Mine looms as major player in Juneau economy

Posted: Tuesday, January 18, 2000

The Greens Creek mine on Admiralty Island is assuming an increasingly major role in the Juneau economy.

The mine is now officially the largest private employer in Juneau, surpassing Fred Meyer, according to the Juneau Economic Development Council.

And ongoing additions to the known ore deposit could keep mining going for up to 40 years, said mine manager Keith Marshall.

The multi-metal mine, the largest producer of silver in North America, is doing so well that at least three other companies are bidding to operate it.

The new Capital Profile from the Juneau Economic Development Council shows Greens Creek with 266 employees, edging ahead of Fred Meyer, which has 250.

``We're delighted to be able to diversify employment opportunities in Juneau,'' Marshall said.

Alaska Airlines and the Central Council of Tlingit and Haida Indian Tribes were tied for third largest employer, with 166 workers each.

Greens Creek, 20 miles west of downtown Juneau, also is the largest property taxpayer as of 1998, with $77.3 million in taxable assessed value, according to the Capital Profile.

Acting JEDC Director Kirk Flanders characterizes Greens Creek's performance as ``a strong comeback.''

After just four years of operation, the mine was shut down in 1993, when prices for precious metals were low. But it was back on line in 1996 with the discovery of a new, higher-grade ore deposit, rebounding prices and the installation of major pollution-control equipment.

The comeback shows no signs of flagging.

In 1999, Greens Creek maintained 10 million tons of reserves, as recently discovered ore deposits offset the extraction of 500,000 to 600,000 tons, Marshall said. ``Historically, Greens Creek has found a new ore body around every four-to-five years, usually around 3 million tons.''

Both the pre-existing and recently discovered deposits are about 12.5 percent zinc and 5.5 percent lead, with silver at about 20 ounces per ton and gold at 1.8 ounces per ton, Marshall said.

The ``geological interpretation'' of unexplored areas suggests that more discoveries are on the way, he said. ``We're positive we'll find more ore in the next few years.''

If metals prices don't collapse, the mine could operate for 30 to 40 more years, Marshall said. As it stands, the mine could operate for 18 years removing ore that already has been discovered, he said.

But new discoveries won't immediately quicken the pace of extraction.

While Greens Creek is ``developing a lot of respect within the organization for being able to do what we saying we're going to do,'' investors need to see a longer track record of production before becoming confident about expanding operations, Marshall said. Employment should remain level, he said.

Buck Lindekugel of the Southeast Alaska Conservation Council said it remains to be seen if Greens Creek is being operated in the most environmentally conscientious manner. By law, the mine must meet a higher operating standard because it's located in a national monument, he noted.

One recent concern is acid drainage both from tailings and the main ore body, Lindekugel said. He said an extended mine life actually increases the chances that any problems will be satisfactorily dealt with.

``To stay longer, they're going to have to show that they're doing the job right,'' he said.

Meanwhile, the operating partner at Greens Creek, Kennecott Corp. of Salt Lake City, is preparing to announce the outcome of an ``auction'' of the mine conducted from September to December.

After getting an unsolicited bid for the mine, Kennecott invited other offers as a way to determine its market value.

By December, three companies had expressed interest, Marshall said. He expects an announcement by the end of January as to whether a sale of the mine is likely.

But if any portion of the mine is going to be sold, Kennecott's partner at Greens Creek, Hecla Mining Co. of Coeur d'Alene, Idaho, expects to exercise an option to increase its 30 percent share of the mine, said Hecla's corporate communications manager, Vicki Veltkamp.

Under its agreement with Kennecott, Hecla has the right of first refusal on an additional 12.52 percent of the mine, which means the company would need only to match the winning bid, Veltkamp said. Hecla could purchase the remaining interest in the mine by offering 10 percent more than the high bid, she said.

``Once they choose whoever it is, we have a chance to meet their offer and pay a little bit of a premium,'' she said. ``We would like to own more of that mine. We'd like to actually operate it.''

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