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AK mines produce $3.8 billion in 2011

Posted: February 23, 2012 - 1:17am
Fred Parady, left, Executive Director of the Alaska Miners Association, Inc., and Mike Satre, Executive Director of the Council of Alaska Producers, participate in a mining industry briefing to the Joint House/Senate Resources Committee at the Capitol on Wednesday.  Michael Penn/Juneau Empire
Michael Penn/Juneau Empire
Fred Parady, left, Executive Director of the Alaska Miners Association, Inc., and Mike Satre, Executive Director of the Council of Alaska Producers, participate in a mining industry briefing to the Joint House/Senate Resources Committee at the Capitol on Wednesday.

Lines to mines: Miners ask for power lines, pipe lines to resources

The governor’s Roads to Resources endeavor is not incentive enough for Alaska’s miners, according to industry representatives.

Representatives for the Alaska Miners Association and Council of Alaska Producers gave the mining industry’s annual update to the Legislature at a Joint House and Senate Resources Committee meeting Wednesday.

Alaska Miners’ Association Executive Director Fred Parady asked the state for "lines to mines" — state-built power lines, pipelines and other infrastructure to spur exploration and development of Alaska’s mineral resource.

“When mining companies are doing so well,” Rep. Scott Kawasaki D-Fairbanks asked, "and let's be honest, you guys are doing well,” how do legislators convince constituents that building infrastructure for the mining industry is a good use of public funds?

Mike Satre, executive director of the Council of Alaska Producers testified to the joint committee mining companies are not going to wait for the state to build infrastructure. However, public and private cooperation, like Greens Creek’s switching from diesel generation to hydroelectric, might be a good way to leverage resources, Satre said.

Parady said the Alaska Miners Association opposes a possible intervention by the EPA into the Pebble Mine’s permitting process. The EPA has veto power over the U.S. Army Corps of Engineers or the state of Alaska when assigning a site for the discharge of dredged or fill material, commonly referred to as a 404(c) review. The Environmental Protection Agency may decide on the 404(c) status of the Pebble Mine project.

The Miners Association supports a “rigorous state permitting process,” Parady said. The legislature should make sure it is well funded and imbued with integrity, he said.

“Put a permitting practice in place that Alaskans trust,” Parady said.

Opponents of the proposed Pebble Mine have expressed doubt Alaska’s regulatory system can handle a project the size of Pebble.

To give an example of Alaska’s mining potential, Parady compared Alaska’s Usibelli Coal Mine, which extracts all of Alaska’s 2.2 million tons of coal per year, to Wyoming’s 450 million tons. Though there are location and infrastructure differences between the two mining states, “that gap shows vast potential,” Parady said. "Alaska's opportunity is tremendous,"

Southeast Alaska will play a larger role in mining industry discussions as Bokan Mountain’s rare earth element potential is explored, Satre testified for the Council of Alaska Producers.

Ucore Rare Metals is currently doing an inventory of the site’s potential. Rare earth elements are used in consumer electronics and renewable energy technology. The rare earth element neodymium allows for the super-strong magnets that make tiny motors powerful enough to vibrate cell phones and spin memory disks thousands of rotations a second. Bokan contains an “incredible amount of rare earth minerals," Satre said. And Alaska is strategically positioned to be a world player in rare earth minerals, he said.

Exploration is also large economic driver. Even though exploration does not always lead to an operational mine, the money spent is none the less felt, Satre said.

Last year 60 exploration projects each spent over $100,000 and 30 more projects spent more than $1 million a piece, he said.

And the exploration money wasn’t wasted no matter the outcome, Satre said. The $3 billion on exploration "dramatically enhanced our understanding of our resources,” Satre said.

Jim Calvin, a principal with McDowell Group, said statewide mining employs 4,500 people directly. In large mines, Alaska residents make up 70 percent of the workforce.

• Contact reporter Russell Stigall at 523-2276 or at russell.stigall@juneauempire.com.

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