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Vol. 12, No. 8 Week of February 25, 2007
Providing coverage of Alaska and Northwest Canada's mineral industry

MINING NEWS: Mining and the Law: The miners are coming! The miners are coming!

J.P. Tangen

Guest Columnist

According to a recent World Trade Center Alaska report, for the 11-month period ending Nov. 30, 2006, mining exports represented more than 25 percent of the state’s foreign exports, and foreign exports constituted 10 percent of Alaska’s Gross Domestic Product. At $2 billion, mining was second only to seafood and twice the value of petroleum products.

With the gas pipeline trailing off over the distant horizon, the role of mining in Alaska’s economy during the next decade is destined to increase. Naysayers and NIMBYs should take notice: the industry is on its way in a big way. Furthermore, the mine workers in the state are starting to push back. Against the backdrop of the war of words that the Pebble project has spawned, the mine workers at Kensington have taken out paid ads challenging the directors of the Southeast Alaska Conservation Council by name.

Of course, there are plenty of things that can go wrong, but if metal prices remain high, then the public policy wonks, elected as well as self-ordained, will have to deal with the panoply of new issues that this emerging industry will present.

No revenues until mines operational

For one thing, the long-ignored matter of mining economics will have to be addressed. Legislators must be persuaded that the gestation period for a mine is often seven years. Unlike other industries where the tax revenue can be realized shortly after the cowboys come to town, mines have to be permitted, built and operational before they generate revenue.

Another bit of bad news is that latent xenophobia will have to be sublimated. Most mining money is raised on the Canadian stock exchanges, so the initial representatives on any project will have strong Canadian ties. Since Canadians are generally pretty nice people, that’s not a bad thing. Furthermore, their bucks are green by the time they get here. But the bad habit of pointing out that it is a Canadian mining company coming through the door needs to end. Besides, they hire Alaskans, and very frequently Alaskans who live close to the project, and that is a very good thing.

Rural projects have local impacts

Rural projects near Kotzebue and Delta have made big impacts in remote Alaska on folks who vote. Larger economies will continue to get their fair share of the economic pie, of course, but a 500-person workforce with spouses and kids needs nearby schools and malls. Sooner or later there will be a Starbucks in Nome and a Costco in McGrath.

Also sneaking up on the state is the educational process. As more kids know miners, they will be drawn to good-paying mining jobs. Mines need engineers and economists as well as drillers and core loggers. The University of Alaska Anchorage has nearly 100 students in its new geology department; and it will grow, in no small part due to the fact that these young workers will have no trouble finding mining jobs in Alaska this summer.

Now is a great time for Alaskans to make peace with the state’s mining heritage. Mining is coming to Alaska with more vigor than has been seen in over 100 years. May the devil take the hindmost.



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