ALASKA'S MINING INDUSTRY
BACKGROUND  •  FACTS  •  PRODUCTION  •  EXPLORATION
LINKS  •  SOURCES
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BACKGROUND

Historically, mining has been a cornerstone of Alaska’s economy and is a growing force economically today, providing jobs for thousands of Alaskans and millions of dollars of personal income. Many roads, docks and other infrastructure throughout Alaska were originally constructed to serve the mining industry. Major communities like Fairbanks, Juneau, and Nome were founded on mining activity. Vital infrastructure including renewable energy sources like hydro plants in Southeast Alaska, was built on mining.

Today, a rejuvenated mining industry brings a broad range of benefits to Alaska, offering some of the highest paying jobs in both urban and rural Alaska, as well as generating significant local government tax payments and royalties to Native corporations for activity on their land.

Alaska’s mining industry includes exploration, mine development, and production. The industry produces zinc, lead, copper, gold, silver, coal, as well as construction minerals such as sand, gravel, and rock. Alaska’s six large operating mines (Fort Knox, Greens Creek, Red Dog, Usibelli, Pogo, and Kensington) provided 2,400 full-time jobs of the nearly 4,500 mining industry jobs in Alaska in 2018. Direct and indirect jobs totaled 9,200, paying $715 million in payroll. These jobs are mostly year-round for residents of nearly 60 communities throughout Alaska, half of which are found in rural Alaska where few other jobs are available.

In addition to jobs, mining creates public revenue by paying state and local taxes. Mines help support local economies with mining companies serving as the largest taxpayers in the City and Borough of Juneau, the Fairbanks North Star Borough, and the Northwest Arctic Borough, and important tax payers in rural communities like Denali Borough and the City of Nome.

Worldwide interest in Alaska’s mineral potential continues. The State estimates the mining industry spent $135 million on exploration in 2018. Driving interest is demand for metals, primarily from Asian countries like China, Japan, and India. Development spending in Alaska in 2018 was $170 million and the export value from Alaska production was $1.8 billion. 

Additionally, the mining industry accounted for $34 million in local government revenue and $149 million in state government revenue in 2018. The industry also paid $358 million in payments to Alaska Native corporations.

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FACTS & ECONOMIC IMPACT

  • In 2018, the cumulative production value of Alaska’s mining industry was approximately $2.2 billion, divided between exploration and development investments, and the gross value of the mineral products. Minerals produced included zinc, gold, silver, lead, copper, coal, rock, gravel and sand.

  • The industry spent an estimated $135 million in Alaska mineral exploration in 2018. Previously, exploration spending in Alaska has accounted for a large percent of the total exploration monies spent in the U.S. each year.

  • In 2018, the industry spent an estimated $170 million on mine construction and development at existing mines in 2018.

  • Minerals are Alaska’s second largest export commodity. Mineral exports accounted for 36% of the state’s export total in 2017, with a value of $1.8 billion, consisting primarily of zinc and lead from the Red Dog Mine. Relatively strong prices for zinc have helped to sustain the high level of mineral export values over the past several years, as has the historically high prices received for lead.

  • Total direct and indirect jobs attributed to the mining industry in 2018 was 9,200 with a payroll of $715 million. The mining industry provides some of Alaska’s highest paying jobs with an average annual wage of $102,000, twice the state average for all sectors of the economy.

  • Mining industry payments to municipalities is estimated at $34 million in 2018, and royalties and other fees paid to the State of Alaska was estimated at $149 million.

  • The industry paid $15.9 million to the state-owned Alaska Railroad Corporation for shipments of coal and gravel, and $28.2 million to the Alaska Industrial Development and Export Authority for use of state-owned facilities, primarily the Delong Mountain Transportation System from the Red Dog Mine to its port on the Chukchi Sea and the Skagway Port Terminal. The industry also paid $1.6 million to the Alaska Mental Health Trust for rents and royalty payments in 2018.

