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Alaska Metals Mining

Last Modified: 8th April 2014

Alaska has 5 major metal mines and numerous smaller mines in operation.  Currently proposed mines could dramatically expand the industry (see map).  Metal mining has a long history in Alaska, going back to the Klondike gold rush, both as an important part of the state economy and as a cause of environmental problems.  Existing metal mines produce valuable commodities, most notably gold and zinc, provide employment, and generate tax revenue.  Alaska has many large deposits of metal ore, including copper, gold, silver, and zinc, which have never been mined.

Controversies & Environmental Concerns

 Metals mining is a controversial topic in Alaska.  There is currently intense political maneuvering around the Pebble Mine, and multimillion dollar lawsuits in-progress over impacts from existing mines such as Red Dog.  Much of the concern focuses on impacts (real or potential) to water, fish, and wildlife.  Fisheries and tourism are also important industries in the state, and many remote communities are dependent on fish for food, making the environmental impacts of mines a social and economic concern.

Alaska Gold Mining: The relative size of past, present, and possible future gold production in Alaska

FULL FIGURE

Metal mining has a long history of severe environmental contamination outside Alaska.  According to the Environmental Protection Agency, mining has contaminated portions of the headwaters of over 40 percent of watersheds in the western continental U.S., and reclamation of 500,000 abandoned mines in 32 states will cost tens of billions of dollars.  Within Alaska, most mines and mining prospects have faced similar environmental problems, most notably water contamination, impacts of open-pit mining, and acid mine drainage.  Many existing and abandoned mines will require active treatment and maintenance forever to mitigate the impacts of the resource extraction.

Economics

Alaska's mining history began with gold.  Russian exploration for placer gold began in the early 1800's.  The subsequent gold rushes in the 1890's were responsible for a population and settlement boom in Alaska.  Since that time a large number of mines have opened and closed throughout the state.  Today, hand-prospecting of placer deposits is limited to small tourist and recreational mining.  The vast majority of metal today is extracted from large scale open-pit and underground mines targeting metal sulfides.  

Today, metals mining is a major industry in Alaska, but is small compared to the oil industry.  The total value of metal production and exploration in Alaska was just over $3.4 billion in 2012, representing around 7% of the gross state product.  Over half of this was produced by the Red Dog zinc mine and much of the rest by the Greens Creek , Pogo, and Fort Knox gold mines.  Mining returns around 3% of market value to the state, whereas oil/gas return around 20% of their market value.  In 2008, the oil industry paid over $10 billion in taxes to the state, providing over 80% of the state budget. 

The mining industry provides around 4,000 direct jobs(2010), and several thousand additional indirect jobs.  The seafood industry generates roughly 80,000 jobs total, and tourism 36,000 jobs.  Alaska's biggest job engines by far are the oil and gas industry and the federal government, each supporting well over 100,000 jobs.  

Because of the high value of mined metals, the total industry valuation ($3.4 billion) is disproportionately high per worker, compared to some other sectors of the Alaska economy.  However, it is unclear how much of this value is actually captured by the internal Alaska economy, and how much is exported out-of-state in the form of payments to out-of-state mine vendors, and profits to the various non-Alaskan mine owners.  Of Alaska's 5 major metal mines, only Red Dog mine is partly owned in-state, by NANA Regional Native Corporation.

Exploration

Prospectors are actively pursuing new mineral resources in Alaska.  Mining companies spent almost $331 million on exploration costs in 2012, a significant part of the industry's job contribution.  Most of these exploration efforts are being undertaken by foreign corporations, with 90% of the exploration costs incurred by Canadian corporations and a further 7% from overseas corporations.  The majority of exploration efforts occurred at the Pebble Mine, Donlin Creek, and Livengood prospects but work on smaller projects is also proceeding, such as on the Niblack Prospect in the southeast, and the Upper Kobuk Mineral Project in the Interior.

Alaska Hardrock Metal Mines Through Time: A timeline of metal mining in Alaska, from the known output of historical mines to the estimated reserve size of current mines and proposed future mines

FULL FIGURE

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By David CoilErin McKittrickBretwood HigmanGround Truth Trekking

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Date Created: 4th May 2010