Natural gas: A boost to Red Dog and Donlin Creek: lack of cheap power is a hindrance to Alaska mines, but there are solutions.

• Author: Schmitz, Richard F.

Alaska is rich in mineral and energy resources, but poor in energy infrastructure--a combination that stands as a barrier to economic growth in general and, more specifically, to development of the state's mining industry.

The idea behind a handful of new and creative energy development enterprises is to plug mine sites into cutting-edge energy projects.

"Certainly mining is very energy intensive," explained Dr. Paul Metz, professor of geological engineering and chair of the department of mining and geological engineering at the University of Alaska Fairbanks. "The processes of crushing and grinding rock, or concentrating minerals, are highly sensitive to the availability of energy. Major mining areas of the world--South Africa, Western Canada, Russia--are places with much, much lower energy costs than you'd find in Alaska."

In addition, Metz said, Alaska's ore bodies are not typically located near places associated with fossil fuels--coal, gas or coal bed methane--which might be used to create power.

Still, Alaska is crisscrossed with mineral and energy sources, so it's likely there are places where the two intersect. That's a bet Phil St. George, as well as owners of the Red Dog mine, have placed on the table. St. George has formed Holitna Energy Corp., with the goal of bringing shallow gas energy to the Donlin Creek Mine.

Likewise, Teck Cominco--owner of the Red Dog lead-zinc mine, located 90 miles north of Kotzebue--is making its own effort to find natural gas (methane) in nearby shale beds as a source of electric power.

Red Dog faces a challenge, Metz said, because the gas in question is embedded in layers of shale, rather than coal. "It's a little more difficult a target because gas doesn't flow as freely through shale," he said. Holitna Energy faces plenty of challenges as well, considering the existence of coal beds--or natural gas--within its leases has not been definitely proven, just predicted.

DONLIN CREEK AND THE HOLITNA BASIN

"Donlin Creek is the fourth-largest undeveloped gold mine in the world, with 25 million ounces in the ground," St. George said. "Lack of cheap power is one of the reasons why it's not been developed yet."

This winter, St. George and partner TKC, the village corporation of the Middle Kuskokwim River, are hoping to make a gas play in the Holitna Basin, 15 miles south of Sleetmute and, more critically, just 50 miles or so from the Donhn Creek mine site.

"Natural gas has not been discovered there," St. George...