  • In 2018, Alaska’s mining industry provided $358 million in payments to Alaska Native corporations, benefiting all regional and village corporations through the 7(i) and 7(j) royalty sharing provisions under the Alaska Native Claims Settlement Act.

  • Approximately 200 active Alaska placer mines produced 41,295 ounces of gold with a gross production value of $52 million 2017. In addition to Alaska’s active precious-metals mining industry, there were more than 120 active rock quarries, and sand and gravel operations throughout the state producing at least $12 million in materials on state lands in 2017.

  • Mining in Alaska involves a rigorous permitting process.  When a plan is put forward for permitting, a multi-year process, involving 11 federal and state government agencies, over 60 individual permit requirements, and multiple and ongoing opportunities for public input begins.

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MAJOR PRODUCTION SITES

  • The Northwest Arctic Borough is home to Teck and NANA Regional Corporation’s Red Dog Mine, the largest lead and zinc concentrate producer in the U.S. Red Dog, one of the largest zinc mines in the world, both in terms of production and reserves, employed 600 people of which over half are NANA shareholders. Red Dog is the sole revenue source to the Northwest Arctic Borough. In partnering with NANA, Red Dog operations paid $$355 million to NANA in 2018, with $221.5 million of that being redistributed to other Alaska Native regional and village corporations. 

  • Located 25 miles northeast of Fairbanks, Kinross Fort Knox mine is the largest gold producer in Alaska and has been operating since 1996. The mine produced its 7th millionth ounce of gold in 2016.  It is the largest taxpayer to the Fairbanks North Star Borough and employs approximately 640 employees, plus 170 on-site contractors. In 2018, Kinross proceeded with the Gilmore expansion project, increasing gold production by 1.5 million ounces. 

  • Discovered in 1994, the underground Northern StarPogo Mine began producing gold in 2006, and paid out $44 million in wages in 2018, while spending over $130 million with vendors and suppliers. Approximately 320 employees, and a large number of contractors work at the mine, operated by Northern Star Resources Limited.  Pogo is about 85 miles southeast of Fairbanks, and is the eighth largest gold producer in the U.S.

  • Hecla's Greens Creek Mine, located on Admiralty Island, in Southeast Alaska near Juneau, is an underground polymetallic mine producing silver, gold, zinc, and lead. The mine is one of the world’s top 10 silver producers and the largest producer in the U.S. It employed 420 people in 2018. Greens Creek is the largest private employer in Juneau and is the largest private property tax payer in the City and Borough of Juneau.

    Coeur Alaska’s Kensington Gold Mine, located on the east side of Lynn Canal about 45 miles north-northwest of Juneau, resumed production in April 2012. Construction began in July 2005, but project completion was delayed by litigation brought on by environmental groups regarding the Corps of Engineers Permit for the project's tailings facility. The second largest private employer in Southeast Alaska, Kensington employed 387 people full-time in 2018, paying $53 million in payroll and benefits.  The mine is the second largest taxpayer to the City and Borough of Juneau, and produced 113,778 ounces of gold in 2018.

  • The Usibelli Coal Mine, a family-owned mine located outside Healy, is the only operating coal mine in Alaska. The mine has been in continuous operation since 1943 and celebrated its 75th year mining Alaskan coal in 2018. The mine fuels approximately 40 percent of Interior Alaska’s electrical generation. The mine employs approximately 100 Alaskans, including several second and third generation employees.

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PROJECTS IN PERMITTING

  • The Donlin Gold project in Southwest Alaska is a world-class gold deposit discovered in 1988. NovaGold Resources and Barrick Gold have formed the jointly-owned Donlin Gold LLC to manage and direct the project through its feasibility study, the permitting process, and into construction and operation. The project is situated on lands owned by the Calista Corporation (subsurface) and The Kuskokwim Corporation (surface). In 2012, Donlin Gold LLC filed permit applications to federal and state agencies for its $6.7 billion gold mine. In 2018, the final environmental impact statement and Joint Record of Decision were released. Donlin Gold has a local hire rate of 90% Calista shareholders at its camp, and low employee turnover. The project is expected to provide approximately 1,000 production jobs.

