More than oil across Arctic Slope region
ASRC seeks mining partners to explore, develop the zinc, silver, coal and other solid minerals found on Alaska's North Slope North of 60 Mining News – February 1, 2020
Last updated 9/26/2020 at 11:47am
It was the vast petroleum reserves lying under what is now the Arctic Slope Regional Corp. (ASRC) region and the need to build a roughly 800-mile pipeline to deliver oil to global markets that prompted the need to settle aboriginal land claims in Alaska and led to the passage of the Alaska Native Claims Settlement Act, commonly referred to as ANCSA.
Signed into law by U.S. President Richard Nixon in 1971 ANCSA involved a unique plan to organize Alaska Natives into 12 regional corporations, with each of these corporations having its own geographical regions based largely on heritage and shared interests.
The ASRC region covers roughly 95,000 square miles of Alaska's entire North Slope, a vast expanse nearly the size of Oregon that extends from the Brooks Range North to the Arctic Ocean and from the Yukon Border west to Point Hope – a vast and treeless arctic area settled by the Iñupiat ancestors of the approximately 13,000 current ASRC shareholders more than 10,000 years ago.
The hard work, perseverance, strength and ingenuity passed from these earliest adventurers that trekked into this new but foreboding region laid a foundation for the Arctic Slope Iñupiat to build ASRC into the largest Alaska-owned company.
"Iñupiaq know hard work at a cultural level. In our faces, you can see the strength, determination and inventiveness that flows from the very roots of our Iñupiaq culture," the ANCSA corporation wrote.
While the rich oil reserves lying under the Arctic Slope region, particularly under the roughly 5 million acres of lands selected for ownership by ASRC, is the primary resource that helped fuel the Iñupiat-owned corporation's success, the region also covers areas highly prospective for zinc, lead, silver, molybdenum, tungsten and coal.
While ANCSA is inexorably tied to the rich oil and gas discovered under the Arctic Slope region, this did not translate to instant financial success for ASRC.
Being a fledgling corporation vying for some of the richest petroleum real estate on Earth created early challenges, not only from corporate interests but also from large swaths of the region being off limits due to national interests.
For example, ASRC was prevented from selecting lands in the National Petroleum Reserve in Alaska (NPR-A), the nation's largest single block of public land, or the Arctic National Wildlife Refuge (ANWR), another large block of public land at the east end of the North Slope.
Established by President Warren Harding in 1923, the roughly 37,000-square-mile NPR-A was set aside as an emergency oil supply for the U.S. Navy. This West Virginia-sized track of land was transferred to the Bureau of Land Management in 1976.
ANWR, on the other hand, was designated as wilderness protection area in 1960, a designation that was formalized as a wilderness reserve with the passage of the Alaska National Interest Lands Conservation Act (ANILCA) in 1980.
These federal set asides took nearly half of the region off the table for land selections and ASRC had limited information about available lands in the other areas.
Despite these early challenges, by 1976 ASRC had selected much of its lands and received its initial 3-million-acre conveyance, making it the first Alaskan Native regional corporation to gain title to lands under ANCSA.
While gaining land ownership on the North Slope and subsequently signing oil and gas leases with some of the largest oil companies of the day – Union Oil, Amoco, Texaco and Chevron – provided critical revenue for the fledgling ASRC and its subsidiaries, the Arctic Slope Native corporation still had a tough financial road ahead.
As the regional corporations were going about implementing ANCSA, a major dispute arose over how to interpret ANCSA Section 7(i), a way to bring balance to regional and village corporations by sharing of net revenues from resource development on ANCSA lands.
In 1982, a 7(i) settlement agreement was signed, which set out in very certain terms how resource revenues would be shared among all 12 regional corporations.
ANCSA Section 7(i) requires regional corporations to distribute 70 percent of net revenues from resource development on ANCSA land among the other regional corporations. In turn, Section 7(j) requires that half of the Section 7(i) payments received are distributed to the respective village corporations within each of the ANCSA regions.
This put ASRC in the position of owing $7 million in back 7(i) payments to the other regions, a significant amount for a corporation trying to get on its feet.
Faced with a financial crisis, the leaders of ASRC came up with an ingenious solution – trade surface estate it owned within the Gates of the Arctic National Park for subsurface mineral rights under the village of Kaktovik and within ANWR.
The Kaktovik Iñupiat Corp. (KIC), a village corporation, owns the surface rights to this 92,000-acre land package.
