambler Metals, which is similar amount was spent last year.

Other exploration is underway including one east of Delta, Manh Choh, a gold discovery on lands owned by the Tetlin Native village corporation east of Delta. Kinross Gold, which also owns the large Fort Knox gold mine near Fairbanks, is working with Tetlin to develop Manh Choh.

Nearer to Anchorage, Nova Minerals, another Australian company (no relation to NovaGold at Donlin) is exploring a significant gold discovery in the western Matanuska-Susitna Borough.

Meanwhile, Alaska’s producing mines collectively employ almost 3,000 Alaskans. These are Red Dog, Fort Knox and Pogo, another Interior gold mine; the Usibelli mine near Healy, the state’s only coal mine and, near Juneau the Kensington gold mine and Greens Creek silver, gold and zinc mine.

This is a stable industry with potential to grow. A recent study by the Institute of Social and Economic Research at the University of Alaska Anchorage estimates that under reasonable scenarios mining employment could double in the next two decades to over 7,000.

Alaskans worry about the future of the state’s natural resource-based industries, particularly our mainstay oil and gas. Fisheries is always boom or bust (this year is seeing both, in different areas). Tourism, which I see as based on natural resources, the beauty of our landscape, has had its ups and downs.

But the foundation of all this is the land, and Alaska’s good fortune is that it has good rocks for finding useful things including metals like copper and critical minerals like zinc and rare earths that are important for the transition to renewable energy technologies.

According to the ISER study, released last March, Alaska already produces 80% of the nation’s zinc and half of U.S. silver production. If copper in Northwest Alaska is developed, the state could produce 9% of that strategic metal, ISER says.

Meanwhile, legacy fossil fuels such as natural gas have a role in the transition to a renewable hydrogen energy economy. Alaska’s Department of Natural Resources and the Alaska Gasline Development Corp., the state’s gas corporation, are working on that.

Given all this, let’s not moan and groan about the economic uncertainties we face. Those are certainly there, but in sum, I’m pretty upbeat about Alaska.

Tim Bradner is publisher of the Alaska Economic Report and Alaska Legislative Digest.

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