A mine is a terrible thing to waste

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By WIN GRUENING

“It is our duty as Alaskans to be at the forefront of climate change mitigation strategies and new resource opportunities.” – Alaska Center Climate Action Plan

Alaska’s elected officials share a common goal of solving Alaska’s structural revenue-expense imbalance. No more short-term band aids – we need long-term solutions.

Despite fossil-fuel naysayers, the oil industry will continue as Alaska’s main revenue source (outside of the Permanent Fund) in the near future.  Seafood, tourism, and mining will also contribute as significant components of the economy.  

Win Gruening

But the mining industry, more than any other, has the most potential for growth (and to put our people to work year-round) by providing the world with key components for electric-vehicle batteries and aid in the advancement of other critical  green technologies.

In 2017, the World Bank released a report, titled “The Growing Role of Minerals and Metals in a Low-Carbon Future.” The report details how wind turbines, solar panels and batteries are all incredibly reliant on a myriad of minerals.

For more than a century, Alaska has produced a variety of minerals, especially metals produced from hard rock. Today, Alaska only produces gold, silver, lead, and zinc in large quantities.  Alaska was the top silver producer in the U.S. in 2017, and zinc and lead were the state’s top two foreign exports. 

According to the Department of Natural Resources (DNR), our state has over 7,400 documented prospects.  Alaska ranks 5th out of 83 worldwide jurisdictions in overall investment attractiveness by mining and exploration companies and ranks 3rd in mineral potential. (Fraser Institute Annual Survey of Mining Companies, 2018).

In 2018, DNR reported production of almost 16 million ounces of precious metals (gold and silver) and about 825,000 tons of base metals (lead and zinc).  This is only a fraction of the estimated reserves potentially available for exploration and development in Alaska.

A report from McDowell Group, an Alaska-based economic consulting firm, says mining employed 9,200 Alaskans directly and indirectly during 2018, and injected $715 million in payroll into the state’s economy. Mine workers were among the highest-paid with an average annual salary of $102,100. Mining employees live in more than 60 communities throughout Alaska.

Estimated revenues to the State of Alaska from mineral-industry-specific fees, rents, sales, royalties, and taxes amounted to more than $148.6 million in 2018.  An additional $34.2 million was paid to municipalities.

Thousands of everyday products require mined metals, including electric vehicles. The minerals extracted from our mines are used in many of the technology tools we use today, from laptops to complex space-age devices. 

The rise of green energy technologies required to reduce carbon emissions is expected to lead to significant growth in demand for a wide range of minerals and metals, such as aluminum, copper, lead, lithium, cobalt, manganese, nickel, silver, steel, zinc and rare earth minerals such as neodymium-used in magnets and electric vehicles.

The study points to the fact that most rare earth metals come from China or other areas of unrest, corruption, and human rights abuses such as the Democratic Republic of the Congo. 

Alaska’s environmental awareness, regulations, and labor practices are clearly superior to most countries where mining occurs.  Furthermore, there is real concern America could potentially be held hostage by China and others that have control of rare-earth metals and minerals that are critical to America’s economy and security.

Objections to the expansion of existing mines like Greens Creek or Kensington near Juneau as well so potential mining projects like the Herbert River and Constantine prospects, or the rare-earth Bokan Mountain project in Southeast Alaska, are short-sighted. These projects would stimulate our economy, reduce dependence on foreign mineral sources, and improve global environmental quality.

Mining can and should be one of the cornerstones of true diversification of our natural resources and state and local economies.  Gov. Dunleavy’s formation of the Alaska Development Team to help advance mining projects as well as stimulate other areas of the economy is a welcome start. 

If we open our minds to the possibilities, Alaska can be a leader in the effort to supply our nation’s critical mineral needs.  If we don’t, others will take advantage and it will be an opportunity lost. 

Win Gruening retired as the senior vice president in charge of business banking for Key Bank in 2012. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is active in community affairs as a 30-plus year member of Juneau Downtown Rotary Club and has been involved in various local and statewide organizations.

24 COMMENTS

  1. Oil is organic….it’s a green compound that improves the quality of life and promotes achievements in all aspects of survival.

