A new report from McDowell Group, the economic consulting firm, says mining employed 9,200 Alaskans directly and indirectly during 2018, and injected $715 million in payroll into the state’s economy.
Mine workers were some of the highest-paid in Alaska in 2018, with an average salary of $102,100 per year. The research was conducted for the Alaska Miners Association, a statewide advocacy group for the mining industry.
There are currently six large producing mines in the state producing gold, lead, zinc, silver and coal along with a large number of small to medium-sized placer gold mines, many which are family-operated.
Larger producing mines included in the McDowell Group study included the Fort Knox gold mine near Fairbanks, a surface mine; the Pogo underground mine near Delta, which also produces gold; the Usibelli Mine at Healy, a surface mine and the state’s only producing coal mine; the Red Dog lead-zinc mine in the De Long Mountains north of Kotzebue, a surface mine in Northwest Alaska; the Kensington Mine near Juneau, an underground gold mine; and the Greens Creek Mine, also near Juneau, also an underground mine that produces a mix of metals, including silver, gold and zinc.
Greens Creek is the nation’s largest producer of silver, and Red Dog is one of the world’s largest zinc mines.
While the operating mines account for the bulk of the industry’s employment there are several mines in the development and planning phase as well as exploration work underway on several promising discoveries.
The largest projects now in the permitting or development phase include Donlin Gold, a potential large gold mine in the mid-Kuskokwim River region northwest of Anchorage and Pebble, a large copper/gold/molybdenum deposit near Iliamna, southwest of Anchorage.
Projects in the advanced exploration phase include Livengood, a large but low-grade gold deposit north of Fairbanks; Palmer, near Haines, a multi-metals project, and the Upper Kobuk project by Trilogy Metals, which include the large Arctic and Bornite copper deposits in the Ambler Mining District east of Kotzebue.
While mines do not pay the kind of revenues to state government that oil producers pay, they are still significant contributors to the state as well as municipal governments.
In 2018 mining companies paid $149 million to the state in mining license fees, royalties, taxes and other government-related payments.
A total of $34 million was paid in 2018 in municipal taxes where mines operated within the boundaries of local governments. Mines also paid $358 million in payments that year to Alaska Native corporations, mostly in royalties for production from Native-owned lands. Most of this, $355 million, was paid to NANA Regional Corp. in Northwest Alaska where the Red Dog Mine operates on land owned by NANA.
Under terms of the 1971 Alaska Native Claims Settlement Act, 70 percent of those minerals royalties, or $221.5 million, were are shared among all Native regional and village corporations, with 30 percent retained by the region where the mine operated, in this case NANA.
In payments to local governments, mining companies paid:
• $14.9 million paid to the Northwest Arctic Borough by the Red Dog Mine, in a negotiated payment-in-lieu-of-tax, or PILT
• $8.2 million in property tax paid by the Fort Knox Mine to the Fairbanks North Star Borough
• $1.7 million in property tax paid by the Greens Creek Mine to the City and Borough of Juneau
• $1.4 million in property tax also paid to Juneauby the Kensington Mine.
In payments to the state, mining companies paid:
• $58.8 million in mining license tax, rents and royalty
• $34.5 million in state corporate income tax
• $15.9 million paid to the Alaska Railroad for moving coal, sand and gravel
• $28.2 million to the Alaska Industrial Development and Export Authority for use of the state-owned road and port facilities for the Red Dog Miner and, at Skagway, in support of mines in Yukon Territory
• $1.8 million to the Alaska Mental Health Trust for mining claim and lease rent and royalty payments, along with sales of construction materials like sand and gravel. The Alaska Mental Health Trust supports mental health programs operated by the state