Mining increases economic clout across state, industry says

By Tim Bradner

Alaska Journal of Commerce

Mines operating in Alaska are injecting hundreds of millions of dollars into the state's economy, particularly benefiting the state's larger communities where support companies are based.

Increasingly, employees of mining companies operating in remote areas are living in the state's larger communities, although Alaska's operating mines employ workers from about 120 communities statewide.

This, according to Ron Planz, public affairs manager for Hecla Mining at the Hecla/Greens Creek Mine near Juneau.

Planz led a group of mining industry officials from the Council of Alaska Producers, an industry group, appearing May 2 at an Anchorage Chamber of Commerce luncheon.

The large Red Dog lead and zinc mine north of Kotzebue illustrates the profound economic effects one mine can have across much of the state and in Southcentral Alaska in particular, according to Wayne Hall, public affairs manager for Teck Alaska, the mine operator.

For example, more than half of the workers at the Red Dog mine in Northwest Alaska live in Anchorage or the Matanuska-Susitna Borough, Hall said. About 230 of Red Dog's total full-time workforce of about 450 reside in Southcentral, Hall said.

Most of the remaining workers live in communities nearer the mine in Northwest Alaska. Red Dog also purchases equipment and supplies from 242 companies statewide, including 179 in Anchorage, Hall said.

The economic effects are wider yet, however. NANA Regional Corp., which is the landowner at the mine, paid out $82 million in shared mineral royalty revenues in 2010 to other Alaska Native corporations under a formula set out by the 1971 Alaska Native Claims Settlement Act, according to Lance Miller, NANA's vice president of resources.

Royalty payments to NANA itself, which have totaled nearly $500 million since production started in 1989, also have financed NANA's growth and diversification into a variety of Alaska businesses, from hotels to engineering services.

"There are 1,700 jobs in the Anchorage area 'created' by Red Dog," Miller said. "They are in the diversified businesses that NANA has built with the earnings from the mine. The figure reaches 5,000 jobs statewide."

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