With this area of ANWR now open to oil and gas development, ASRC stands to benefit from the foresight of the land exchange, benefits that will flow out to the other ANCSA regions under Section 7(i).
More than petroleum
While oil and gas are the primary drivers for ASRC, the Arctic Slope region also has hardrock mineral potential, especially at the west end just north of the world-class Red Dog zinc mine.
On lands owned by NANA Corp., the ANCSA corporation for Alaska's Northwest Arctic, Red Dog produces roughly 1.3 billion pounds of zinc per year, or about 5 percent of the world's new supply of the galvanizing metal, along with healthy supplies of lead, silver and germanium.
Kuna Formation, a package of black shale and chert that hosts the Red Dog deposits, extend north into the ASRC region.
The Arctic Slope ANCSA corporation said eight areas based on geological and geochemical merit have been recognized within the ASRC region, which is only about 10 miles north of the Red Dog Mine.
Geochemically anomalous zones in the ASRC region exhibit high concentrations of zinc, lead, silver and pathfinder elements such as barite, cadmium, manganese, vanadium and nickel.
Though very little exploration has been carried out in this area, several occurrences of disseminated sulfide mineralization have already been discovered.
ASRC seeks a mining company to explore, develop and mine deposits, which may be located on its lands.
World's coal storehouse
The western half of the ASRC region also hosts enormous stores of high-quality coal.
Northern Alaska Coal Province, which extends east across 300 miles of the ASRC region from the Chukchi Sea, hosts an estimated four trillion tons of high-quality bituminous and subbituminous coal. This accounts for roughly 11 percent of the world's known coal resource and about 33 percent of the U.S. resource.
Exploration by a large mining company working in partnership with ASRC identified approximately 2 billion tons of high-rank bituminous coal resource in the Western Arctic.
ASRC said that exploration thus far has concentrated our studies on a single coal deposit located only six miles from tidewater on the Chukchi Sea.
The Arctic Slope corporation said drilling has upgraded more than 100 million tons of coal in the Western Arctic Coal deposit to reserves for mining and estimates another 50 to 100 million tons could be added to the reserves of this one near coast deposit.
Not only is the Western Arctic Coal deposit world-class in size, the coal there is premium quality and ultra-low sulfur. According to ASRC, Western Arctic Coal averages 0.23 percent sulfur, 3 percent moisture, 7 percent ash and has a heating value in excess of 12,000 British thermal units (BTU) per pound.
This provides an environmentally preferred alternative to lower quality coals presently utilized for power generation. With many Pacific Rim nations moving to stricter environmental standards for coal generated power, using Western Arctic Coal as a blend would reduce sulfur dioxide emissions.
ASRC said early results from studies of the economic feasibility of mining Western Arctic coal are encouraging and the ANCSA corporation is seeking a mining company to explore and develop its coal deposits.
"Alaska's North Slope could be the world's coal storehouse for the next century," ASRC penned on its website.
Solid mineral potential
The Arctic Slope region is also believed to host one of the largest deposits of tungsten in the U.S. Because it is inside ANWR, however, there is little chance this critical mineral occurrence known as Bear Mountain will be developed into a mine in the near future.
During visits to Bear Mountain in the 1980s, U.S. Bureau of Mine geologists James Barker and R.C. Swainbank identified a 100-acre area of surface mineralization indicative of a large porphyritic molybdenum-tungsten deposit.
Analysis of 20 soil and 36 rock samples collected during 1985 returned abundant tungsten and molybdenum along with lessor amounts of niobium.
Soil samples collected over roughly 75-acres returned tungsten values of more than 500 parts per million wolframite, with the best samples containing 5,000 ppm of this tungsten mineral.
"I believe Bear Mountain to be likely the most important tungsten deposit in the U.S.," Barker, who has extensively studied Alaska's critical mineral potential, told Mining News.
As important a tungsten resource as Bear Mountain is, its far northeast Alaska location inside ANWR will likely prevent its development.
"It's a shame that mineral evaluations aren't done before we place an area off limits," Barker reflected.
While Bear Mountain may be off limits, ASRC owns extensive deposits of gravel that are strategically located near villages, petroleum development, and high-potential resource areas.
While this gravel may not be considered critical to the U.S., it is vital for oilfield, pipeline, industrial and community infrastructure development in Arctic Alaska.
So, while Alaska's North Slope oil and gas led to settling Alaska Native land claims, and has been a major economic driver for ASRC, the Arctic Slope hosts more solid minerals that could play a role in the future of the region and its people.