Mining Explorers 2016: Mining brightens Alaska economy

The State of Alaska’s mining industry continues to be a bright spot for Alaska’s economy during difficult fiscal times.

Thanks to our world-class natural resource endowment, investors continue to be interested in new exploration and development opportunities in Alaska, and our large mines are still running strong.

Recently, our new Natural Resources Commissioner, Andy Mack, had the opportunity to visit the Fort Knox mine. This visit was a great opportunity for Commissioner Mack to become familiar with the operations of a large metal mine, and also to gain an insight into how Alaska’s strong regulatory and permitting process works for the mineral sector.

So far, the fiscal 2017 state budget reductions have not had a significant impact on our permitting staff, but we are concerned about maintaining the funding necessary to monitor federal planning and permitting, which can have a significant impact on the mineral industry in Alaska.

Further, to maintain our current level of service, DNR will need to look at opportunities for additional streamlining and updating our fee structures. It will be very difficult to continue some key functions within DNR without new revenue to support them.

I want to take this opportunity to commend the excellent work on many fronts by the Division of Geological & Geophysical Surveys over the past year. The division does an outstanding job of responding to mining industry requests, producing relevant and valuable information that stimulates exploration. When companies invest, they produce revenue for the state in the form of mining claim fees and rentals and benefit the economy by creating jobs and spending money in Alaska.

During the past year, the mining industry used DGGS geophysical and geological maps and reports in announced discoveries of a porphyry copper-gold deposit in Livengood. DGGS also released data in 2016 at the request of industry that resulted in the location of 32,000 acres (12,950 hectares) of mining claims in the Bonnifield mining district. Other notable mineral publications by the division include a preliminary report on mineral occurrences in the Tok River area and eight geochemistry reports containing almost 1,000 new analyses.

Despite the loss of state funding for airborne geophysical surveys during FY2016, DGGS obtained funding to fly a large fixed-wing survey in the Tanacross quadrangle, and smaller helicopter surveys at Icy Cape, and the Yukon River bridge crossing. DGGS is planning another large, U.S. Geological Survey-funded fixed-wing survey at the Canadian border.

This calendar year, the DGGS-run Geologic Material Center in Anchorage received a steady influx of new materials. Since opening in its new, larger location in July 2015, the center has received more than 20,000 boxes of additional drill and surface samples. These have been inventoried, curated, shelved and added to the database, a feat that would not have been possible without the increased operational efficiencies of the new facility. With legislation passed this year, the GMC will soon be instituting a fee-for-services program to fund facility maintenance and operation.

This year, the Division of Mining, Land & Water processed 305 placer mining applications, 65 suction dredge authorizations, and 48 hardrock exploration permits. Notably, 240 of the placer permits, 55 of the suction dredge authorizations and 44 of the hardrock exploration permits were for operations on state land.

Other notable activities in 2016 include the ongoing state and federal permitting process for the Donlin Gold project in the Yukon Kuskokwim region and the Chuitna Coal project near Beluga. The Corps of Engineers is the lead agency for the National Environmental Policy Act review of both projects. The draft EIS for Donlin was released to the public in November 2015 and a final EIS is anticipated to be released at the beginning of 2017. The draft Supplemental EIS and state and federal permit applications and draft decisions for Chuitna are currently scheduled for the early second quarter of 2016, with final decisions anticipated in 2017.

The Donlin Gold Project has the potential to bring significant economic relief to one of Alaska’s poorest regions. This project could become one of the largest gold mines in the world, employing up to 3,000 workers during construction, and then 1,000 to 1,400 people to operate the mine for 27-plus years. A project of this magnitude has many permitting challenges, and the State has a solid team of mining experts working closely with the project to ensure that the design and construction of the operation would meet our strong environmental standards.

At DNR, we rely on good, science-based information and data to support our permit coordination and decisions. We are also pleased that on the front end, we have been able to continue to provide good information to the mineral industry and the public to support future investment in Alaska. We wish all explorers the best of luck in the year ahead!

Ed Fogels is deputy commissioner of the Alaska Department of Natural Resources.