    Heat, lights, mobility production, farming, energy from oil has saved lives. That fire truck gets to fires by oil based fuels, the hospitals use oil base fuels for the diagnostic equipment. It truly amazes myself how people have come to demonize oil. The life source for green trees Is not oxygen…it’s carbon dioxide which Is recycle as we use the oil as fuel. Can’t we allow nature to natural and recycle as per natural design? Instead of fool around with mother nature to pretend death needs human for earth to survive. It’s truly the other was around, we survive because nature rule and Is in control. Nature always Is changing we use what nature has to survive just like every other forms of life. Death is a part of life and nature. Oil Is green energy !

    Is crude oil an Organic or Inorganic compound
    https://www.bengislife.com/2017/10/is-crude-oil-organic-or-inorganic.html
    Answer: crude oil is an Organic compound What is Organic compound and Inorganic compound ? Organic compound An organic compound is virtually any chemical compound that contains carbon, although a consensus definition remains elusive and likely arbitrary. Organic compounds are rare terrestrially, but of central importance because all known life is based on organic compounds

  2. If Homo sapiens are a part of the natural order of things then everything we do is natural by definition. Or Eve ate the apple and we have some special knowledge that we can use to save the planet. Or we were introduced here by aliens. Which Is It?

  3. The Permanent Fund is also in large part a result of the oil industry, so if state revenue if paid out of it then the state is still deriving it’s income from the oil industry. If we advance more mining operations in the state they will also contribute more to the Permanent Fund. If the anti-oil crowd truly wants to stop state reliance on oil then mining should be considered as a way to do so.

    • The PF was conceived as a rainy day fund. It was created by men with foresight, who realized they could take the money and run, or take the money and put it in the bank to soften the blow when the oil ran out. They chose to resist temptation and bank it. As time passed, that big, fat bundle of change lured pols to try to find ways to get at it. Fortunately, it was protected by the state constitution. Ironically, it was also protected by the PFD, which was originally a plan to put some of the fund into the hands of Alaska residents but eventually turned into what many thought of as an entitlement.
      Had the PFD gone into the PF all along, we’d probably have enough in the Fund to pay for governmental services, you know, schools, libraries, health care, law and order, roads, the stuff that makes living in a place worthwhile, well into the future.
      Now, if we want a livable society up here, we’re going to have to pay for it. ‘Course, if you don’t mind living in the wild west once again, anarchy is probably OK with you.

      • That all sounds good, as long as you don’t let the facts get in the way. The Permanent Fund was created to keep the government from overspending, it was designed to keep some of the oil revenues out of the hand of big government who would and did spend it all.

        • Exactly. It was created to take excess money and put it into a rainy day fund because the creators knew the oil would eventually run out. But the mostly Repub. legislature, through the years, couldn’t resist the lure, and we ended up with fish plants, and hydro projects, and bridges to nowhere projects, and roads to nowhere, and big tax breaks for oil companies because the legislature and the governor couldn’t keep their hands off the money.
          So, I agree. You’re right. The predominantly Republican government that has run the state for the last umpteen years spent what they could of the available savings funds as fast as they could. Trouble is, it wasn’t on stuff the state needed. It was on unicorn projects that benefited their buddies but not the residents of the state.
          Has they put that money into the rainy day fund, we’d be rolling in clover, like the Norwegians.

          • Man, could you imagine what would have happened with Democrats in charge? That rant you just went on just made me realize that with the current crop of “Republicans” we stand no chance at preserving the corpus of the Permanent Fund, but had Democrats been in charge there would be absolutely no Permanent Fund. Thanks for clearing all that up for me.
            .
            Politics aside, the Permanent Fund was set up to keep the government from spending OUR resources, or more specifically the money made off of OUR resources. Remember this is an “owner state” for better or worse. The Permanent Fund does not belong to government, it belongs to the people. The problem is our current government is trying to take it from the people.

  4. If you make a map of the circumpolar regions of the world and pin a small flag on all the known mines world wide it will look like maybe God skipped Alaska when he placed the mineral deposits….but it was not God that skipped Alaska it was the anti mine folks that have kept mine development shuttered .

    Win it right in his assessment that Alaska has vast untapped mineral deposits that need development….The energy and transportation needs for large scale mining are certainly available and in many cases could offer greater life enhancing futures for Alaskans than the mines themselves.

