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Industry reps talk mining at State Capitol

Resources committees updated on production

Posted: February 27, 2013 - 8:34pm  |  Updated: February 28, 2013 - 1:19am
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Mike Satre, Executive Director of the Council of Alaska Producers, along with Karen Matthias, right, a consultant for the Council of Alaska Producers, and Deantha Crockett, Executive Director of the Alaska Miners Association, gives an mining industry briefing to a Joint House/Senate Resources Committee at the Capitol on Wednesday.  Michael Penn / Juneau Empire
Michael Penn / Juneau Empire
Mike Satre, Executive Director of the Council of Alaska Producers, along with Karen Matthias, right, a consultant for the Council of Alaska Producers, and Deantha Crockett, Executive Director of the Alaska Miners Association, gives an mining industry briefing to a Joint House/Senate Resources Committee at the Capitol on Wednesday.

Juneau’s Michael Satre and other representatives of Alaska’s mining industry gave a presentation Wednesday to a joint meeting of the House and Senate Resources committees in which they described Alaska’s mining sector as a major player in the United States and the world.

Satre, who is the executive director of the Council of Alaska Producers as well as the chairman of the City and Borough of Juneau Planning Commission, said Alaska contributes a substantial amount of silver, lead, zinc and other metals produced in the U.S. every year due to large mines in Southeast Alaska and elsewhere.

“Alaska is an incredible producer of silver,” Satre said, presenting numbers that show Alaska produces about 13 million ounces of silver per year — about 38 percent of total U.S. annual production, which he listed as 34 million.

Much of Alaska’s silver, Satre added, is produced at the Hecla Greens Creek mine on Admiralty Island, for which he works as a spokesman. The mine is a major employer in Juneau.

Alaska is the U.S. leader in the production of zinc, another metal mined at Greens Creek, although the Red Dog mine in Northern Alaska is the largest zinc producer, according to Satre.

“We produce an exceptional amount of lead and zinc,” said Satre.

Indeed, Alaska accounts for about 690,000 tons of zinc out of the 825,000 produced in the U.S. every year, numbers in Satre’s presentation indicate. Worldwide annual production is 14 million tons.

According to the same table, some 155,000 tons of lead — more than 40 percent of U.S. production — come out of Alaska every year. That compares to 5.7 tons produced around the world per year.

Alaska is a less consequential producer of gold, Satre said. The precious metal lured thousands to Alaska during the gold rush days at the turn of the 20th century. But today, Alaska produces less than 1 million ounces of gold per year out of 7.3 million ounces in the entire U.S., according to Satre.

“That will put us supplying roughly a seventh of the U.S. production, but we still lag far behind the rest of the world in terms of worldwide annual production,” said Satre. “We have some opportunities in the state to increase our percentage.”

Satre identified Greens Creek and another Juneau operation, Coeur Alaska’s Kensington mine, as among the hard-rock mines producing gold in Alaska.

Another planned mine in Southeast Alaska, Heatherdale Resources’ Niblack site near Ketchikan, was listed by Satre as a gold “developer.” So was the controversial Pebble mine, a proposed operation being explored by the Pebble Partnership in Bristol Bay.

Satre acknowledged that Alaska does not currently produce copper or rare earth metals, although he noted that projects like Pebble and Ucore Rare Metals Inc.’s planned Bokan Dotson Ridge mining operation on Prince of Wales Island could change that.

“We really like ultimately Alaska could play a critical role in supplying these to the United States, just as we play an important role supplying these other metals to the nation and worldwide,” Satre said of the rare earth elements Ucore expects to mine from Bokan Mountain.

Karen Matthias, who is the incoming management consultant for the Council of Alaska Producers, also spoke on the state of mining investment in Alaska.

“The bottom line is that’s very difficult to predict commodity prices, and that makes it very difficult to attract investment and to judge economic feasibility for a project that may be five, 10, 15 years away from production,” said Matthias. “Where does Alaska fit into that global picture? Well, Alaska has to compete for investment dollars with mining projects all around the world.”

