Mining.

• Author: Borell, Steve
• Position: 2006 Alaska Forecast

Prices for precious metals, base metals and coal all continue strong. Mines already in operation, projects nearing development and grassroots exploration are all benefiting from the current improved demand for minerals.

The Alaska metal and coal mines already in operation continue to produce and continue to define additional ore adjacent to their operations. Cost increases, especially for diesel fuel and for electrical power, are severely eroding the benefits of good prices. The large mines currently operating are Greens Creek near Juneau, Red Dog north of Kotzebue, Fort Knox near Fairbanks and Usibelli Coal Mine at Healy. Numerous small-family, placer gold mines continue to operate on a seasonal basis.

Mines producing sand, gravel and stone depend on the level of local construction activity. In addition to work in and around villages and cities, highway improvements are a major market for this sector and these projects are dependent on government funding. The sand, gravel and stone producers are, however, effectively excluded from business to the Lower 48 due to the requirement to use Jones Act vessels and the fact that such vessels are not available.

After many years of exploration, engineering and permitting, two new underground gold mines are now in construction. The Pogo Mine, located 40 miles northeast of Delta Junction...