Fort Knox gold keeps Alaska green

Alaska vendors reaped a share of $110 million spent last year to keep the open pit Fort Knox gold mine humming night and day, according to Lorna Shaw, community affairs director of mine owner Fairbanks Gold Mining, a subsidiary of Kinross Gold Corp.

The money went primarily to buy labor, power, and fuel, Shaw said, adding that even the small items are essential - items like toilet paper, for instance.

"We've got 400 people out there," Shaw said. "Consumable paper products - that's a lot of toilet paper; it can shut us down, literally."

The mine is located just north of Fairbanks on the road system, but it's far from manufacturers - just below the Arctic Circle - so advance planning is a must, Shaw said in remarks at the Pac Com meeting in Anchorage Feb. 22.

Shaw said the most of the mine's vendors must keep an expanded stock of inventory on hand in Fairbanks or elsewhere in state to respond quickly when the mine needs parts or re-supply. The mine keeps about $10 million of inventory stocked in its own warehouse, and vendors stock about $10 million more, she said.

300,000 ounces last year

The mine produced 300,000 ounces of gold last year, Shaw said. It takes a lot of hauling, crushing and grinding to produce that amount of gold. The company moved an average of 180,000 tons of material per day in 2005, Shaw said. It processed 55,000 tons of ore.

There is much wear and tear on equipment, and the equipment is big. There are two giant shovels backed up by loaders so big a single tire costs $43,000 - if you can get them. The boom in industrial activity worldwide has created a tire shortage.

The company's 20 haul trucks range from 85 tons to 240 tons, each taking six tires. The tires are $20,000 each, six per year per truck

"Without tires we can't run," Shaw said. "We're running tires as long as we can."

The ore transport conveyor belt is a mile long, and it used three rolls of replacement belt in 2005. Ore crushers need new liners every year.

Anywhere steel meets rock, there is expense. The cost of wear metal for ground engaging tools approached $1 million at the mine last year, Shaw said.

Fort Knox has 794 vendors in Alaska, and it's looking for more, Shaw said, adding that there will always be some far away suppliers. For carbon to soak gold from solution, plant operators prefer certain roasted coconut shells from Sri Lanka.