Alaska's mining industry tackles power infrastructure: mines need sources of electric power to enhance viability.

• Author: Liles, Patricia
• Position: MINING

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Alaska's mining industry has been geologically blessed with large-scale mineral resources, many ranked in size among the world's largest deposits.

But one developmental hurdle to overcome for such large-scale mineral deposits is the amount of electric power required to extract them. And the challenge becomes even greater when a mineral deposit is located far off the state's existing Railbelt power grid.

Such is the case for two advanced exploration projects in Alaska--the Donlin Creek gold project and the Pebble copper-gold-molybdenum project, both located in remote regions of Southwest Alaska.

"Power is traditionally one of the challenges for any project in rural Alaska," said John Shively, president and chief executive officer of the Pebble Limited Partnership, during a March presentation in Fairbanks. "Many of the remote projects in Alaska use diesel (generation) ... but we do not think we can use diesel for environmental reasons and because of the economics of diesel."

Current estimates place Pebble's electric needs at 300 to 600 megawatts of power, depending on the project's preliminary design, Shively said. At Donlin Creek, which is slated to begin the permitting process this year, developers estimate that mine project will require 127 megawatts of power.

Combined, the top-end electric power requirement posed by Pebble and Donlin is equal to about half of the Railbelt's current generation capacity, which is fed into the grid by six Railbelt electric utilities.

The electric needs of those two potential large-scale mines will likely not be met by the state's existing Railbelt electric infrastructure. And that electric system is already stressed due to aging generation and transmission infrastructure, demand growth in the Interior and the Anchorage Bowl and volatile costs due to fluctuating diesel and natural gas prices.

MINES CONNECTED TO THE RAILBELT GRID

In past years, mine developers in Alaska looked to the Railbelt grid for power options. Gold mine projects, including Fort Knox and Pogo both located within 50 miles of existing infrastructure, were added onto the existing load served by the Fairbanks-based Golden Valley Electric Association through construction of transmission lines.

Obtaining a reliable source of power to maintain consistent production was the main draw for those mine operations.

"From the mine's point of view, we figure that Golden Valley can do it more efficiently than we can," said Larry...