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State’s mining reputation stymied by policy issues Legislators and administration staff learn that global mining representatives view Alaska’s policy and regulatory issues as roadblocks to resource development, industry commission makes recommended changes Patricia Jones PNA Contributing Writer
State legislators, commissioners and staff members of the new Murkowski administration learned last week of Alaska’s slipping reputation among the global mining industry as a place to explore and develop mineral deposits.
In a joint House and Senate Natural Resources Committee presentation on Feb. 19 and at a commissioners’ and administration staff meeting the next day, Fairbanks-based consulting geologist and columnist Curt Freeman presented results of an annual mining industry survey conducted by the Fraser Institute, an economic think tank based in Vancouver, B.C.
Alaska’s ranking in the survey of investment attractiveness slid from seventh in 2001 to 15th in 2002, out of 47 states, Canadian provinces and countries with mining activity throughout the world.
Most of that decline came from the state’s low ranking in the policy potential index, Freeman said, an area where legislators and the administration can make positive changes.
“They were asking what are our priorities, and what can they do to help,” Freeman said, following his series of mining industry presentations in Juneau last week. “It was worth doing, although I don’t know where it will go or what kind of results we’ll see.”
Freeman’s presentation came late in the legislative committee meeting, following presentations from some of the state’s large mining operations. Bill Jeffress, recently named director of the Division of Governmental Coordination, noted the attention legislators and staff paid to Freeman’s presentation.
“That’s the reality in Alaska — how Outside people view the state,” Jeffress said, during a brief speech at the Feb. 21 meeting of the Fairbanks chapter of the Alaska Miners Association. “It went over really well. … I think the message got out.”
50 percent score unacceptable The Fraser Institute surveyed potential effects on exploration from taxation, environmental regulations, administration and duplication of regulations, uncertainty concerning Native land claims and protected areas, labor issues, infrastructure, socioeconomic agreements and political stability.
In the 2002 survey, Alaska’s policy potential scored 50 points out of a possible 100, for a ranking of 23rd out of the 47 mining jurisdictions. Freeman said that perceptions about Alaska’s regulatory and land use policies were specific areas that caused the state’s ranking to slip.
That 50 percent ranking for Alaska’s policy potential index is “not acceptable,” said Tom Irwin, commissioner of the Department of Natural Resources, in an interview with Petroleum News Alaska. Formerly general manager of the Fort Knox gold mine near Fairbanks, Irwin said he has watched the Fraser survey results for years.
“People vote with their dollars — they’re spending exploration dollars somewhere else,” Irwin said.
In his presentation, Freeman said that four out of 10 companies surveyed reported strong deterrence from investing in Alaska’s mineral industry because of the state’s environmental policies, the state’s land status and the lack of infrastructure.
Furthermore, one-quarter of the survey respondents said regulatory uncertainty and regulatory duplication were strong deterrents to mining exploration investment in Alaska.
“The timeline for when they will find out (permitting status) is another area companies are concerned about,” Freeman said. “They want the path to success or failure reduced. If their project is not going to make it, they want to find out sooner.”
Irwin is optimistic that the state’s reputation will soon change. “Mining companies will soon realize and note the difference in how people relate to them in government.”
Commission recommends policy changes Some of these issues in Alaska’s public policy reputation in the global mining industry have been outlined with recommended changes in an annual report produced by the 13-member Alaska Minerals Commission.
The report, released late in January, outlines seven specific recommendations for the governor and Legislature that would assist the state’s mining industry.
Those recommendations include: eliminating frivolous litigation by limiting “public interest litigant” status, increasing efficiency of mine project permitting, updating water quality standards, assisting in infrastructure development that benefits mining and other industries, resolving land tenure, navigability and right of way access issues, acquiring baseline geological and environmental knowledge statewide and promoting industry education.
Freeman, in an interview with PNA, also noted the detrimental effects of public interest litigation on mine permitting projects. “Companies don’t want to be dragged around for years in lawsuits filed by people with no legal liability.”
One solution, the commission noted, is to modify existing state statutes to eliminate the “public interest litigant” status for groups or individuals who have prior opportunities for public input and administration appeal.
“Furthermore, the prevailing party in such civil action shall be entitled to an award of attorney fees and costs as in other civil actions,” the commission wrote, a change that would place financial responsibility on parties that file and lose lawsuits to block developments that have already been awarded permits.
Irwin, now DNR commissioner, was among the 11 industry representatives on the Alaska Minerals Commission presenting the written recommendations for the state’s mining industry to the Legislature and the governor’s administration.
“We have so much to offer in Alaska, and we can solve some of these problems, like a streamlined permitting process, building roads — these are real priorities of the governor,” Irwin said. “We can really do something about this and we’re going to do that.”
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