At the end of the presentation, which only lasted about 25 minutes in total, committee chairwoman Sen. Cathy Giessel, R-Anchorage, brought up a hydroelectric power project in Juneau and its connection to the Greens Creek mine.

“I heard recently about the Lake Dorothy hydro project here in Juneau, which, because of Greens Creek, there was additional need for hydropower here in Juneau, which of course ultimately benefits all of the consumers here in terms of their cost per kilowatt-hour,” said Giessel, one of the Alaska State Legislature’s most ardent supporters of mining. “So mining contributes in so many ways to the economy of communities.”

Greens Creek paid for much of the Lake Dorothy development, which went online in 2009 after a lengthy construction process that saw its expected project cost more than double over time.

• Contact reporter Mark D. Miller at 586-1821 or at mark.d.miller@juneauempire.com.

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snagger
8221
Points
snagger 02/28/13 - 06:44 am
6
0

Figure it out...

Now's the time to figure out appropriate extraction fees so that all Alaskans can benefit from the state's mineral wealth!

nottacheechako
468
Points
nottacheechako 02/28/13 - 08:17 am
4
2

Snag

We already do benefit dude, its called jobs! The money the miners make is mostly spent here in AK and the mines buy as many supplies and services they can from Alaskans.
Don't believe me, ask some the local contractors and business owners.

The mines have saved our bacon during this recession and we should enable and embrace more mining activity statewide that has been done as respectful to our environment as Greens creek and Kensington have shown with their operations.

kpawsuh
10137
Points
kpawsuh 02/28/13 - 08:44 am
7
0

Why shouldnt we have a mining

Why shouldnt we have a mining PFD? Seems fair. Fishermen have the fish tax. Tourism has the head tax. What does mining have thats comparable?

Fog99801
3
Points
Fog99801 02/28/13 - 09:55 am
5
4

Mining Taxes

Just to point out, miners in Alaska do already pay money to the State for mining. First, miners owe a yearly rent to the State on all the State mining claims that they have staked. Second, depending on the scale of production, a miner may be required to pay a tax to the State under the Mining License Tax. Third, miners are required to file a production royalty based on how much mineral resource they extracted from State property.

al97ct
466
Points
al97ct 02/28/13 - 10:29 am
10
0

These are public resources,

These are public resources, just like oil.
The wealth should be shared by ALL alaskans not just the employees at the mines. Thing have to change. It is not right that CEO's of these mines make multi-million dollar salaries off our resources.

Fog99801 ??? What the mines pay is pennies on the dollar for what they get in return, who are you trying to fool, Alaskans & future Alaskans are being ripped off.

I think the royalty is 2% the lease peanuts. Money is better in the public's pockets. The middle class are the job creators. We buy the goods that business owners produce. If we don't have cash to spend they go out of business.

al97ct
466
Points
al97ct 02/28/13 - 10:27 am
6
1

Of course Michael Satre and

Of course Michael Satre and the other representatives of Alaska’s mining industry are making a sales pitch to our reps! They want to dig up resources that belong to Alaskans and market them to the rest of the world.

ugminer1
66
Points
ugminer1 02/28/13 - 11:20 am
4
0

Of course he wants to dig up

Of course he wants to dig up resources that belong to Alaskans. He is Alaskan, pretty sure he was born and raised in Juneau. And who better to sell the resources to the rest of the world? It brings income to the state. Greens creek is the largest property tax payer in the borough and the largest private sector employer. Ask the people at NPE or Harri plumbing how they're doing since they've been getting the contracts at both mines. Your right, the mines make lots of money doing what they do. They also invest millions upon millions to get it. There is no law out there stating a local company cannot do what the larger out of state company's are doing with these mines. There are just very few that have the financial backing to get these projects going.

al97ct
466
Points
al97ct 02/28/13 - 01:20 pm
6
2

I am an Alaskan to and think

I am an Alaskan to and think its time to start treating the mining industry just like the oil and gas industry.

