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 Alaska 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 materials such as sand, gravel, and rock. Alaska’s six large operating mines (Fort Knox, Greens Creek, Red Dog, Usibelli, Pogo, and Kensington) provided 2,675 full-time jobs of the nearly 4,600 mining industry jobs in Alaska in 2019. Direct and indirect jobs totaled 9,400, paying $740 million in payroll. These jobs are mostly year-round for residents of more than 70 communities throughout Alaska, half of which are found in rural Alaska where few other jobs are available.

Worldwide interest in Alaska’s mineral potential continues to grow. The State estimates the mining industry spent $162 million on exploration and $225 million on development in 2019. Driving interest is the demand for metals, primarily from Asian countries like China, Japan, and India. The export value from Alaska production was $1.7 billion in 2018. 

Additionally, the mining industry accounted for $37 million in local government revenue and $112 million in state government revenue in 2019. The industry also paid $242 million in payments to Alaska Native corporations in 2019.

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 taxpayers in rural communities like Denali Borough and the City of Nome.

 

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FACTS & ECONOMIC IMPACT

  • The industry spent an estimated $162 million in Alaska mineral exploration in 2019. Previously, exploration spending in Alaska has accounted for a large percent of the total exploration monies spent in the U.S. each year.

  • In 2019, the industry spent an estimated $225 million on mine construction and other capital investments.

  • Minerals are Alaska’s second-largest export commodity. Mineral exports accounted for 36% of the state’s export total in 2018, with a value of $1.7 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 2019 were 9,400 with a payroll of $740 million. The mining industry provides some of Alaska’s highest paying jobs with an average annual wage of $112,800, twice the state average for all sectors of the economy.

  • The mining industry provides mostly year-round jobs for residents of 70 communities throughout Alaska, more than half of which are found in rural Alaska where few other jobs are available.

  • Mining industry payments to municipalities is estimated at $37 million in 2019, and royalties and other fees paid to the State of Alaska was estimated at $112 million.

  • In 2019, The industry paid $17.4 million to the state-owned Alaska Railroad Corporation for shipments of coal and gravel, and $22.8 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 $880,290 to the Alaska Mental Health Trust for rents and royalty payments in 2019.

  • In 2019, Alaska’s mining industry provided $242 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 192 active Alaska placer mines produced 60,690 ounces of gold with a gross production value of $77 million in 2018. 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 $10.5 million in materials on state lands in 2018.

  • 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 Alaska and NANA Regional Corporation’s Red Dog Mine, the largest lead and zinc concentrate producer in the U.S. In 2019, Red Dog, one of the largest zinc mines in the world, employed 650 people of which over half are NANA shareholders. Red Dog is the sole revenue source for the Northwest Arctic Borough. In partnering with NANA, Red Dog operations paid $241 million to NANA in 2019, with $140.5 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 8th millionth ounce of gold in 2019. It is the largest taxpayer to the Fairbanks North Star Borough and employs approximately 650 employees, plus 170 on-site contractors. In 2019, Kinross proceeded with the Gilmore expansion project, increasing life of the mine gold production by 1.5 million ounces. 

  • Discovered in 1994, the underground Pogo Mine began producing gold in 2006, and is operated by Northern Star Resources Limited. Approximately 450 employees, and a large number of contractors work at the mine. 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 440 people in 2019. Greens Creek is the largest private employer in Juneau and is the largest private property taxpayer in the City and Borough of Juneau.
  • Coeur Alaska’s Kensington Mine is located on the east side of Lynn Canal about 45 miles north-northwest of Juneau.  Kensington has produced over 1 million ounces since going into production in 2010.  The mine will be celebrating ten years in production in July 2020.   Kensington is the second largest private employer in Southeast Alaska, employing 385 people full-time in 2019 and paying $55 million in payroll and benefits.  The mine is the second-largest taxpayer to the City and Borough of Juneau.  In 2019, Coeur Alaska-Kensington Mine produced 127,914 ounces of gold.

  • 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 Alaska coal in 2018. The mine fuels approximately 32 percent of Interior Alaska’s electrical generation in 2020. 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 globally significant copper, gold, and molybdenum deposit on state land designated for mining in 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 (UKMP) (Arctic and Bornite) are in northwest Alaska on lands owned by the State of Alaska and by NANA Regional Corporation. The prospect area is being explored by Ambler Metals LLC (“Ambler Metals”),  a 50:50 joint venture between Trilogy Metals Inc. and South32 Ltd. The UKMP contains known resources of zinc, lead, gold, silver, and high-grade copper. Ambler Metals 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. Ambler Metals is focusing on the continued exploration of the region as well as a pre-feasibility study for the Arctic project. 

    Access is envisaged via the completion of a 211-mile road, the Ambler Mining District Industrial Access Project (“AMDIAP”), from the Dalton highway to the UKMP. The proponent for AMDIAP is the Alaska Infrastructure Development and Export Authority (AIDEA) and AIDEA anticipates completing the federal NEPA permitting process during the first half of 2020. 

  • Located outside of Haines, the Palmer Project hosts two copper-zinc-silver-gold-barite deposits and more than 25 additional prospects on 82,000 acres of State, Federal, and Alaska Mental Health Authority lands. A Preliminary Economic Assessment was completed on the deposits in 2019, outlining the potential for an underground mine design with an an 11-year mine life and 260 jobs. Constantine Metal Resources Ltd. and their joint-venture partner Dowa Metals & Mining Company, Ltd. of Japan have invested more than $50 million into the exploration project.

  • 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. A pre-feasibility study was initiated in 2019 with completion expected in 2020. 

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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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