the looming dilemma. “Some (village corporation leaders) don’t even know where the money comes from.” She said Native corporation lead- ers attempted to get a 3 percent roy- alty from possible oil production from the Arctic National Wildlife Refuge but that was unsuccessful. Leaders of the Donlin gold proj- ect in the upper Kuskokwim region of Western Alaska tout their world- scale prospect — with the poten- tial to produce upwards of 33 million ounces over a nearly 30-year planned mine life — as a possible solution to the 7(i) and 7(j) revenue outlook. The Donlin prospect is on land owned by The Kuskokwim Corp., a consolidated village corporation and, as is the case across the state, the subsurface rights and royalties are controlled by the re- gional corporation — in Donlin’s case, Calista Corp. A Donlin spokeswoman referred questions about royalties to Calista officials. Calista spokesman Thom Leonard noted via email that Donlin isn’t the only resource development opportu- nity on Alaska Native-owned lands, but it is the next major opportunity
after Red Dog to contribute to the 7(i) program. “Like we can’t predict how many fish we will catch, we can’t speculate on the amount of 7(i)/7(j) revenue (from Donlin). It will depend on the price of gold and other factors. That said, if the Red Dog mine is any guide, we expect to be a significant contrib - utor to 7(i)/7(j) distributions to all Alaska Native corporations,” Leonard wrote, also noting that Red Dog ac- counted for 70 percent of all 7(i) reve- nue between 2015 and 2018. Bissett concurred that Donlin could be a major source of shared revenue, but also added that it is several years from the start of a lengthy construc- tion process, if the mine is ultimately built at all. She suggested it could be 20 years before significant 7(i) reve - nue is collected from Donlin. “As my chairman said, (shared revenue) is the difference between be - ing in business and not in business” for many village corporations, Bissett said. This story first appeared in the Alaska Journal of Commerce and is reprinted with permission
ANCSA, CONTINUED from PAGE 10
the emphasis on spreading the ben- efits of natural resources across the state is one of the first socially respon - sible business models. “People often forget the Alaska Na- tive piece of ANCs and just focus on the corporation,” Bissett said. “It’s very similar to the way we would share subsistence food,” she added. The problem lies in the fact that resource revenue from Alaska Native corporation-owned lands is generally declining, and the fall is likely to ac- celerate in the coming years. As is the case with oil production across the North Slope, production from lands owned by Arctic Slope Re- gional Corp. or state leases to which ASRC holds an overriding royalty in- terest has been on a downward trend, with no outlook for an abrupt recovery. Shared revenue from the Red Dog mine in northwest Alaska — one of the world’s largest zinc producers — also has an expiration date, and it’s the one Bissett is most concerned with. “There’s a huge cliff coming for 7(j),” she said in an interview. Opened in 1989, the Red Dog mine is on NANA lands north of Kotzebue. However, the metal deposit Red Dog operator Teck Resources Ltd. has been mining from is projected to be ex- hausted by 2032, according to Teck, with a likely ramp-down of produc- tion in the years preceding closure. Teck leaders in 2018 announced a second major discovery in 2018 that company representatives character- ized as another world-scale zinc pros- pect, but it is on nearby state land. A spokeswoman for NANA did not respond to questions about royalty and 7(i) revenue from Red Dog in time for this story. According to the Alaska Industrial Development and Export Authority, which owns the industrial toll road used to access the mine, royalty pay- ments to NANA average greater than $130 million annually. Through 2016, Red Dog had generated more than $1.3 billion in royalties for NANA, of which $860 million was subsequently dis- tributed to Alaska Native corporations through the 7(i) and 7(j) programs, according to figures in a 2017 AIDEA asset review report. “Awareness is the first big piece,” Bissett said in regard to addressing
DOCTORS USE ALASKA SILVER TO SAVE LIVES One of the downsides to the abundance of antibiotics in our modern world is the ability of some bacteria to grow resistant to those many antibiotics. Thankfully, Alaska has plenty of silver, including Hecla Greens Creek, America’s largest silver mine. Silver is an effective biocide that scientists use to penetrate the cell walls of life-threatening bacteria to save lives every single day. Mining – it’s an essential part of everyday life.
heclagreenscreek.com
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Fall 2021
The Alaska Miner
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