North of 60 Mining News - The mining newspaper for Alaska and Canada's North

The Northwest Arctic Borough and Teck Alaska, operator of the Red Dog Mine, May 3 announced that they have finalized a new 10-year payment in lieu of taxes agreement.

Under the terms of the agreement, Red Dog would flow roughly US$20 million to US$26 million into the borough each year under the new agreement. Roughly US$14 million to US$18 million of these funds would be paid directly to the Northwest Arctic Borough each year, a payment that would be calculated on a percentage of Red Dog's fixed asset value.

The agreement also includes the establishment of a new village improvement fund. Administered by the borough, with input from the 11 villages it encompasses, this fund would be earmarked for community programs, services and infrastructure.

"This agreement is a good outcome for the borough and its residents. It will create additional revenue for services, projects, and long-term sustainability," said Northwest Arctic Borough Mayo Clement Richards. "It's taken several years, but we're pleased to have reached an agreement that will go some lengths to helping meet the needs of our residents, which comes at a critical time when state community revenue sharing dollars are being phased out."

With the new PILT agreement in place, Red Dog is exempt from a severance tax adopted by the Northwest Arctic Borough assembly in 2009 and updated in 2015.

With the new agreement, Teck has agreed to discontinue the legal action it took in opposition to the severance tax.

"This agreement will provide enhanced resources for the region while also supporting Red Dog's ability to continue generating good jobs and local economic opportunity," said Red Dog General Manager Henri Letient. "We're pleased with this outcome which was achieved through cooperation and constructive dialogue between Red Dog, the Northwest Arctic Borough and NANA."

Red Dog was developed through an innovative operating agreement between Teck and NANA, an Alaska Native regional corporation owned by the Iñupiat people of northwest Alaska.

NANA owns the land that holds the deposits at Red Dog and the mine's mill facilities, and receives 30 percent of the net proceeds from the operation.

-SHANE LASLEY