Mining Explorers 2011: Alaska takes strategic initiative

A thriving minerals industry is essential for Alaska's economic growth. If Alaska were a country, we would be among the top 10 countries in the world for coal, zinc, copper, lead, zinc, and silver resources. By responsibly developing these resources, we have the potential to support the economies of entire regions of the state and help secure a stable domestic supply of minerals.

The Parnell Administration is focusing on ways to advance mining opportunities in Alaska in an environmentally responsible way. A major step in this direction is the Secure Alaska's Future - Strategic Minerals Initiative, which Gov. (Sean) Parnell unveiled in late September. This initiative is designed to help grow our economy and contribute to our country's welfare through the assessment, development and processing of Alaska's strategic minerals, including rare-earth elements REEs.

We recognize that mineral exploration, development, and production can provide jobs and new economic opportunities for entire regions of the state. The Red Dog zinc and lead mine near Kotzebue, for example, is an economic engine for the Northwest Arctic Borough and is, by far, the region's largest private-sector employer. Revenue from Red Dog has funded school construction, critical public services, and infrastructure in the region, not to mention hundreds of jobs for Alaska Native shareholders in the NANA region. Furthermore, profits from Red Dog are shared with other Alaska Native corporations and their shareholders throughout Alaska.

The mineral industry's value to Alaska is increasing.

We have six large operating mines and at least a half-dozen potential mines in advanced exploration.

Last year, the value of Alaska mineral production shot up to US$3.1 billion from US$2.5 billion in 2009.

Mining exploration is also booming.

Mining companies pumped over US$557 million into Alaska for exploration and development in 2010, and the state received about one-third of all mineral exploration money invested in the United States, with 34 projects each receiving over US$1 million in investment.

We benefit not only from increased revenue for state coffers but also from thousands of jobs for Alaskans in direct and indirect employment.

Mining companies pay some of Alaska's highest wages - a recent industry estimate puts the average annual mining industry wage at US$95,000.

That's double the state's average wage.

Administration's strategy

On Sept. 30, we hosted a sold-out Alaska Strategic and Critical Minerals Summit in Fairbanks with participation from more than 200 people, including Gov. Parnell, the Alaska Congressional Delegation, top state, federal and university scientists, mining executives, exploration geologists, Alaska Native leaders and foreign government representatives. The discussions were lively, new connections were made, and many participants left the summit with great hope that a new opportunity has opened to expand Alaska's mining industry and enhance our national security.

During the summit, Gov. Parnell announced Alaska's five-part strategy on strategic minerals including REEs -a group of chemical elements used in radar systems, avionics, satellites, renewable energy systems and consumer electronic goods. Strategic minerals are those minerals identified as essential for domestic use and whose supply is threatened. China, for example, supplies nearly 97 percent of the world's REE production and has taken steps to restrict its supply to other nations. Alaska can help: We have at least 70 occurrences of REEs and one of the nation's most significant REE prospects, the Bokan Mountain project in Southeast Alaska.

Our strategy involves: 1) undertaking a statewide assessment of our strategic mineral potential; 2) providing incentives for the development of known or highly-prospective strategic mineral occurrences; 3) making improvements in the structure and efficiency of our permitting processes to expedite responsible development of projects; 4) strengthening partnerships and cooperation with other government entities, Native corporations, and potential developers; and 5) attracting new investment and markets for Alaska's mineral resources.

Assessing potential

The state is funding a statewide assessment of strategic minerals occurrences in Alaska, with US$500,000 budgeted for this work so far. We will need to gather data, improve industry access to data and partner with universities, the U.S. Geological Survey and other researchers, not just to understand our resource base but also learn all the steps involved with processing these minerals.

Our assessment includes compiling a digital database of all available data on REE occurrences in Alaska and going out into the field to investigate them. We are also analyzing samples archived at our Geological Materials Center from areas that have high REE potential, and we intend to publish those findings.

Incentivizing development

Infrastructure is essential to developing our resources. A key player is the Alaska Industrial Development and Export Authority, which has a strong record of helping provide the necessary boost to major industrial projects in our state through public-private partnerships.

The State Legislature has appropriated US$75 million in bonding authority for infrastructure projects that will advance mining development and roughly US$1.5 million for studies to construct a road to the highly-prospective Ambler Mining District. We will look for additional opportunities to spur development, including roads, ports and power facilities.

Permitting reform

As Gov. Parnell stated recently, we are reviewing regulatory hurdles that are specific to the mining, processing and transportation of strategic minerals.

We already have undertaken an initiative that will increase permitting efficiency for both small and large projects in the state - all projects, not just mining. A principal component of the initiative is to process a backlog of 2,500 pending land- and water-use authorizations within three years. Thanks to funding support from Gov. Parnell and the Legislature, we are hiring the additional staff needed to process these applications in a timely manner.

We recognize that the permitting system itself needs to be improved. This fall, the Department of Natural Resources is holding public meetings across the state to gather ideas on how the state's permitting process can be more efficient, timely, and predictable without compromising our high environmental standards. We also have created a DNR Web page for ideas to be submitted electronically (http://dnr.alaska.gov/commis/priorities/permitting_reform.html).

Deepening collaboration

The state is leveraging its strategic minerals assessment by seeking a close working relationship with the federal government, Alaska Native corporations and others. The state has been meeting with officials at the White House to explore ways that the federal government can partner with Alaska to find permitting efficiencies and collaborate on data collection and research.

Among other requests, Gov. Parnell has asked the Obama Administration to direct the U.S. Geological Survey to partner with the state in conducting an inventory of strategic minerals on federal lands and to coordinate with state agencies and permit applicants during the federal permitting process.

Attracting investment

Our state agencies are promoting Alaska's mineral resource wealth to the rest of the country and overseas markets. We are touting our vast resource base, our high environmental standards and our aggressive plans to invest in infrastructure.

Our efforts are informed by Alaska's Constitution, which requires us to make state land available "for maximum use consistent with the public interest." By combining our ingenuity and our world-class resources, we can maximize our land's potential, bolster the state's economy, provide for our schools and communities, and maintain our position as a strategic resource for the nation.

Daniel S. "Dan" Sullivan is Alaska's Commissioner of Natural Resources.