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Vol. 12, No. 47 Week of November 25, 2007
Providing coverage of Alaska and Northwest Canada's mineral industry

MINING NEWS: Mining values set records in 2006

Higher prices, world-class projects such as Red Dog, Pebble drive Alaska exploration, development, production, employment

Shane Lasley

Mining News

Alaska mining activity climbed to new heights in 2006 with the value of exploration, development and production exceeding $3.5 billion. Production values more than doubled, leaping to $2.86 billion from $1.4 billion in 2005, according to Alaska’s Mineral Industry 2006, an annual report released Nov. 7.

Continuing high zinc prices played a key role in the record-breaking tally for the industry, the report said. The Red Dog Mine north of Kotzebue, the world’s largest zinc mine, produced 614,538 tons (557,500 metric tons) of zinc concentrate and about 138,850 tons (123,500 metric tons) of lead concentrate in 2006. With zinc prices that dipped as low as 35 cents per pound in 2003 rising to nearly $2 per pound in 2006, Red Dog’s 2006 production was worth $1.54 billion, representing 44 percent of the value of Alaska’s mining industry.

“The information contained in this booklet — production figures, investment totals, workforce strength, and more — shows clearly that Alaska is successfully developing its mineral wealth for the good of our people. It is important for Alaskans to understand our mineral industry’s significant contribution to our state, especially in light of the increasing level of concern about mining’s impacts and ability to ‘pay its own way,’” said Natural Resources Commissioner Tom Irwin. “… Mining has become a significant contributor to our economy. ... Rural Alaskans in particular stand to benefit tremendously from the potential economic input to their regions. We must recognize the significant positive impacts that responsible mining can have for Alaskans.”

Alaska Gov. Sarah Palin said the men and women who make up Alaska’s mining community “carry with them a hard-won air of energy and optimism that says as much about the quality of their characters as it does about the economics of their industry.”

“Alaska is blessed with a vast array of natural resources, and one of the fundamental responsibilities of state government is to provide responsible stewardship and wise development of this endowment for the benefit of the people of our state,” she added.

All sectors up

Exploration spending statewide jumped 72 percent to a record high of $179 million, up more than $75 million from $103.9 million in 2005. More than $123.7 million, or 69 percent, of exploration spending went to investment in southwestern Alaska, the home of the Pebble project. Pebble represented Alaska’s largest single exploration target of the year, with its operators announcing a resource of 67 billion pounds of copper, 82 million ounces of gold, and 5.2 billion pounds of molybdenum, making it one of the world’s largest mineral deposits.

Spending on mine development climbed 42 percent in 2006 to a record $495.7 million from $347.9 million a year earlier. Continued construction of the Pogo gold mine southeast of Fairbanks, the Kensington gold mine project near Juneau, and the Nixon Fork Mine near McGrath drove this sector, along with startup of construction at the Rock Creek gold project near Nome.

Mineral production also soared in 2006, nearly doubling in value to $2.858 billion from the previous year’s total by $1.46 billion. Production volumes were up for all metal commodities, except zinc and were down for all non-metal commodities, except peat.

The industry also posted its 11th straight year of total production exceeding $1 billion, and its first-ever $2 billion-plus year of output. One factor was Pogo Mine coming on line with first gold production late in the year.

Mining related employment in Alaska mushroomed to more than 3,523 jobs, up by 700 positions in 2006.

The mineral industry paid a record $172.3 million in taxes, rents, royalties, and various fees to the State of Alaska and Alaska municipalities in 2006, up more than $111 million from similar fees paid in 2005. Mining companies also were the largest taxpayers in the City and Borough of Juneau and the Fairbanks North Star, Denali, and Northwest Arctic boroughs.

Special Report 61, Alaska’s Mineral Industry 2006, was prepared by the Alaska Department of Natural Resources Division of Geological & Geophysical Surveys and the Office of Economic Development in the state Department of Commerce, Community and Economic Development.

The 82-page special report is available in PDF format from the Division of Geological & Geophysical Surveys Web site, or on mini CD-ROM or in printed form from DGGS at 3354 College Road, Fairbanks AK 99709-3707; (907) 451-5020. Mail orders should be sent to the Fairbanks DGGS office, fax (907) 451-5050.

The report also will be available Nov. 30, at the Alaska Resources Library and Information Service, 3150 C St., Suite 100, Anchorage, and at the Historical Collection of the Alaska State Library in the State Office Building in Juneau.

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