Alaska's mining industry forges ahead.

• Author: Phelps, Jack e.
• Position: Includes related article

In 1885, when Americans were just becoming aware of the great mineral wealth under the ground in the northwestern reaches of the continent, President Grover Cleveland spoke to Congress on the subject. "|T~he discovery of mineral wealth in the |Yukon~ territory," Cleveland said, "... admonishes that the time has come when an accurate knowledge of the |Alaska-Canada~ boundary is needful to avert jurisdictional complications."

Alas, poor Grover! How little he knew about "jurisdictional complications." American mining companies are now faced with a bureaucratic quagmire involving the jurisdiction of federal and state agencies unimaginable in the 19th century. Add the complications in Alaska introduced by Mental Health Trust litigation, and you have a formula for frustration.

As one industry expert put it recently, American miners are subject to "an overly zealous regulatory atmosphere." As an example, Joe Usibelli Jr. pointed out in an interview last year that a single mine can be required to answer to 100 different government offices and agencies. Usibelli Mining Co., he says, spends more than 20 percent of its total operating costs on the permitting process.

So then, is Alaska's mining industry healthy? Or is it terminally ill? Despite some formidable challenges in both the near and long-term future, the evidence says that the mining business in Alaska is both vigorous and strong.

"The situation on state land in Alaska looks favorable for mining right now," says Mitch Henning, a geologist with the state's Division of Mining. "Our land situation is stable, our tax structure only requires a 3 percent net profits royalty, and politically we like to think that we provide better stability than some other places, like South America."

Steve Borell, executive director of the Alaska Miners Association, agrees. "Alaska's mining reclamation statute is logical and reasonable while still ensuring that the area mined is left in a stable condition that will provide for public safety and not pollute the environment," Borell says. He adds that the law "requires bonding in the fairest possible way."

MINING AROUND THE STATE

Wishbone Hill. While Alaska's regulatory climate may be relatively favorable, a sluggish world economy has worked to slow down the state's mineral development. Idemitsu Alaska's Wishbone Hill coal deposit is a good example. The site near Sutton has proven recoverable reserves of high-rank coal totaling 15 million tons. According to project manager Dave Germer, the mine is fully permitted and could go into production fairly quickly if the world price of steaming coal were to show an improvement.

Red Dog. Poor market price is also affecting the production of zinc, the state's leading metal commodity in 1991 and 1992. Zinc accounted for 54 percent of the...