One bright spot in Alaska’s economy is in minerals, and the Alaska Miners’ Association’s latest economic report for the industry bears this out. In a tough year when many Alaska employers cut their workforce due to COVID-19 impacts, hiring rose slightly in the mining industry and payrolls were substantially up.
So far 2021 looks like another strong year, with a major exploration program in the Ambler Mining District in the western Brooks Range east of Kotzebue, another drilling program at the DonlinGold project in the mid-Kuskokwim River region west of Anchorage; continued exploration at NovaGold Minerals’ gold discovery in the Yentna Mining District west of Wasilla, in the Matanuska-Susitna Borough, and more drilling at the NiBlack Project, a multi-metals deposit on Prince of Wales Island west of Ketchikan, in Southeast Alaska.
In 2020 there were 4,700 employed directly in mining and when indirect jobs were added the total attributed to minerals reached 9,600. The same numbers for 2019, a pre-pandemic year, were 4,600 employed directly and 9,000 when indirect jobs are included.
The direct and indirect payroll jumped, however, from $740 million in 2019 to $890 million in 2020; average annual wages for jobs in mining rose from $112,800 in 2019 to $115,300 in 2020. Taxes paid to local governments increased from $37 million in 2019 to $49 million in 2020; revenues paid to the state (taxes and fees) were $112 million in 2019 and $117 million in 2020.
Capital spending by mining companies also climbed, from $225 million in 2019 to $430 million in 2020.
Not everything was up, however. Royalties paid to Alaska Native corporations (mostly from the Red Dog Mine in northwest Alaska) dropped from $242 million in 2019 to $175 million in 2020. The decline was due to lower zinc prices and some higher costs at the mines, which affected the royalty payments.
Exploration spending dropped, too, from $162 million in 2019 to $127 million in 2020. That was largely influenced by cutbacks in activity taken as a precaution during the COVID-19 pandemic.
In activity underway this year, Ambler Metal LLC, a joint-venture of Australia-based South32 Ltd. and Trilogy Metals LLC of Vancouver, B.C. has a major exploration program underway in the Ambler Mining District.
South32 is a major mining company and Trilogy Metals is a smaller “junior” mining exploration company.
The companies will spend $34 million this year doing further test drilling at Arctic, a high-grade copper discovery, and on other discoveries made in in the area. Arctic is 292 miles northwest of Fairbanks.
About 130 people are being hired to work on the program this year, according to Ramzi Fawaz, Ambler Metals’ president and CEO.
Work on permits will also continue this year on the Ambler Access Project, a planned 211-mile industrial road that would link the Ambler district with the Dalton Highway, the north-south road linking North Slope oilfields with Interior Alaska’s highway system.
That work is being led by the Alaska Industrial Development and Export Authority, the state’s development finance corporation. Thirteen million dollars is budgeted for 2021 work on the road with the investment split between AIDEA and Ambler Metals.
More drilling is also planning at DonlinGold, one of the world’s largest undeveloped gold discoveries. Exploration and development work has been underway since the 1980s and after years of work the owners of the joint-venture, Barrick Gold, a major mining company, and NovaGold Resources, a junior exploration company have the needed government permits.
Drilling in 2020 and 2021 is being done to confirm the gold values in ore and to update modeling for mine development. In March the joint venture announced that the final 2020 drilling results on 85 test holes exceeded the companies’ expectations.
NovaMinerals Ltd., also an Australia-based exploration company, will continue its exploration drilling at the Estelle gold discovery in the Yentna Mining District in the western Matanuska-Susitna Borough. The project is about 110 miles northwest of Anchorage.
The company has one exploration rig at the site that was used in 2020 and will be used again in 2021. NovaMinerals is also building a core-analysis facility at the site to speed the turnaround time in getting drill results. The 2020 drilling resulted in an increase of estimated gold resources from 2.5 million ounces to 4.7 million ounces, and drilling in 2021 is expected to increase resources further.
An approximate 100-mile industrial access road is being planned that would connect the Yentna district to the Matanuska-Susitna Borough’s Port MacKenzie on the Knik Arm of Cook Inlet.
The road project is being led again by AIDEA, the state development authority, with the cooperation of the Mat-Su Borough.
In Southeast Alaska new drilling is also underway at the NiBlack multi-metal copper-gold-silver-zinc deposit on southern Prince of Wales Island. Two drill rigs and crew were mobilized in mid-March. The work will build on information from drilling in 2020.
Heatherdale Resources, the owner, also recently changed its name to Blackwolf Copper and Gold Ltd.
Although there are not many people employed directly in mining compared with other industries, the jobs pay well, on average about $115,000 a year. That’s about twice the average statewide average for wage and salary income.
There are now five producing metals mines and one producing coal mine in the state, but the new mines in advanced exploration and under development could increase that number. Also, new resources are being added at the mines now in production, which will extend their operating lives.
Mines cannot pay the amount of royalty tax to state government that oil and gas pays but they do pay a state mining license tax that is like the production tax paid by oil companies.
When mines are located within municipalities they are major property taxpayers sometimes major customers for local electric utilities, such as in the Fairbanks North Star Borough where the Fort Knox Mine is the biggest customer for Golden Valley Electric Association, or GVEA, the regional electric cooperative.
Usibelli Mine, the state’s only producing coal mine, also buys power from GVEA. The Greens Creek Mine near Juneau also purchases power from Alaska Light and Power, Juneau’s privately-owned electric utility.