By Sarah Hurst
Mining News Editor 

Native corporations see Pebble's promise

Lessons learned from Red Dog, Illinois Creek and Nixon Fork mines show shareholders can benefit if training provided, partners chosen wisely


Last updated 4/24/2005 at Noon

Alaska Native corporations have considerable experience partnering with mining companies and have seen economic benefits for their shareholders from the mining industry. They are also aware of people's concern about the effect of mining on the subsistence lifestyle, as became clear in a panel discussion on "Mining and the Native Perspective" at the Newhalen conference in April.

Greg Beischer of Bristol Environmental and Engineering Services Corp. a subsidiary of Bristol Bay Native Corp., introduced the panel. Beischer, an exploration geologist formerly with nickel mining giant INCO, has been hired to provide scientific and technical information to BBNC about Pebble and other mineral development projects. BBNC released an opinion paper on Pebble in February this year, in which it said that it is too early to take a position in support of or opposition to the development of Pebble.

"In general, BBNC is in favor of developments that can bring employment, less expensive services and economic diversity and prosperity to the region, provided that the developments can be built, operated and reclaimed in a manner consistent with our mission, vision, goals and values," the paper says. "We believe that to ensure the long-term survival of our shareholders and their descendants that wish to live in the region, the region must diversify its economy to avoid total reliance on fishing and government-based income."

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As the Pebble deposit is located on state land, the state, the Lake and Peninsula Borough and local tribal governments will rightly have a much greater voice in its development than BBNC, the paper said. Nevertheless, BBNC is positioning to maximize financial benefit from the operation, should a mine eventually be developed. Bristol Environmental and Engineering Services is already supplying services to the project in the form of baseline environmental surveys.

Sport fishing followed commercial fishing in the region

The Natives of this region have witnessed the arrival of commercial fishing, followed by sport fishing, BBNC's CEO, Hjalmar Olson, told the conference. Natives were rarely hired in the cannery or the fish boats until World War II, when the country was short of manpower, he said. Following the Alaska Native Claims Settlement Act of 1971, there were some confrontations between sport fishermen and local people before the fishermen came to accept that they were on Native land and had to respect those boundaries.

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"Now comes the mine, another big industry, an opportunity for the Native people and residents of Bristol Bay, where do we go from here?" Olson asked. "A big challenge. The social and economic impacts, if that mine is developed, I would say, Bristol Bay will never be what you see today. ... It's in our back yard, a prime subsistence area, a prime fishing area, again a challenge for the Native people. What are we going to do? Are we going to sit back and let it slide by? I don't think we are."

Local people will need training if they are going to work for the mine, Olson said. "I haven't lived by a mine, so I don't know how it is to live by a mine. ... We all know, those of us who are still in the fisheries, that fish prices are down, we've had several disasters in a row, and many shareholders are leaving the region for employment, Anchorage, or wherever. The kids now, the young shareholders are growing up. They need opportunity also, they need education. We're evolving into a different kind of a world from when I was a young boy."

Doyon and NANA have been involved with the development of mines

Norm Phillips, resource manager with Doyon Ltd., another Native corporation, told the conference how in his youth he used to travel for three days by boat to a fish camp in Rampart, 90 miles north of his home town of Fairbanks. Now the trip takes just four hours because of the road built to access the oil on the North Slope. Doyon has had $78 million spent on its 12.5 million acres of land by mining companies, but no mines have yet been developed, Phillips said.

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Doyon has been involved with working mines, however, including the troubled Illinois Creek mine, south of Galena. Illinois Creek was operated by USMX in the late 1990s. "We met with all of our villages and we talked about cyanide going down the Yukon River," Phillips said. "But the mining claims were on state land and they did meet the requirements, they did do an environmental assessment and they did open the mine - and they did go bankrupt."

In its first year Illinois Creek trained and employed several Doyon shareholders, but after those people decided that mining wasn't what they were interested in, USMX stopped training Doyon shareholders and the mine's employees became mainly non-Native, Phillips said. "And when the company went belly-up, there was nobody there that was really connected to the communities." The state stepped in to close down the mine and ensure that the environment was protected, he added.

Doyon training: mine and drilling work

Doyon also helped to train 28 people in applied mining technology for the Nixon Fork mine near McGrath. "How to collect a soil sample, how to survey, how to use a GPS, how to work around a helicopter. ... Then Doyon turned around and opened up a roustabout training class, because we also operate five drilling rigs on the North Slope, and 16 of those people were accepted into that program."

By the time the mine came into production in 1995, only two Doyon shareholders were employed there for the three years until Consolidated Nevada Goldfields went bankrupt. Some people didn't like the idea of working underground, while others preferred the North Slope's two-week on, two-week off shifts, because it allowed them time for subsistence activities, according to Phillips.

Thanks to cooperation between Doyon, the state and the Bureau of Land Management, Nixon Fork was shut down safely, Phillips said. "That mine did not discharge any contaminants. It was shut down in a way that is allowing a company today to go out there and explore, and we hope it opens up again."

Most recently, Doyon's catering and security company, Doyon Universal Services, worked very hard to secure a contract for the camp at Teck Cominco's Pogo mine near Fairbanks, which is currently under construction, Phillips told the conference. But the low bidder for the contract was a village corporation that had partnered with one of Doyon's rivals.

"Our goal at Doyon is to find companies that will come and find a mine on Doyon lands," Phillips said. "We feel that that's where we will benefit the most, we'll be able to train our people for those positions, we'll take an active interest in the mine." Doyon's companies average only 22-percent shareholder hire and the corporation ought to do better, Phillips added. People who use drugs or alcohol need to be helped, rather than being told they can never have a job, he said. "I really wish Bruce (Jenkins from Northern Dynasty) and the other groups that are exploring in this region good luck, and I hope they find a mine," he concluded.

Seepage problem fixed at Red Dog

NANA Corp.'s vice president for lands and resources, Walter Sampson, talked about working with Teck Cominco on the Red Dog zinc mine, which is located on NANA land in northwest Alaska. NANA chose Cominco to develop the mine because the company had Arctic experience already in Canada's Resolute Bay, he said. Sampson compared the process to a courting system before a marriage. "We had to establish trust between NANA and the company," he said.

About four years into the mining operation, which began in 1989, Red Dog had a seepage problem, Sampson told the conference. The eight-person subsistence committee of residents from the nearest villages, Kivalina and Noatak, which had been formed to advise Teck Cominco on local issues, asked the company to fix the problem and it had to spend $12 million doing so, according to Sampson. "That's the kind of authority the committee has," he said.

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Around 53 percent of Red Dog's employees are NANA shareholders. The long-term aim is to reach 100 percent. "You're the people that will be impacted by that mine," Sampson said of Pebble. "The children are the future of your communities. What do they have for the future? I'm not here to try to tell you that you ought to do that, but there's an opportunity for you to think about that development."


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