  • Discovered in 1987, the Pebble Project is a copper, gold, molybdenum, and silver project an initiative to develop a globally significant copper, gold, and molybdenum deposit on state land designated for mining in the Bristol Bay region of Southwest Alaska, approximately 19 miles northwest of Iliamna/Newhalen. The prospect is approximately 250 river miles from Bristol Bay. It is owned by Canadian mineral exploration company Northern Dynasty Minerals Ltd. The Pebble deposit is the largest known copper and gold resource in North America. The prospect has the potential to supply U.S. copper needs. So far, over $500 million has been spent on research, including socioeconomic studies and $150 million on environmental baseline studies. Information from these environmental and socioeconomic studies have been used to evaluate the latest mine design, which is considerably smaller than what was considered initially. The project is now being evaluated under the National Environmental Policy Act permitting process. If it is ultimately permitted, the potential for well-paying, full-time production jobs could reach 750 to 1,000. Mine operations are likely to create hundreds of millions of dollars in annual operating expenditures, and generate tens of millions of dollars in annual tax payments to local and state government.

EXPLORATION & DEVELOPMENT PROJECTS

  • The Livengood gold project about 70 miles north of Fairbanks underwent a pre-feasibility study in 2017. Placer mining began in the area in 1914 and exploration started in 2003 with a new lode discovered in 2007. The prospect has an 11.4 million ounces of gold measured and indicated resource. The project has a potential of 330 production jobs. Tower Hill Mines has invested over $200 million in the project.

  • The Upper Kobuk Mineral Projects (Arctic and Bornite) are located in Northwest Alaska on lands owned by the State of Alaska and by NANA Regional Corporation. The prospect area is being explored by Trilogy Metal Inc., and contains known resources of zinc, lead, gold, silver, and high-grade copper. Trilogy has an agreement with NANA that provides a framework for the exploration and potential development of the Ambler mining district in cooperation with the local communities. More than $126 million has been spent on exploration since 2011. A pre-feasibility study was completed for an open pit operation at Arctic. Environmental baseline data collection is also ongoing at Arctic. An updated resource statement at Bornite was completed in 2018. Meanwhile, an environmental impact statement process is underway for the Ambler District Industrial Access Project. 

  • Located outside of Haines, the Palmer Project is undergoing a preliminary economic assessment and is undertaking advanced exploration for copper, zinc, gold, silver, and barite located on Alaska Mental Health Trust Authority land 35 miles northwest of Haines. Constantine North Inc. has invested $48 million in exploration, access road construction and environmental and geotechnical studies since 2006. The project area consists of 340 federal unpatented lode mining claims, which cover an area of approximately 6,765 acres and 63 state mineral claims that cover an area of approximately 9,200 acres. CNI also holds an upland mining lease from the Alaska Mental Health Trust Authority for approximately 92,000 acres of land surrounding their federal and state claims.

  • Graphite One Inc. is exploring with intent to develop its Graphite One Project, whereby the company could potentially become the dominant American producer of high grade Coated Spherical Graphite (CSG). The project, 37 miles north of Nome on the Seward Peninsula, entails a vertically integrated enterprise to mine, process and manufacture high grade CSG primarily for the electric vehicle lithium-ion battery market. Graphite mineralization mined from the company’s Graphite Creek property would be processed into concentrate at a mineral processing plant to be located adjacent to the mine.  The graphite concentrate would be shipped to the company’s proposed product manufacturing facility. A preliminary resource assessment was completed in 2017. The project is projected to incur $363 million in capital costs with 370 potential production jobs.

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USEFUL LINKS

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SOURCES

  • Alaska Department of Natural Resources
  • Alaska Miners Association
  • McDowell Group
  • Graphite One Inc.

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