These are non-renewable Alaskan resources. Lets take care of our own before we make foreign mining companies and their investors rich by selling off our limited resources to the rest of the world. We also have a constitutional duty to manage our resources for future Alaskans

There are many Alaskans working fulltime at places that do not offer pension plans.
Trickle down economics does not work, everyone should get a piece of the pie.
Our economy is changing and how we handle public resources needs to change to.

Our Governor and his followers are doing right by private indusrtries but not the general public. Alaskans need to think long and hard about who they vote for in 2014.
I think its time to break up the Party.

UNBELIEVABLE
42
Points
UNBELIEVABLE 02/28/13 - 04:56 pm
1
2

SOUNDS LIKE A BUNCH OF DEMOCRATS ON HERE

How do you figure that you are owed anything.. Did you invest money in the venture.. If it was not for the mines helping to keep the economy going in Juneau you might not even have a job think about the big picture.. Nobody OWES you anything unless you want to get off the couch or out from behind your computer and make your life better. This is whats wrong with the world why dont you go for for Obama again......

jamison
3404
Points
jamison 02/28/13 - 06:23 pm
0
0

UNBELIEVABLE!

your handle goes PERFECTLY with your post!

But you need to back up, hoss---Those minerals, from coal, gold, copper, silver, rare earths, and oil: All those non-renewable resources the mining and oil companies want to get their hands on, BELONG TO THE PEOPLE OF THE STATE OF ALASKA. Unless they're mined on private land with mineral rights, they are part of the commons, which means everyone has a stake, especially unborn generations who would probably appreciate it if we left some of it in the ground. Therefore, we should be prudent about developing these resources, cautious about who we let do it, and vigilant that they clean up their mess afterward and not ruin adjacent renewable resources like fisheries.

High Tide
263
Points
High Tide 02/28/13 - 11:27 pm
1
0

Non Alaska resident miners

Many employees of companies operating mines in Alaska work a week or two straight and only "come to town" long enough to jump on Alaska Airlines to head back to Idaho, Nevada, California, etc. to pay their mortgages, food, toys and let's not forget taxes with money made from Alaska resources. This could be said for many occupations (Oil, fishing, charter, tourism . . .). I have many longtime/lifetime Alaskan friends who work in all of these fields and am glad they live here and help keep the wheels of the Peoples Republic of Alaska turning. I am as much a fan as the next of a person who maximizes their income from their job, but it is time Alaska (politicians) do a better job of making sure things are taken care of at home first. Maybe a bill that draws some sort of revenue from those who are only taking from Alaska. A leach is a leach whether lined up every week at the welfare office or about to fly first-class out of Juneau with a hefty Coeur D'alene Mines Corp check in their hip pocket. Heck, I would take the money too, but would also not complain about paying my fair share if I was asked/told to do so. Seems like we might need to start asking/mandating a little.

5G Juneau
20
Points
5G Juneau 02/28/13 - 10:54 pm
1
0

Qualified Workers

The subject of non-resident workers always seems to come up in these forums. The bottom line is that many of our industries have to rely on workers from outside our state to supply our work force with skilled employees. Just take a look at the Trans-Alaska Pipeline. It would have been impossible to do that job soley with qualified Alaska residents during the time frame of that project. The same goes for our mines. That's not to say that we cannot grow our own pool of skilled workers to fill positions in our industries. I am a firm believer that we need to continue to offer educational opportunities to our residents that will give them the skills to take the jobs that will otherwise go to non-resident workers.

High Tide
263
Points
High Tide 02/28/13 - 11:19 pm
0
0

I agree with you.

Non resident workers can and do fill a void. You are also correct that the state and local governments should do more to help train and retain locals for local jobs or at a minimum craft incentives for those to come here to work to also move here. My earlier point was we, Alaska, needs to develop a way to better capitalize on the money being made off of our resources. A lot of money is leaving in the form of wages to employees (not totally bad) and shareholder dividends (I have benefited from this.). We need to curb the reliance you spoke of on outside help. Your comments on educating/training people ties in nicely to what is going on with the legislature with both oil taxes and the lack of funding to the base student allocation. Again, I like your comments. Thumbs up.

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