Status of the mineral industry: 2006 is shaping up to be a banner year for minerals in Alaska. During 2005, 12 companies spent m

International prices for mineral commodities and coal are continuing to be strong and are the driving force for the mining industry worldwide, including Alaska. Alaska mines already in operation, advanced exploration projects and grassroots exploration are all benefiting from the current strong demand for minerals.

2006 is shaping up to be a banner year for minerals in Alaska. The Pogo Mine, located 45 miles northeast of Delta Junction, poured its first gold on Feb. 12. With this addition, Alaska still has only five large mines, but the opportunities are tremendous.

The Kensington Mine, 35 miles north of Juneau, is under construction and is expected to begin gold production in 2007. At Nixon Fork, the mill, camp and underground are being prepared to resume production this fall after being idle for several years. Nixon Fork is located 32 miles northeast of McGrath. Rock Creek, and its satellite pit Big Hurrah, have received their permits and are now in construction. They are located near Nome.

Fort Knox, located 20 miles northeast of Fairbanks, is in the permitting process to heap leach low-grade ores. The Chuitna Coal project, located across Cook Inlet, 50 miles west of Anchorage, is in the scoping stage for a Supplemental Environmental Impact Statement. Chuitna completed an EIS in the late 1980s, but coal prices fell so far the project was not economic.

REASON TO CELEBRATE

Regarding exploration, during 2005, 12 companies spent more than $1 million on exploration and in 2006 this number should be even higher. The biggest investors are Barrick Gold at Donlin Creek, located 13 miles north of the village of Crooked Creek, and Northern Dynasty at Pebble, located 15 miles north of Illiamna. Barrick now has seven drills and an expanded 120-man camp. NDM has four drills operating that have the capacity to drill to a depth of 6,000 feet, which will be needed to define the east ore zone. Many other exploration projects are active all around the state.

OPERATING COSTS INCREASE

Alaska mines already in operation continue to operate, but costs continue to increase, especially for diesel fuel and for electrical power. The large mines currently operating are Greens Creek near Juneau, Red Dog north of Kotzebue, Fort Knox near Fairbanks, Usibelli Coal Mine at Healy and now Pogo. Numerous small family placer gold mines continue to operate on a seasonal basis and some new ones were permitted this year. The sand, gravel and stone mines continue to supply material for the booming local construction activity.

NPR-A

One major issue now before Alaska is Southern NPR-A. This is the area in northwest Alaska that includes the extension of the mineral terrain that contains Red Dog. The BLM has begun a planning and EIS scoping process for this mineral-rich area. It will require an Act of Congress to open NPR-A to mineral development. The metal and coal resources of the area are tremendous. Due in part to this coal, the U.S. is often called the "Saudi Arabia of coal." Given the current energy crisis and the current situation in the Mideast, it is imperative that these metal and coal deposits become available to the nation.

The improved metal and coal prices, along with stable tax and regulatory policies, continue to draw new companies and new exploration investments to Alaska. Opening NPR-A will add significantly to those investments.

Steven C. Borell is executive director of the Alaska Miners Association, an industry support organization with more than 1,000 members. The AMA represents all aspects of the mineral industry before state and federal agencies, the State Legislature and U.S. Congress. He has more than 32 years experience involving exploration and operations in coal, placer and hardrock mining in Western and Midwestern states, Canada and South America. He is a registered professional engineer in Alaska, Colorado and North Dakota.

Print Get the Mag Weekly Updates