Mining out the storm.

• Author: Freeman, Curtis J.
• Position: Alaska's gold mining industry - Industry Overview

Despite Gold Slump, Industry Sets $11 Billion Record

The sounds of whirling helicopters and whining drills have once again returned to the hills and valleys of Alaska as the rough-and-tumble mineral exploration season hits its fall stride.

According to a report produced by the Alaska Minerals Commission, major developments in the state include the continuation of commercial production at Fort Knox gold mine near Fairbanks and Illinois Creek gold mine near Galena.

Additionally, the Red Dog zinc mine near Kotzebue perseveres with its $183 million expansion project; the Greens Creek mine near Juneau resumed full production; the Nixon Fork mine near McGrath expanded to allow continued production; and the Usibelli Coal Mine near Healy upgraded its major earthmoving equipment.

"The recent growth in the minerals industry is one of the shining stars in Alaska's healthy economy, setting new records in each of the past two years," said Gov. Tony Knowles. "This new investment, exploration and production has added several hundred well-paying, private-sector jobs, many in rural areas."

Last year nearly $51 million was spent in exploration, $152 million in development, and $855 million in production. That $1.1 billion surpassed the previous record of $1.03 billion set in 1996.

"With five world-class hard rock mines operating today - from Fort Knox in Fairbanks, to Kotzebue's Red Dog, to Greens Creek in Southeast-and others coming on line, the value of Alaska's mining industry has tripled in just the past 10 years," Knowles added.

RED DOG

Leading the pack in Western Alaska is Cominco Alaska, Inc., which operates the Red Dog mine, the largest zinc mine in the world. Red Dog is located approximately 90 miles north of Kotzebue in the DeLong Mountains, 55 miles inland from the Chuckchi Sea. It produces nearly 500,000 tons of zinc-ore each year.

Cominco recently announced an operating profit of $102 million for 1997, more than quadrupling 1996 profits of $25 million. Also noteworthy: Red Dog's expansion project is reported to be on schedule for a second-half 1998 completion. The $200 million infrastructure expansion includes construction at its port, as well as new housing and processing plant facilities. Port construction was recently completed.

Cominco, established in 1989, employs about 800 and is a subsidiary of Cominco Ltd, a Canadian-based mining and smelting company. Zinc and lead are exported worldwide out of Red Dog, which produced about 7 percent of...