The mining newspaper for Alaska and Canada's North

Mining is making it in the Last Frontier

Alaskans are well justified in celebrating an industry that has made such a vast contribution with its mineral production

It is difficult not to be optimistic about the future of the mining industry in Alaska these days. Although the industry is still No. 2 – as compared to oil and gas – it remains lucrative, safe and healthy. Predictably, that will remain the case for eons to come as new projects are brought online.

Economically, from Kotzebue to Juneau, mining's direct impact is significant. Nearly 14 thousand direct and indirect jobs can be attributable to the industry and those jobs can pay well. Likewise, more than $180 million was paid by the industry to the state and local governments in 2018 in taxes, rents and royalties.

The six large existing mines keep chugging along year after year, while exciting new potential entrants such as Donlin and Pebble plug away at the permitting process. An array of followers is not far behind.

We are blessed with a favorable political climate at both the state and federal level and there is a trickle, if not a stream, of positive rulings from the courts, acknowledging that Alaska is unique among the states, and that there actually are sideboards on how aggressive regulatory agencies can be.

The mining industry is unlike any other because its horizons are very long. Where no other industry would spend decades advancing a resource from a prospect to a paying project, it is not uncommon for that to occur when it comes to mining. Investors must be committed for the long haul, and frequently be prepared for frustration.

Over the past four decades of watching the industry take root, two things continue to astonish me – first, the time and dedication that is involved in being a miner wannabe and second, the great and lasting rewards of success.

Success is measured in many ways, such as good jobs characterized by a healthy, safe and positive work environment; a reasonable return to investors, the community and the world; and the contribution of necessary commodities to the global market.

Few outside the industry seem to acknowledge the contribution our industry makes, yet mining is one of the few industries that actually enlarges the economic pie.

Unlike the banking, high-tech sectors, government agencies, gas stations or any "value added" endeavors, mining and its sister resource development industries such as agriculture, fishing and logging grabs something out of nature and puts it into the hands of the artisans who convert it into things that makes all of our lives better. Sometimes, I think, people are blind to the source of the fundamentals, yet it is unimaginable to contemplate a world without lead or zinc or copper, not to mention silver or gold, just as it is unimaginable to contemplate a world without the cornucopia of foodstuffs found in any local grocery store.

It is an easy matter to challenge anyone in the 21st Century about where they would be without mining, yet those same folks are the ones on the corner demonstrating against one project or another – projects that make their very protests possible.

On a recent trip to five countries in eastern Europe, I had the opportunity to meet many people who had thrown off the yoke of dictators and tyrants and breathe the fresh air of freedom. It was stunning, however, to see the vast fields available for cultivation lie fallow and to learn that their entrepreneurial spark was barely alive.

Like all of us, they condemn their governments for not doing enough, yet the simple equation of commitment plus opportunity seems to escape their ken. My takeaway was that decades of induced cradle-to-grave dependency had precipitated a reversion to an earlier epoch, in that because they did not have to work to survive, they did not.

In country after country, the refrain was the same – their wages were low, their population was falling but they had free education and health care. Many individuals confessed that they longed for the next generation to assume the reins of power because their elected officials were "old school" and corrupt; but when those officials die things will be better.

Contrast that with modern America where until recently at least the mob at the gate was demanding more and more from the government, and oh, by the way, burden the productive sector with additional taxes and regulation, please. Politically, we can hope that nationally and locally America has assumed a new vector but touring the countries of the lower Danube can give you an insight into what happens when the mob prevails.

Alaska is lucky with its resources. Its mines will be around for a very long time to come and as new mines open the economic future will be bright. We have the resources and the skills to expand our own economic pie and that of the nation. To the extent that we have the political will our optimism will continue to be well-justified.


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