By Rose Ragsdale
For Mining News 

AIDEA opens bids for Skagway project

Three companies seek construction contract in reactivation of ore terminal; agency inks pact for Homer Electric to run coal plant


Last updated 12/24/2006 at Noon

The State of Alaska moved one step closer Dec. 15 to reopening the Skagway Ore Terminal in mid-2007 when the agency handling the reactivation project opened three bids for major construction work needed at the facility.

The Alaska Industrial Development and Export Authority bought the terminal in 1990 to bring stability to the business of shipping ore through the 6.7-acre waterfront facility, then a year-round industry. The terminal ceased operating in 1998 when soft metals prices forced the Yukon Territory's zinc mines to shut down.

AIDEA aims to reactivate the terminal in time to receive copper concentrate from a new Yukon mine for shipment to Asian smelters in June 2007. The agency budgeted a total of $25 million for the project.

Higher coal and metals prices have renewed interest among Canadian mining companies in exporting ore through the Skagway terminal. AIDEA officials have said this need and the possibility of using the terminal as a staging area for pipeline materials required in the construction of gas pipelines across northwestern Canada led to the reactivation decision.

Since then, AIDEA has entered a project reimbursement agreement with Sherwood Copper Corp., which is planning to begin copper and gold production in the second quarter of 2007 at the Minto mining project in northern Yukon Territory.

The agency continues to perform due diligence under the agreement and talks with Sherwood Copper are ongoing, said AIDEA project manager Becky Gay.

A significant amount of renovation of the terminal will be needed before ore shipments can begin. The work will include construction of a new concentrate storage building on an existing foundation and a new truck unloading facility as well as installation of a new dust control system. Demolition and renovation of other major areas of the terminal are also planned.

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AIDEA hired R&M Consultants Inc. with sub-consultants R&M Engineering Juneau, Sandwell Engineering, MBA Engineering Consultants and Ridesic Consultants Inc. to perform planning, design, and bid phase services along with construction phase engineering and oversight.

Three Alaska companies bid for the construction and renovation work:

• Hamilton Construction LLC of Skagway, $5,867,868.95;

• West Construction Co. of Anchorage, $8,771, 207; and

• Alaska Mechanical Inc. of Anchorage, $7,017, 400.

AIDEA had not chosen a winning bidder by press time.

Healy plant gets new manager

Homer Electric Association signed an agreement with AIDEA in November to run the agency's 50-megawatt clean coal power plant near Healy. AIDEA owns the plant, which was mothballed after its construction in the 1990s for nearly $300 million. Homer Electric conducted an engineering review and inspection of the facility earlier this year and concluded that the plant could be operated at a competitive price using its clean coal technology.

Under the agreement, HEA will manage the work needed to restart the plant, while AIDEA will pay for the work and continue to own the plant.

Gay said AIDEA, meanwhile, had entered mediation to resolve an ongoing dispute with Golden Valley Electric Association about the Healy plant's operation. She said a number of issues must be resolved before the plant can begin operation because GVEA owns the land on which the power plant is situated among other things.

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