Enormous impact of Alaska's producing mines: the big six pour money into local and state economies.

Author:Stricker, Julie

For Alaska miners, 2013 was a difficult year. Gold prices dropped and exploration dollars followed suit. One of the state's seven operating mines, Nixon Fork, shut down, and major mining companies left the state. Energy prices were stuck firmly in the stratosphere, fueling increases in operating costs. Federal oversight also increased.

Exploration spending dropped 38 percent statewide in 2013, totaling about $180 million.

Despite the difficulties, Alaska's six producing mines met major milestones in 2013 and entered 2014 on strong footing. Mining remains a major economic force in Alaska, employing 4,600 people directly and double that number in jobs indirectly tied to the industry, according to recent numbers released by the McDowell Group in a survey conducted for the Alaska Miners Association and Council of Alaska Producers. Mining jobs are some of the best-paid in the state, averaging $100,000 annually, for a total direct payroll of $630 million in 2013.

Karen Matthias, a board member of the Alaska Resource Development Council and consultant for the Council of Alaska Producers, noted the challenges in a talk at the November 2013 Alaska Resources Conference.

"More than $2 billion has been spent on dozens of exploration projects over the last thirty years, but we only have six large mines," she told the conference. "That gives you a perspective of how much goes into mining."

Alaska's six producing mines are Kensington and Greens Creek in Southeast Alaska; Pogo, Fort Knox, and Usibelli in Interior Alaska; and Red Dog in Northwest Alaska.

Statewide, these six mines spend half a billion dollars with Alaska businesses for goods and services. Locally, their economic impact is enormous.

Fort Knox Gold

Fort Knox gold mine, located twenty-five miles northeast of Fairbanks, employs 630 people, all of whom live in the Fairbanks North Star Borough, says Anna Atchison, community and government affairs manager. The annual wage is $92,000. Another 400 contractors also worked at the mine in 2013. "I'm sure we'll continue to bring on new folks as we get closer to summer," Atchison says. "We always do."

Having workers live within daily driving distance of the mine is a luxury only one other Alaska mine has, Usibelli Coal Mine in Healy. Fort Knox responds by being actively involved in the community.

"Of course, we've been operating here for a long time and been part of the community for a long time," Atchison says. "We're the fifth largest private employer, the largest taxpayer, and a significant driver when it comes to community investment."

Fort Knox, owned by Kinross subsidiary Fairbanks Gold Mining, Inc., is the state's largest open pit mine. Construction began in 1995, with the first gold pour in December 1996. The mine poured its 6 millionth ounce of gold in December 2013.

Most of the ore is considered to be low grade, so the mine compensates by operating on an enormous scale.

The mine added to its fleet of huge trucks in 2013 and now operates nineteen 240-ton haul trucks, nine 190-ton trucks, and ten 150-ton trucks. The additions meant another 100 workers to drive the trucks, as well as support and maintain them.

The higher...

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