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Week of October 31, 2010
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Mining plays vital jobs role in Alaska

Geographical diversity and high-wages boost employment profile state’s mines, especially in regions where opportunities are scarce

Shane Lasley

Mining News

Mining is becoming increasingly important to Alaskans looking for good-paying jobs. Not only does the industry provide high wages, the geographical diversity of the mines provides employment opportunities to oftentimes economically challenged rural regions of the vast state.

According to the Alaska Department of Labor & Workforce Development, the number of mining jobs in Alaska has jumped 40.3 percent since 2000, almost triple the statewide average employment growth of 14.1 percent for the decade. This work force expansion is especially strong when compared with nationwide mining employment growth of only 1.5 percent for the same period.

“During the last 10 years, Alaska’s mining employment has outpaced the nation’s (employment) by nearly 40 percent and most of (the state’s) other private industries. These numbers do not include the self-employed who were especially important in the 141 placer mines operating across the state in 2009. Consequently, mining’s contribution to employment and earnings in the state could be underestimated,” state labor economists Alyssa Shanks, Mali Abrahamson, and Liz Baron wrote in the department’s latest report on the Alaska workplace.

According to the October edition of Alaska Economic Trends, the 2,126 miners in Alaska included in the state’s estimate brought home US$193.7 million in 2009.

Big paychecks for Alaska miners

Alaska miners brought home an average annual wage of US$91,100 in 2009, an amount second only to average wages earned by the state’s oil and gas workers, and nearly double the US$46,600 statewide average income for all workers.

The majority of the high-paying mining occupations do not require a college degree. According to the Department of Labor, 15 of the top 20 mining jobs require on-the-job training or previous work experience, while an associate’s degree or vocational training is a prerequisite for three other mining occupations. Only engineers and upper management require a bachelor’s degree or higher educations.

“One reason for the high earnings is that the industry employs skilled workers, including heavy equipment operators, miners, drillers, and others. These types of occupations tend to pay well without requiring a college degree. For example, the average mining machine operator is paid about $30 per hour,” the state economists wrote.

Geographical diversity

Alaska miners’ bring their hefty paychecks home to 26 out of Alaska’s 29 boroughs and census areas, helping to bolster the economies of many remote regions where other forms of incomes are scant. More than half of the state’s mining jobs are filled by rural Alaskans.

“Mines are often the largest, or among the largest, employers in their borough or census area. Mines also tend to be located in remote areas where other employment opportunities are scarce. In 2009, the Greens Creek, Red Dog, and Pogo mines were the largest private employers in Juneau, the Northwest Arctic Borough, and Southeast Fairbanks Census Area, respectively. The Fort Knox Mine and the Usibelli Coal Mine are both the third-largest employers in their respective boroughs,” state economists wrote.

Teck Resources Ltd. and NANA Regional Native Corp.’s Red Dog zinc-lead mine in Northwest Alaska is about as far off the beaten path as one can get and has become a case study for the employment opportunities mines can provide to rural regions.

Nearly 58 percent of the 550 full-time jobs at Red Dog are filled by NANA shareholders, many of whom have worked their way up to high-level positions at the mine. The mine has been in operation for two decades and recently permitted Aqqaluk, a deposit that is expected to extend Red Dog’s life another 20 years. As the local work force matures, it is expected that more and higher level Red Dog jobs will go to this primarily Alaska Native population.

In addition to employees working directly for Teck, two NANA companies — NANA-Lynden, a joint venture that provides trucking services, and NANA Management, which provides housekeeping for the mine — supply additional jobs for residents of the region.

Teck and the NANA companies together paid US$26 million in wages to some 310 shareholders in 2009. Much of these wages go home to the residents of the 11 villages spread out across the 38,000-square-mile, or 98 420-square-kilometer, NANA region.

Modern miners, historic gold towns

In terms of numbers of jobs, the Fairbanks North Star Borough in Interior Alaska was the largest beneficiary of mining. The Interior Alaska borough was home to 685 miners in 2009, more than any other borough or census area. Most of the miners in the Golden Heart City were employed at Kinross Gold Corp.’s Fort Knox gold mine just outside of the historic mining community.

Fort Knox is expected to continue mining ore until 2016, with heap leach processing to continue until around 2020.

If things proceed well, a mine could fire up production at International Tower Hill Mines Ltd.’s Livengood project about the time Fort Knox will wind down. Located about 65 miles, or 100 kilometers, north of Fairbanks, Livengood could provide continued employment to the city’s experienced miners.

Alaska’s capital city, Juneau, is another town that traces its roots to mining, but also continues to benefit from the industry. The Southeast Alaska town is home to 281 miners, most of whom work at Hecla Mining Co.’s Greens Creek silver-zinc-lead mine and Coeur d’Alene Mines Corp.’s newly opened Kensington Gold Mine.

“Juneau is steeped in mining folklore. At the turn of the last century, the city boasted three mines: the Alaska-Juneau at the south end of town, the Alaska-Gastineau at Thane, and, on Douglas, the world-renowned Treadwell Mine,” according to Hecla.

“The Hecla Greens Creek Mine is proud to be the latest chapter in Juneau’s rich mining history. Today, it’s the largest private employer in the area, with 270 people on an annual payroll totaling $26 million,” the company said on its website

Kensington, which began production in July, is expected to join Juneau’s top 10 employers after it puts a full year of gold production under its belt, according to state economists.

Exploring for new mining jobs

The State did not include jobs resulting from the hundreds of millions of dollars spent every year on exploration, engineering, environmental studies and the other activities required to convert raw prospects into operating mines in its tally of Alaska’s mining jobs.

Exploration and development spending peaked in 2008 at nearly US$750 million, and droped to US$499.9 million in 2009. The pull-back in this spending is partly attributed to cutbacks due to the global financial crisis that began late in 2008. Another major factor contributing to the reduced spending is that Alaska’s two largest exploration projects, Donlin Creek and Pebble, entered the pre-permitting stage.

The permitting stage, which is usually expected to last two to three years and typically takes longer due to litigation, is a period of reduced work force activity between exploration and mine construction.

NovaGold Resources Inc. and Barrick Gold Corp., partners in the Donlin Creek project, have said they intend to begin permitting the enormous gold project in 2011.

Construction, which could begin as early as 2014, is expected to bring around 1,000 jobs to the Kuskokwim region of Southwest Alaska. Once in operation, Donlin Creek, alone, would add some 600 mining jobs to Alaska’s total.

The 53,500-metric-ton-per-day mine proposed in a recent feasibility study is expected to produce about 1.6 million ounces of gold per year over its first five years of operation. Based on current reserves, the mine should produce about 26.2 million ounces of gold, or an average of about 1.25 million ounces per year, over a 21-year mine life.

The Pebble Partnership, a 50-50 joint venture between Northern Dynasty Minerals Ltd. and Anglo American plc, is not expected to begin permitting until at least 2012. Though a mine plan has yet to be completed by the partners, early estimates are that mine construction at the world-class copper-gold-molybdenum deposit could provide upwards of 2,000 jobs and operations could provide work for around 1,000 miners for some 60 years.

Pac Rim Coal’s Chuitna project on the west side of Cook Inlet is also nearing the permitting stage and has the potential to add several hundred additional mining jobs to the state.

“Alaska has more than 190 million acres of federal, state, and Native lands open for mineral-related activities and mining. This potential combined with high mineral prices suggests that mining will continue to play a vital role in Alaska’s long-term economic future—just as it did in the past,” the economists concluded.



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