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Canadian company wants to reopen Skagway terminal

State agency agrees to spend up to $50,000 on feasibility study

Posted: Thursday, July 28, 2005

ANCHORAGE - A dormant coal terminal in Skagway could be resurrected by action this week by the Alaska Industrial Development and Export Authority.

The board of the state lending and development agency agreed to spend up to $50,000 on a feasibility study for a project proposed by Vancouver, British Columbia-based Cash Minerals Ltd.

If the project goes forward with AIDEA's financial backing, the amount spent on feasibility would be rolled into the overall funding package. If no project materializes, Cash Minerals must reimburse AIDEA the money it spent on studying feasibility, said Jim McMillan, the agency's deputy director of credit and business development.

The state-owned coal terminal in Skagway has not been used since 1998, said AIDEA project manager Becky Gay.

"I'm optimistic about putting this idle state asset to work," Gov. Frank Murkowski said.

Cash Minerals wants to truck 1.2 million tons of bituminous coal annually from a deposit near Whitehorse, Yukon, to tidewater at Skagway, Gay said. From there, it would be shipped to Pacific Rim markets.

The Skagway terminal was built in 1969 to serve as a warehouse and shipping operation for metals coming from the Yukon. AIDEA bought it from White Pass Railway for $25 million in 1990, according to the agency. The ore terminal closed in 1998 after a mine in Faro, Yukon, that used the facility shut down.

When operating, the terminal creates up to 10 jobs at the site, plus additional trucking jobs, according to AIDEA.

The feasibility study will look at the costs of upgrading the terminal, the economics of storing and shipping coal from the building, and the financial wherewithal of Cash Minerals, among other things, McMillan said.

White Pass owns Skagway's five docks where cruise ships tie up during summer.

AIDEA chairman Mike Barry, at the board's meeting Monday in Anchorage, asked about the potential for conflict between cruise ships and coal operations.

"White Pass has indicated it will attempt to schedule monthly three-day windows at the ore dock to accommodate coal-loading activities," said Basil Botha, Cash Minerals chief executive.

The feasibility study is expected to be complete by the end of September.



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