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By Shane Lasley
Mining News 

Anti-mining initiatives worry Red Dog

NANA executive warns that 'dangerous and deceptive' proposals threaten future of existing mines as well as new ones in Alaska

 

Last updated 1/27/2008 at Noon



The Clean Water Initiatives that could come before Alaska voters in the general election next fall "are dangerous and deceptive proposals that Alaska cannot afford," according to a key executive at NANA Development Corp.

Rosie Barr, resources manager for the operating arm of NANA Inc., the Alaska Native regional corporation for Northwest Alaska, spoke out against the initiatives and outlined the economic benefits of the Red Dog zinc-lead mine to Alaska at an industry breakfast meeting Jan. 17 in Anchorage.

Red Dog is the largest zinc-producing mine in North America and a significant component of Alaska's mining sector.

Since the startup of the mine in 1989, Barr told members of the Resource Development Council of Alaska Inc. that NANA has received $177 million in payments and royalties from Teck Cominco Alaska, its partner in the lead/zinc mine.

Under a provision of the Alaska Native Claims Settlement Act, 60 percent, or about $110 million, was distributed to shareholders of other Native Corporations throughout the state.

The Red Dog Mine is located about 82 miles north of Kotzebue on land owned by NANA. The mine is a major contributor to the economy of northwest Alaska, not only with royalty payments, but also with more than $223 million in wages paid to more than 1100 NANA shareholders, Barr said.

The Red Dog Mine has enough ore to remain in operation until 2031 and at current lead and zinc prices, NANA could receive up to $6.5 billion in net proceeds, she said. Of those funds, more than $4 billion would be distributed to the other Alaska Native Corporations under ANCSA rules.

Initiatives could devastate Alaska mining

Barr also criticized several proposed Clean Water Initiatives. She said the initiatives would affect permitting and re-permitting of all mines that encompass at least 640 acres. Red Dog, with more than 1,000 acres, would be in this category, she said.

Red Dog should complete the mining of its main pit and intends to move to the adjacent Aqqaluk pit in 2010.

If Alaska voters approve the Clean Water Initiatives, Barr said Red Dog could be prevented from acquiring the permits it will need to begin mining Aqqaluk and that would shut down operations at the mine.

She said the initiatives also would prevent some of the basic actions performed by mines, including the stacking of tailings and water discharge.

"(The initiatives) would prohibit the release of water containing any amount of metals or chemicals, even if that water is cleaner than tap water and meets the stringent State of Alaska's water quality standards," she said.

For example, due to natural acid rock drainage on Red Dog Creek, the water body was not habitable for fish, Barr observed. But thanks to the water treatment system at the mine, fish have been able to move into Red Dog Creek and a fish weir had to be installed to prevent fish from swimming upstream from the mine where the water remains too mineralized to support fish, she said.

If the initiatives become law, Barr predicted that Alaska will lose thousands of existing and future jobs, as well as hundreds of millions of state and local revenue.

Overall, the Alaska economy could lose $10 billion or more in spending from just the mines that are in operation today, not to mention future mines likely to be developed.

The bottom line of the initiatives is "basically an end to mining as we know it," said Barr.

"It would shut down existing mines when they apply for new permits, which they do on a regular basis, and prevent future mines," she added.

 

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