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Vol. 18, No. 32 Week of August 11, 2013
Providing coverage of Alaska and northern Canada's oil and gas industry

AK-WA Connection 2013: Big mine projects can bring big benefits

Donlin, Pebble court locals to fill worker ranks; high-wage mine jobs could save economies of Yukon-Kuskokwim, Bristol Bay regions

Rose Ragsdale

Alaska-Washington Connection

The giant mine projects at Donlin Gold and Pebble could potentially invigorate the economies of two of the poorest regions of Alaska, especially if they follow in the footsteps of the huge Red Dog zinc-lead mine that has brought 20 years and counting of high-wage, stable employment to Northwest Alaska.

Red Dog is one of the largest producers of zinc concentrate in the world and the largest taxpayer in the Northwest Arctic Borough. In 2012, the mine, located about 25 miles north of Kotzebue, employed 604 workers, including 137 contractors, of which 57 percent were local residents. Red Dog’s employees earned average wages exceeding $109,000 in 2012, and studies show they are the most stable workers in the region.

Work force development leader

The Donlin gold mine project, located on Calista Corp. land in a remote area near Crooked Creek, Alaska, is expected to employ 3,000 workers during construction and up to 1,400 operations workers, including contractors, for more than 27 years. The workers will staff the mine and mill, a natural gas pipeline to the mine and two river ports to aid in transporting mine supplies and equipment.

Though still years away from pouring first gold, Donlin LLC, a 50-50 venture between Barrick Gold Corp. and Novagold Resources Inc., is already working toward developing a viable local work force.

Residents of the Yukon-Kuskokwim region number 25,220, of whom about 90 percent are Alaska Native Yu’pik and Calista shareholders, and live in 48 permanent communities and eight seasonal villages.

Already a year into a three-year permitting process expected to be followed by mine construction and production, Donlin has emerged as a leader in local-hire work force development in Alaska mining.

“Donlin has shown that commitment already with 90 percent shareholder hire,” said Meg Day, the company’s human resources manager.

Working closely with Calista, Donlin management is not only recruiting and training local workers but also hiring and training local residents as on-site supervisors. The company offers two weeks on – two weeks off work schedules that appeal to rural Alaskans who enjoy subsistence lifestyles. As a result, Donlin has enjoyed near-zero turnover at its mine camp.

Today, the company is busy identifying and assessing the skills of the region’s labor force, preparing training programs and encouraging young residents to pursue college degrees in mine-related fields such as science, math and engineering. Initiatives include contributing funds to the Calista Heritage Foundation for college scholarships, offering internships and job shadowing opportunities to high school students and encouraging younger students to stay in school.

“Between us and Calista, we’re establishing a good snapshot of skills in the region,” Day said. Donlin is also focused on delivering the message in the region’s schools that the mine will be an employer that provides attractive career opportunities close to home, she added.

Invaluable jobs at Pebble

The 2,900 direct and indirect jobs that the Pebble copper-gold molybdenum mine could bring to the Bristol Bay region of Southwest Alaska could save the area’s economy, according to mine proponents.

Though the region currently boasts a $1.5 billion commercial fishing industry, less and less of the fishery’s value reaches the local economy.

A University of Alaska Anchorage study showed that 59 percent of drift net permits for the lucrative salmon fishery are held by people who live outside Alaska; primarily in Washington and California, and 75-80 percent of workers hired to fill the fishery’s five- to six-week low-paying, seasonal jobs come from outside Alaska.

Combine that with the region’s exceedingly high cost-of-living, it is little wonder that Bristol Bay’s 37 or so communities are plagued with chronic out-migration and substantial poverty.

“From the beginning, this project, for me, is about not only stabilizing the economy out there, but also allowing the people who have had to move away from the Bristol Bay region to move back home,” said John Shively, president of The Pebble Limited Partnership.

In addition to 915 operating jobs, Pebble, a 50-50 joint venture of Northern Dynasty Minerals Ltd. and Anglo American plc, could bring another 2,000 indirect jobs to the area, along with critical infrastructure such as an 85-mile railroad from the western shore of Cook Inlet to the mine site. This artery could make goods, including fuel, available to local villages at lower costs.

But what are the chances that Pebble will be able to hire mine workers locally?

“If you look at Red Dog, 50-60 percent of its employees are Nana shareholders. So it’s clear to me that Alaska Native people can be trained for these jobs,” Shively said.

But of the 7,000 people who live in the Bristol Bay region, 4,000 comprise a prospective work force for the mine, said Pebble human resources manager Josie Hickel.

“We have a goal of maximizing our local work force, but getting a local work force at the mine will be a big challenge,” Hickel said in an interview.

With drilling programs and environmental studies moving forward on the project, Pebble currently employs 182 people – 45 percent of whom live in the region – as drillers, driller helpers, bear guards, geo techs, core sawyers, administrative and support people and transportation staff.

When the mine begins production, a full camp will require a full complement of support workers, skilled tradesmen, miners and scientists.

Like Donlin, Pebble is working toward meeting its local hire goals with internships, teacher education programs, scholarships for vocational training in welding, electrician and culinary skills and $350,000, so far, in college scholarships for students studying mining-related fields and in health and education to help sustain communities in the region.

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