In a resource-rich state, it's often not a matter of whether enough of a resource exists to warrant mining it, but whether the mineral can be mined in a cost-effective way. Deposits might be hundreds of miles from a road, rail line or power supply.
Provision of power to mines can be a healthy chunk of an operation's budget. Just ask the folks at Donlin Gold LLC, who--after penciling out costs of shipping diesel to their mine in Western Alaska--have opted instead to build a 300-mile pipeline to bring in natural gas to fuel their power plant.
Economical and Esteemed
It's a roughly $900 million project, about 13 percent of the projected $6.7 billion total project cost, says Kurt Parkan, Donlin's manager of external affairs.
Donlin just entered the permitting process, Parkan says. Scoping sessions were scheduled to begin in January, the start of a three- to four-year effort to obtain about 100 permits.
Building an natural gas pipeline from Cook Inlet to the mine, located about 10 miles north of the village of Crooked Creek on the Kuskokwim River, wasn't Donlin Gold's first choice.
Asked if Donlin based their power model on other mines in operation, Parkan says each mine is a standalone process. The company's engineers studied power supply options "from the ground up," he says. They considered coal, diesel, nuclear, peat and even running a power line to the Railbelt Intertie.
Parkan says company officials initially planned to use diesel generators to supply the roughly 150 megawatts needed to operate the mine and nearby mine community.
The diesel would have to be barged up the Kuskokwim River from Bethel, Parkan says.
"We looked at that a little closer and there was concern expressed from folks in the region," he says.
Residents were concerned about so much diesel being hauled on the river and through their communities. So Donlin Gold representatives considered running a natural gas line and found that option to be cheaper.
"It takes about 80 million gallons of diesel off the river per year if we do that," Parkan says.
He says the pipeline will tap into the existing Enstar pipeline at Beluga, across Cook Inlet from Anchorage, and will run roughly parallel to the Iditarod Trail in some sections, crossing over the Alaska Range and veering west to the project site. It will be buried along most of its route, he says, but will jut above ground in two locations where it crosses earthquake faults.
Parkan says the pipeline will be built using temporary...