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By Rose Ragsdale
For Mining News 

BHP Billiton brings global view to Alaska

Mining giant BHP Billiton can draw on experience operating 10 coal mines on four continents, Canada's largest diamond mine

 

August 27, 2006



BHP Billiton, the huge international mining company that Arctic Slope Regional Corp. has enlisted to help explore and develop coal deposits believed to lie beneath its lands in northern Alaska, is an old hand in virtually every aspect of the venture.

London-based Billiton is the world's largest resource development company with 37,000 employees in 100 operations in about 25 countries and nearly $32 billion in revenue and $6.5 billion in profits in 2005 as well as $92 billion in market capitalization.

Billiton is a mining industry leader in the production of aluminum, energy and metallurgical coal, copper, manganese, iron ore, uranium, nickel, silver and titanium minerals, and has substantial interests in oil, gas, liquefied natural gas and diamonds.

Company works with indigenous landowners

Among operations that make Billiton uniquely qualified to join forces with ASRC in the Alaska Arctic are two coal mines, the San Juan and La Plata mines, on or near Native American lands in New Mexico, and the Ekati diamond mine in the Northwest Territories.

Billiton says it has had considerable success working with indigenous landowners, including the Navaho Nation in New Mexico and Inuit aboriginal groups in the Northwest Territories.

In New Mexico, BHP Billiton's subsidiary, New Mexico coal, supplies two coal-fired power plants, which deliver electricity to about 900,000 families and businesses in the Southwest, primarily in Arizona and New Mexico.

The San Juan and Navaho mines together produce about 15 million tons of coal annually and employ 946 people. The mines are on or near the Navajo Indian Reservation and about 65 percent of the mines' work force is Native American. Billiton also funds a number of college scholarships for the Navajo community.

In the Northwest Territories, Billiton has operated 80 percent owned Ekati, Canada's first diamond mine, since it opened in October 1998. The mine currently produces 6 percent of the world's diamonds by value or 4 percent by weight and yields 3 million to 5 million carats annually.

Recognized as one of Canada's top employers, the Ekati mine employs up to 2,000 workers and contractors. The mine is operated under a socioeconomic agreement that gives hiring preference to Northwest Territories residents and aboriginal northerners as well as other benefits to residents of the territory.

Company works in Arctic Canada

But why is Billiton interested in coal in Alaska's arctic coal?

"BHP Billiton is a global resources company and continues to look for attractive mining opportunities around the world," said spokesman Illtud Harri. "The company is already working in Arctic Canada and sees the potential for further expansion in Arctic Alaska, in a commodity in which the company is already a world leader, as a natural business extension."

Billiton has agreed to undertake an exploration program on ASRC acreage north of the Brooks Range in the western Arctic, inland from the Inupiat communities of Point Lay and Point Hope later this year.

Responding to questions Aug. 18, Harri told Mining News that it is too early for Billiton to comment on the extent of coal resources in Alaska's Arctic.

"This project is in its very early stages and requires extensive exploration, technical design, and environmental and community programs before we will be in a position to comment," he said.

ASRC has done estimate

ASRC, however, has developed a resource estimate based on its own extensive studies and some drilling activity. The Alaska Native regional corporation believes the region contains 4 trillion tons of high quality bituminous coal - one-ninth of the world's known coal reserves and one-third of U.S. reserves - within the Northern Alaska Coal Province, a broad belt extending 300 miles eastwards from the Chukchi Sea.

While ARSC estimates 2 billion tons of high-rank bituminous coal lies in the Western Arctic, the corporation has concentrated, so far, on one coal deposit in the region. This deposit, six miles from tidewater on the Chukchi Sea, contains an estimated 68 million tons of measured coal reserves for underground mining, with about 23 million tons of coal suitable for surface mining nearby.

"We estimate that through continued drilling an additional 50 to 100 million tons will become proven for this one deposit," ARSC said.

Western Arctic Coal is a clean-burning variety with an average of 0.23 percent sulfur, 3 percent moisture, 7 percent ash and a heating value in excess of 12,000 British thermal units per pound, according to a statement posted on the corporation's Web site.

In addition to exploration, Billiton has committed to continuing ASRC's environmental studies of the area and establishing a community consultation process.

Harri said Billiton was to begin meeting with the residents of North Slope villages in the Western Arctic during the week of Aug 21.

Should exploration results prove positive, BHP Billiton will begin project concept studies to determine preliminary feasibility and possible mine development.

 

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