Mining under the microscope in Juneau

For a change, Alaska's large mines received praise from an environmentalist during public testimony in the legislature about House Bill 156, the mining tax bill, March 21. Kate Troll, executive director of the Alaska Conservation Alliance, which is a coalition of 40 groups, said that both Greens Creek and Fort Knox are in compliance with all the environmental regulations. Her comments were made in an effort to demonstrate that it is possible to support a tax increase without wishing to kill the mining industry.

"Greens Creek mine is one that dry stacks the tailings, and that is definitely a preferable way of minimizing the environmental impact," Troll said.

She did not point out that Fort Knox is an open pit mine with a conventional tailings impoundment in an artificial body of water.

"The Alaska mining industry makes a minimal fiscal contribution to the State of Alaska when compared to other high-value resource industries," Troll told the House Special Committee on Ways and Means.

"We feel that we owe it to our fine constitution to review this antiquated tax system.

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I think that these modest adjustments are reasonable and would not create an inhospitable environment (for industry)," she added.

There is heightened interest in the mining industry in the Legislature at present, partly due to the high-profile Pebble project and the lawsuit against the Kensington project's proposed tailings facility. Rep. Peggy Wilson, R-Wrangell, wanted to know why it wasn't possible for all mines to dry stack their tailings. Steve Borell, executive director of the Alaska Miners Association, asserted that Fort Knox would never have been developed if it had been compelled to dry stack its tailings, because of the higher cost of that technology.

"I was very pleased to hear that the 40 environmental groups approve of tailings impoundments," Borell said. Kensington's developers tried to work with environmentalists, but could not avert a lawsuit, he noted. "There needs to be some accountability, and I don't mean from the mining companies," Borell added. "At some point somebody has to say, hey, enough's enough."

Changing the tax structure now, when metals and coal prices are high, would be seen as "bait and switch," Borell told the committee. Rep. Bob Roses, R-Anchorage, suggested that under HB 156, according to his calculations, a small miner might pay less taxes than in the current system, because that miner would have to make over $250,000 before paying the amount of tax he pays now. Earlier, Roger Burggraf, a small miner from Fairbanks, had testified that the new proposed tax structure would be detrimental to his business.