Foreign mining investment: 'crucial' to industry in Alaska.

• Author: Jaeger, Stephanie
• Position: Special section: WORLD TRADE CENTER ALASKA 25th Anniversary

The majority of investment in Alaska's mines comes from foreign companies. Most often geologists exploring or developing mines look for investors in Canada and Great Britain, but a few companies are based in the U.S., Australia, South America and Asia. Three large mines currently operating in Alaska are U.S. owned--Usibelli Coal Mine, Greens Creek polymetallic mine and Kensington Gold Mine. But an immigrant from Italy founded Usibelli, Greens Creek was started by British and U.S. companies, and Kensington had foreign investors and explorers until it was bought by a U.S. company in 1995.

"Mines in Alaska are usually traded on the Canadian stock exchanges because the U.S. Security Exchange Commission's rules make it very hard to raise money for high risk investments," said Steve Borell, former executive director of the Alaska Miners Association. "In the U.S. the mindset has been against resource development because of the environmentalist movement. In Canada, they have the business, financial and technical expertise needed to invest in and develop mining companies."

FOREIGN INVESTMENTS

Canada-based companies provide about 70 percent of the money spent on the exploration and development of Alaska's mining industry. In 2010, Canada-based companies funded $207 million of exploration and $130 million in mining development in Alaska and employed about 1,000 Alaskans with an average yearly salary of $97,000-twice the average Alaska wage.

Among the 42 Canada companies operating in Alaska, the Fort Knox Mine near Fairbanks is the largest surface gold mine. The second largest private-sector employer in the Fairbanks North Star Borough, it employs 500 people and pays $45 million in wages and benefits annually. The Red Dog Mine, located 90 miles north of Kotzebue, employs 550 workers and pays $52 million in wages each year. NANA Regional Corp. shareholders hold 56 percent of Red Dog jobs. In terms of payroll, Red Dog is the largest employer in the Northwest Arctic Borough. Alaska's newest gold mine, Nixon Fork Gold Mine near McGrath, employs 70 people.

The Pebble Project, a partnership between London-based Anglo American and Vancouver, British Columbia-based Northern Dynasty, has invested more than $400 million so far in engineering, exploration and environmental studies. If Pebble is developed, it could provide 800 to 1,000 jobs in Southwest Alaska.

In addition to the wages paid to local workers, Canada-based mining companies have become large...