Mining remains bright spot in Alaska’s economy
BY TIM BRADNER One bright spot in Alaska’s economy is in minerals. The Alaska Miners’ Association’s latest economic report for the industry bears this out. Each year the AMA com- missions the McKinley Research Group (formerly McDowell Group) to do the report. Last year was tough year for Alas- kans. Many employers cut their work- force due to COVID-19 impacts but hiring rose in the mining industry and payrolls were substantially up. One accomplishment is that Alas- ka’s producing mines and projects im- plemented strict COVID-19 protocols to protect their workers and contractors and keep local communities safe. There were no significant production disrup - tions or layoffs due to the pandemic. Millions of dollars in payroll contin- ued to be injected into the state. Additionally, through the operation of quarantine facilities, which involved housing and catering, mining compa- nies brought millions of dollars into the local economies of Anchorage, Fair - banks, and Juneau. In terms of jobs, in 2020 there were 4,700 employed directly in min- ing and when indirect jobs were added the total attributed to minerals reached 9,600. The same numbers for 2019, a pre-pandemic year, were 4,600 em- ployed directly and 9,000 when indirect jobs are included. The direct and indirect payroll in- creased sharply, however, from $740 million in 2019 to $890 million in 2020, and average annual wages for jobs in mining rose from $112,800 in 2019 to $115,300 in 2020, the report indicated. An estimated $430 million was spent on mine development and other capi- tal construction during the year. Placer miners were also active, although only 2019 data was available when McKin- ley Research compiled the report for the AMA. Gross value (mostly gold) produced from placer mines in 2019 was reported at $66.8 million, with 169 placer mines producing 47,474 ounces of gold that year.
Photo Courtesy Red Dog Mine Red Dog Mine was among the mining industry bright spots during the past year.
Taxes paid to local governments in- creased from $37 million in 2019 to $49 million in 2020: n In the Northwest Arctic Borough, Teck Alaska, operator of the Red Dog lead-zinc mine paid $26.2 million in Payment-in-Lieu-of-Tax, or PILT, a negotiated payment n In the Fairbanks North Star Bor - ough, $11.1 million in property taxes were paid by Kinross Gold, owners of the Fort Knox gold mine n In Juneau, the Greens Creek sil- ver, zinc, and gold mine paid $1.9 mil- lion in property taxes to the City and Borough of Juneau n Also in Juneau, the Kensington gold mine paid $1.4 million to the City and Borough of Juneau Revenue paid to the state (taxes, fees) were $112 million in 2019 and $117 mil- lion in 2020. Capital spending by min- ing companies also climbed, from $225 million in 2019 to $430 million in 2020. State revenues included: n Mining license taxes, royalties, and fees of $62.1 million n The Alaska Mental Health Trust Authority, which owns and leases lands, was paid $1.1 million for mining claim rent and royalties, and construc- tion material sales n Payments for materials, such as sand and gravel, fees for state agency coordination and other taxes were $9.7 million
n Payments of $15.2 million were paid to the state-owned Alaska Railroad for the moving of sand, gravel, and coal n The Alaska Industrial Develop- ment and Export Authority, the state development corporation, was paid $28.4 million for the use of AIDEA- owned road and port facilities built to support the Red Dog Mine Not everything was up. Royalties paid to Alaska Native corporations (mostly from the Red Dog Mine in northwest Alaska) dropped from $242 million in 2019 to $175 million in 2020. Explora- tion spending dropped, too, from $162 million in 2019 to $127 million in 2020. Mining companies also work in partnerships with Alaska Native corpo- rations mostly where lands are Native owned. At the Red Dog Mine north of Kotzebue, 54% of the year-round jobs were filled by shareholders of NANA Regional Corp. At the Upper Kobuk Minerals Projects, which involve sea- sonal exploration, 33% of jobs were filled by NANA shareholders. Royalty payments for mineral pro- duction or activity are an important source of revenue for Native corpora- tions. In 2020, NANA Regional Corp. received $173.5 million in royalties from Red Dog Mine production. Of this, NANA shared $104.1 million to other Alaska Native corporations and at-large shareholders under the revenue-shar- ing provisions of the 1971 Alaska Native Claims Settlement Act.
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The Alaska Miner
Summer 2021
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