Alaska miners see growth ahead: call for metals spurs exploration, development.

• Author: Borell, Steve
• Position: SPECIAL SECTION: MINING: INTRODUCTION

Alaska's mining industry continues the steady growth we have seen for more than a decade and the number of new permits for exploration and small family mines has grown significantly. One more major metal mine has begun operating and exploration appears to be at a recent high. Both mining and exploration are responding to strong metal prices and Alaska's stable tax and regulatory policies.

BIG MINES OPERATING

The state now has one large coal mine and six large metal mines operating. The Nixon Fork mine near McGrath became Alaska's sixth lane metal mine July 4 when it resumed operations after being idle for several years. That mine now has a newly defined resource base and an upgraded mill that will provide higher recovery of gold and copper. All of the major metal mines continue to operate at design capacity with a sharp eye on costs.

This follows a period of extreme uncertainty for the Red Dog zinc/lead mine north of Kotzebue and the Kensington gold mine north of Juneau. Red Dog received its final permits for the Aqqaluk deposit, and mining of that deposit began last summer and will provide ore for the next 20 years. At Kensington, it took a U.S. Supreme Court decision to allow the mine to begin production and it began operating in July 2010.

FAMILY MINING

The number of permits for small family placer gold mines and for small-scale/ recreational-level placer mining has increased significantly with the higher gold prices. More of these mines are operating now than for many years. These individuals and families are salt-of-the-earth Alaskans with an entrepreneurial spirit and are investing their time, energy and money to become their own bosses and improve their lives while creating new wealth for the nation.

PRODUCTION UPSWING

Coal production continues its steady growth. Usibelli Coal Mine Inc. produced a record 2 million tons last year and should produce more than that amount this year. Increased coal demand from around the Pacific Rim and the prospect of two new coal mines within the next few years will significantly increase coal production and create hundreds of new jobs.

Mineral exploration has also increased over last year. Although the Lower 48...