Status of the mineral industry: 2007 continues growth pattern, with six large mines operating in Alaska.(SPECIAL SECTION: MINING

Worldwide coal and metal prices continue strong. These prices are the primary driving force for the mining industry everywhere, including Alaska. Alaska's six large and numerous small operating mines are benefiting from these prices, as are the exploration projects.

Mineral activity in 2007 continues the growth pattern begun three years ago. One difference from then is that with the addition of the Pogo gold mine near Delta Junction and the Nixon Fork gold-copper mine near McGrath, there are now six large mines operating in Alaska, up from only four mines previously. Also, there are now two large mines under construction, Kensington at Juneau and Rock Creek at Nome. These mines are gold mines and both should begin operating in 2008. Construction should begin soon on the heapleach facilities at Fort Knox, which will significantly extend its mine life by processing low-grade ore that cannot be economically processed through the mill.

The Chuitna Coal project, located across Cook Inlet 50 miles west of Anchorage, is in the final throws of completing a Supplemental Environmental Impact Statement. Chuitna completed an EIS in the late 1980s, but coal prices fell so far the project was not economic. Depending on the outcome of the SEIS, receipt of the myriad of permits that are required and coal markets, Chuitna could be in construction within the next two years.

Regarding exploration, it appears that more than 20 companies will each spend more than $1 million on exploration this year. This is up from 16 in 2006. The biggest investors continue to be Barrick Gold at Donlin Creek and Northern Dynasty at Pebble. Barrick now has seven drills and an expanded 150-man camp. NDM and its new partner, Anglo American, now have eight drills in operation 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 grass roots exploration projects are active around the state.

All of Alaska's operating mines are facing severe cost increases, especially for diesel fuel. Diesel fuel is a key cost item for all mines, be they precious metal mines, base metal mines or sand and gravel mines.

Many 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.

The improved coal and metal prices, along with stable tax and regulatory policies, continue to draw new companies and new exploration investments to Alaska.

Alaska's Producing Mines

* Fort Knox

* Greens Creek

* Nixon Fork

* Pogo

* Red Dog

* Usibelli

Alaska's Mines Under Construction

* Kensington

* Rock Creek

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 33 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