Despite a dismal world economy, Alaska's five large producing mines say they will remain operating and have mostly avoided layoffs. One gold mine has even added staff, the Alaska Miners Association told state legislators in a briefing in Juneau Feb. 25.
Two large mines that have been hit hard by sharp declines in zinc prices are the Red Dog mine north of Kotzebue and the Greens Creek mine near Juneau. While expenses are being watched carefully at both mines, no layoffs are planned, although the Greens Creek mine did have to reduce staff by five people. The company plans no further reductions, however, said Steve Borell, the association's executive director.
Red Dog, an open pit mine, is the world's largest producing zinc mine. It pays its 485 employees $50 million a year in wages and benefits and does another $110 million a year in business with support and supply companies.
Greens Creek is an underground mine on Admiralty Island, 18 miles west of Juneau. It is also an important zinc producer, although gold and silver is also produced. Those have seen more stable prices, which has helped offset the losses from zinc. Greens Creek has 325 employees and pays $25 million in wages and benefits and another $20 million for supplies and services, Borell said in the presentation.
In contrast to zinc, gold prices are holding strong and consequently gold mines in the state are doing well financially, particularly those that can also benefit from lower fuel costs.
Pogo, an underground gold mine near Delta, east of Fairbanks, has added staff this year and now has 297 employees compared to about 250 a year ago, according to Borell. Production at Pogo has increased and is expected to climb further in 2009 to 358,000 ounces of gold.
Pogo began production in 2006 and experienced startup problems, including a fire, that affected the planned increase in gold production, but these problems are now mostly resolved. Turnover among employees, also a problem, has eased.
The Fort Knox gold mine near Fairbanks should also have a better year in 2009, with an easing of electricity and fuel costs and if gold prices stay high. Fort Knox produced 33,000 ounces of gold last year. The mine employs 450 and has a pays $38 million in wages and benefits to employees.
Kinross Gold, the operator, is also proud of its safety record, having working 1.8 million man-hours with no time lost from accidents since 2005, Borell said.
Alaska's only producing coal mine, the Usibelli mine near Healy, employs 110 and produces about 1 million tons of coal per year for power plants in Interior Alaska and about 500,000 tons per year for exports to Pacific rim buyers, mainly power plants in Latin America and Asia.
Significant expansions are planned at some of the large producing mines. In 2010 Teck hopes that Red Dog can begin mining a new pit, named Aqqaluk, that is adjacent to its existing mine, which is near depletion. A federal record of decision is expected soon on an environmental impact statement prepared for the expansion is expected soon.
Red Dog has been producing for 20 years and with the new pit it will be able to produce at least 20 years more.
At the Fort Knox mine, a heap leach pad has been under construction to process low-grade ore, and mining has started on a new phase of expansion of the main mining pit, the seventh since production began. Exploration around the edges of the main pit is also underway aimed at a possible eighth expansion of the pit.
With gold production from the heap leach, which uses a cyanide process to recover the gold (the cyanide is recycled) and the phase seven expansion, the life of the mine has been extended to at least 2014 and Kinross is optimistic that mining will continue beyond that.
At the Pogo mine near Delta, a new ore body has been discovered underneath the ore zone now producing, and test drilling is being done to determine the quality of the rock. It is possible that there could be additional ore zones that can be reached from the mine.
There's a lot more coal that can be mined by Usibelli, too. The company has 470 million tons of resources under lands where it currently holds mining periods. At the current rate of mining that's sufficient for 50 years of production.
Most of the attention paid to Alaska's mines focuses on the large producing mines but about 175 small mines that mostly produce gold from placer deposits, are operating. Many of these are family-owned and operated. The number of small placer mines is expected to remain steady between 2008 and 2009, Borell said.
Source: Alaska Journal Of Commerce
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