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By Shane Lasley
Mining News 

Power trio speaks out on Alaska mining

Albanese, Murkowski, and Irwin share their perspectives on Alaska's mining industry at AMA conference in Fairbanks


Last updated 3/30/2008 at Noon

Attendees of the Alaska Miners Association Fairbanks Biennial Mining Conference had the honor of hearing the views of three heavyweights on many issues facing Alaska's mining industry.

Tom Albanese, CEO of Rio Tinto plc, says he is worried about the current political environment in Alaska.

Albanese, a featured speaker at the Mining Conference March 19, cited a recent mining industry survey by Canada's Fraser Institute lowered Alaska's rank to 34 in 2007 from 13 in 2005 among 68 jurisdictions where companies do business around the world.

Albanese said Alaska is not the only place where mining companies are being held to a higher standard. Increased expectations for how mining projects are managed and how stakeholders are engaged are "global phenomena," he said.

Albanese attributes Alaska's fall from grace on the global stage to controversy surrounding the proposed Pebble copper-gold-molybdenum mine in Southwest Alaska.

The mining industry as a whole and certainly Pebble are coming up against a "very well-organized, very well-financed, very sophisticated opponent," Albanese said.

The Rio Tinto executive advised the crowd to never underestimate the opposition.

Rio Tinto owns nearly a 20 percent interest in Northern Dynasty Minerals Ltd., one the two companies that own the Pebble Project in a 50-50 partnership. The co-owner is Anglo American plc.

Albanese said one of the problems Pebble is facing right now is that the project can currently be defined as an exploration, prefeasibility, or feasibility project. He said he has suggested to both of Pebble's owners that they initially pursue developing the higher-grade underground resource at Pebble East.

Albanese, who recently succeeded at Rio Tinto in rebuffing an unwanted takeover bid from BHP Billiton, said if either of the anti-mining initiatives, 07WATR or 07WTR3, currently headed to the ballot were enacted, mining investment in Alaska would be seriously affected.

However, in his opinion, the people behind the anti-Pebble effort made a tactical error by moving the debate from a regional issue to a statewide issue, Albanese said.

Alaska could help supply global demand

Albanese said global demand for base metals, especially China's rapidly growing hunger for mineral resources, is an important development. If the Alaska mining community wants to attract mining investment to meet this global demand, he said it needs to manage its involvement in stakeholder engagement that is growing ever more sophisticated.

In response to a question raised by its recent sale of the Greens Creek Mine to Hecla Mining Co., of whether Rio Tinto has left Alaska, Albanese replied, "Categorically, no!, Alaska has the providence for world-class resources," and he "sees lots of opportunities in Alaska for Rio Tinto."

U.S. Sen. Lisa Murkowski, R-Alaska, also addressed the subject of global demand for minerals in the context of mining law reform currently being debated in the U.S. Senate.

On the mining law reform legislation currently before the U.S. Senate, she told the conferees that the issues involved are complicated and controversial. She also said she does not expect a final draft of the bill to be ready for a Senate vote before the end of the legislative session.

A national minerals policy is another issue Murkowski said she is raising in Washington, D.C in mining law reform discussions.

"Minerals are no different (than oil and gas) in terms of our reliance on commodities," the senator said.

Murkowski also said the U.S. is dependent on foreign sources for more than half of its mineral supply. That, combined with China and India's growing demand for those same resources has her and others concerned.

"We are talking about a national stockpile of strategic minerals back in Washington D.C.," she said.

Miners, permitting process lauded

As for the controversial initiatives, Murkowski said they are not about responsible mining.

"They are all about no mining," she said.

Murkowski said mining opponents don't want to hear success stories of responsible mining in Alaska. She cited Fort Knox, Greens Creek, and Pogo as examples of environmentally responsible operations.

"The current slate of operators has earned that social license to operate," she said.

Alaska Department of Natural Resources Commissioner Tom Irwin echoed Murkowski's assessment.

He said the current large-scale mining operations in Alaska are examples of the success of the state's large-mine permitting process in Alaska.

Citing Red Dog and Fort Knox as examples, Irwin asked, "Have you heard much about the healthy fish they have downstream?

"Much more than when the mines started," he said.

Irwin told the conferees that when environmental groups point out mistakes made by mining, they are pointing at things that happen somewhere else.

"We have a strong functional process as evidenced by our operating Alaska mines," he added.

Administration supports resources development

While Murkowski and Albanese were outspoken on the initiatives, Irwin made it clear why he must remain silent on the issue.

"Folks you need to understand by Alaska law I cannot take sides on an initiative," he explained.

But the DNR Commissioner, who works closely with Alaska Gov. Sarah Palin, also reassured the audience. "The governor, the administration, I - we support resource development in this state," he said.

Irwin urged the conferees to read the Alaska Constitution, which supports resource development, and assured them that Palin knows the constitution well.

On behalf of the administration, Irwin said, "We support the constitution, and we support resource development."

Sen. Murkowski best summarized the message from all three speakers when she said, "The future of Alaska's mining industry is golden, (and) I urge my fellow Alaskans not to take the current level of mining industry interest in our state for granted."


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