Alaska's Promise Lures Major Mining Companies.

• Author: SCHMITZ, RICHARD F.

With few exceptions, every major mining company in the world now holds some stake in Alaska's mineral wealth. Yet only four major mines (mines with 100 or more employees) operate in Alaska as the new millennium begins--and that figure is unlikely to quickly improve unless changes are made in the way Alaska goes about its mining business.

"Alaska is an interesting case," says Laura Jones, director of studies in risk and regulation for the Vancouver, B.C.-based Fraser Institute. "If you look at mineral potential, Alaska does very well indeed when compared with other jurisdictions. Just looking at the rocks, Alaska beats mining hotbeds such as Australia or Peru. But when it comes to policy factors, Alaska doesn't score as well. In fact one in four (mining company officials) who we surveyed say these factors are a strong deterrent to investing in Alaska mining."

These figures come from the institute's "Survey of Mining Companies 2000-2001," which was released late in 2000. It can be found on the World Wide Web at www.fraserinstitute.ca.

Still, with dot-com stocks losing their luster and evidence of a market slowdown increasing, gold and other minerals may become a little more interesting to investors, said Steve Borell of the Alaska Miners Association. For example, in November the Toronto Stock Exchange saw a spike in stock prices for small mining companies.

According to Michael Gray, chief financial officer for Vancouver, B.C.-based Rubicon Minerals, there is not a major mining company in the world that doesn't have some investment in Alaska. "Alaska is really recognized as a world-class gold exploration target.

"The price of gold is still the most important factor," Gray continued. "That is what is going to decide whether exploring for gold is practical."

But the Fraser Institute survey reveals these investors' deep concern about Alaska's lack of infrastructure and duplication of state and federal regulations. Gray, for example, said mining companies are keeping a very close watch on the developing Pogo Project, a world-class gold discovery located just north of Delta Junction. "Mining companies are waiting for a signal. If there are problems putting a road into Pogo, the (investment) money could go away," he said.

Borell said a bear market might be good for Alaska mining. "As the economy sees a slowdown, more investors may buy gold bullion or buy stocks in mining companies with large reserves."

Gray said he believes some mining company...