FAIRBANKS - This Interior city will be a jumping-off point this year for geologists in search of platinum and palladium, making the area the second busiest in the state behind Southeast Alaska, mining experts predict.
Mineral companies will spend $3 million to $4 million in the state this year, up from the $1 million spent in 2000.
Increased demand for jewelry and clean air emissions is driving up the price per ounce as stockpiles of the steely gray metals dwindle.
"There is huge demand for this stuff," said Curt Freeman, president of Avalon Development Corp., which has several platinum and palladium clients.
Platinum and palladium have been mined in Alaska before, so it makes sense that companies have come back for a second look, Freeman said.
Palladium, used for catalytic converters, has jumped from $127 an ounce in 1996 to $687 an ounce last week.
Platinum has been selling at about $558 an ounce. Over the last 10 years, demand for platinum for jewelry, as well as for catalytic converters, has increased 70 percent worldwide, Freeman said.
Freeman estimates that for the first three months of this year mine exploration companies have spent about $500,000. Many of those companies have come or intend to come through Fairbanks on their way to the surrounding fields, he said. In addition, field samples are sent to Fairbanks to be processed for testing, he said.
Platinum and palladium are usually found together and have four byproducts, including iridium, said Rainer Newberry, geology professor at the University of Alaska Fairbanks. Together they are known as platinum group elements, or PGE. The metals are excellent conductors of electricity, with platinum being the best of the grouping, he said. But he said exploration is occurring in four locations.
Southeast Alaska exploration activity includes prospectors sizing up the Salt Chuck, a closed palladium mine on Prince of Wales Island. Also in Southeast, work is continuing on a Union Bay platinum prospect.
In Southwest Alaska geologists are searching around the former Goodnews Bay mine, which at one time produced 650,000 ounces of platinum, Freeman said.
Prospectors have also been looking around Seward, he said.