  5. If you create a map of the circumpolar region of the world and put a mall flag pin in each mining operations world wide it would appear God may have skipped over Alaska when he was placing mineral deposits but it was not God but Anti-mining folks that have stopped mine development in Alaska. Win is right about Alaska having vast amounts of mineral deposits the world need and Alaska needs to develop…and in many cases the transportation and energy needs for these mines may end up being larger and longer term developments than the mines themselves…and all combined will make life in Alaska much better for all Alaskans…

  6. Thank you Win Gruening. When the best of the brightest Alaskans speak , and if we listen, we prosper. I am printing and framing this.

    • We’re already being framed. If you think mining, other than oil, will save us, look to Chile, or the Middle East, or Montana.
      For value obtained by foreign owned mining companies versus value received by the citizens of Alaska, and figuring in the widespread pollution at Red Dog, Fort Knox, and yes, even Greens Creek, we Alaskans are being taken for a long, dirty, pitiless ride down a deep, dark shaft.

      • Greg R,
        I have in times past worked as a contractor at a major Alaska Mine. I can tell you that it was a very rewarding and valuable experience for myself my partners and crew.

        • I imagine it was. My father worked the iron mines of northern MN and made a decent living at it. But when the mines closed down because iron was cheaper in South America, it left thousands unemployed and on their own in a depressed economy. That’s what happens with resource extraction; when it comes to an end, all that is left is environmental devastation and poverty.
          Don’t believe that? Look at West Virginia and Kentucky. Or Anaconda MT.

  7. Chicom is sponsoring the environmentalists in America. This fact can’t be repeated enough to make Americans aware that our economy, our mineral independence is under concerted attack.
    “Green Energy” is a scam … The proponents claim that they want the world to switch to renewable energy, yet they want to stop mineral extraction … the very materials needed to create Green Energy.
    It’s just a cover for promoting socialism, communism, any ism which will make them the new ruling class.
    If they really cared about the environment, they would support mineral extraction in advanced countries, where environmental safeguards are the strongest. But no – they prefer mining in s***hole warlord countries where there’s minimal or no safeguards.

  8. Yeah, oil is organic. So is methane, also known as natural gas. They’re made up of carbon, among other things, and that is the chemical definition of organic. And they are organic in the store-bought “Organic” sense because they are unchanged when you bring them out of the ground. But to able to make oil useful, it has to be refined into gasoline or diesel, or jet fuel, or any one of a number of products.. Those are the equivalent of refined sugar, or bread, or flour. They’re altered.
    If you think just because something is organic it is safe, consider the consequences of drinking a glass of carbon tetrachloride or hydrocyanic acid. They’re organic. But pleeeeze research them before you jump off that cliff.
    So, Jenny, I don’t know what your point is, but if it is that oil is organic, therefore it’s safe, or God’s gift to us to misuse as we please, or the solution to the problems that centuries of misuse of “organic” coal, and oil, and methane have created, then you will find yourself stewing in your own juices when global warming hits big time.
    But, at least, you’ll be organic.

    • Is global warming worse than global cooling? Warmer climates grow more food. Cooler climates grow less and require more energy for heat and transportation. What is the perfect temperature for earth? Let us know when you’ve got that figured out.

      • The only thing we can be certain of is that with global warming, things are going to be different. And when they are different, we will be compelled to change what we are now doing. And that’s not gonna be easy, especially if a new, highly volatile atmosphere keeps producing both droughts and flooding.

  9. When the next mining protester shows up in their electric car with mined lithium for the batteries and copper for all the connections driven on roads with mined gravel and asphalt chatting on their phone with mined rare earth minerals, I am afraid she/he will STILL not listen to the positive impact mining has had on even their own selfish life.
    Cleanest best mines? Here in the USA.

    • Yeah, but they’re still pretty dirty. That’s just the way the mining business works, and they haven’t been forced to change, they just change locations. If they can do it cheaper here because they aren’t forced to clean up the messes they leave behind, they will do so, and take Alaska and Alaskans for a ride that we will end up paying for..

  10. The trouble with mining is that we don’t make any money off of it. The $175 Million that Winn relates as coming into the State Treasury from mining would be lost in the rounding error of the budgets of DHSS or DEED.

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