Legislature(1999 - 2000)

02/23/2000 05:11 PM House EDT

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT AND TOURISM                                                                   
                      FEBRUARY 23, 2000                                                                                         
                          5:11 p.m.                                                                                             
                                                                                                                                
                                COMMITTEE CALENDAR                                                                              
                                                                                                                                
  REVIEW OF THE MINING INDUSTRY IN ALASKA                                                                                       
                                                                                                                                
  TAPE                                                                                                                          
                                                                                                                                
  00-3 SIDE A                                                                                                                   
                                                                                                                                
  CALL TO ORDER                                                                                                                 
                                                                                                                                
  REPRESENTATIVE GAIL PHILLIPS, Chair, called the meeting to                                                                    
  order at 5:11 p.m.                                                                                                            
                                                                                                                                
  PRESENT                                                                                                                       
                                                                                                                                
  Committee members present to order were Representatives                                                                       
  Phillips, Cissna, Halcro, Rokeburg and Dyson. Other                                                                           
  Representatives in attendance were Representative Harris and                                                                  
  Representative Morgan.                                                                                                        
                                                                                                                                
  SUMMARY OF INFORMATION                                                                                                        
                                                                                                                                
  CHAIR PHILLIPS began the meeting by stating the intent of the                                                                 
  hearing as to provide an overview of minerals industry of                                                                     
  Alaska from multiple perspectives.  It will begin with a                                                                      
  general overview and focus inward to some specific project                                                                    
  updates, specifically Pogo and Donlin Creek, with the purpose                                                                 
  to provide the committee members with a better understanding                                                                  
  of the challenges and opportunities for mining in the state.                                                                  
                                                                                                                                
  FRANKIE PILLIFANT Mining and Minerals Development Specialist,                                                                 
  Division of Trade and Development (DTD), Department of                                                                        
  Commerce & Economic Development (DCED), staff member, Alaska                                                                  
  Minerals Commission, Member, City and Borough of Juneau                                                                       
  Assembly, began her presentation by speaking on the general                                                                   
  optimism across the state concerning the states mining                                                                        
  industry and outlook.  She stated that the overall value of                                                                   
  the industry is over $1 billion dollars.  Despite the current                                                                 
  low gold prices the outlook is good.  She continued to                                                                        
  describe the where, what and who of the current mining                                                                        
  activity across the state:  Red Dog is the largest low cost                                                                   
  producer of zinc in the world;  Green's Creek is one of the                                                                   
  world's largest deposits of silver;  Fort Knox is the state's                                                                 
  largest gold producer.                                                                                                        
                                                                                                                                
  FRANKIE PILLIFANT had a map that showed the mineral                                                                           
  opportunities across the state and pointed to active coal,                                                                    
  gold, and silver properties.  A small map of the completed                                                                    
  DGGS [Division of Geological and Geophysical Services]                                                                        
  geophysical surveys was presented and it was stated that to                                                                   
  complete the entire area of the state at the present survey                                                                   
  rate it would take a total of 70 years.                                                                                       
                                                                                                                                
  FRANKIE PILLIFANT provided a brief review of the reports put                                                                  
  out by DGGS and DTD (DCED) and the Alaska Minerals Commission                                                                 
  report. Finding A of the latter report calls for the                                                                          
  establishment of a core permitting group.  She also responded                                                                 
  to questions from the committee.                                                                                              
                                                                                                                                
  DR. LANCE MILLER, President, Red Diamond Mining, President,                                                                   
  The Foundation for Glacier and Environmental Research, gave                                                                   
  some specific information on the gold industry and mentioned                                                                  
  a bit on gold prices and put Alaska in a global perspective.                                                                  
                                                                                                                                
  DR. LANCE MILLER presented a gold production graph and a copy                                                                 
  of the Frasier report, which rates various areas, and Alaska                                                                  
  rates quite well in spite of its remoteness. Copies of this                                                                   
  report were included in the packet of information.  He stated                                                                 
  that world class gold deposits are generally on the order of                                                                  
  20-30 million ounces.  He also mentioned that also there was                                                                  
  a lot of interest in Alaska at the recent Cordilleran Roundup                                                                 
  Conference in Vancouver.                                                                                                      
                                                                                                                                
  DR. LANCE MILLER presented a slide show to give people a                                                                      
  prospective of world class gold deposits in relation to                                                                       
  Alaska.  A tour commenced of various other important gold                                                                     
  districts including Nevada and South Africa with major social                                                                 
  issues.  Uzbekistan has the largest deposit of gold in the                                                                    
  world with 150 million ounces.  China has a great supply and                                                                  
  demand for gold.  Mongolia provides 70 percent of the rare                                                                    
  earth elements.  The Russian Far East provides about 350                                                                      
  million ounces comparing to 30 million ounces in Alaska.  He                                                                  
  stated that Alaska has a long way to go to catch the rest of                                                                  
  the world, and Alaska deposits are minor in comparison.  These                                                                
  are the issues that mining companies need to recognize before                                                                 
  investing in Alaska.  In Teck's view, the largest issue of                                                                    
  Alaska is access, but the state has a lot of mineral wealth.                                                                  
                                                                                                                                
  KARL HANNEMAN, Alaska Regional Manager, Teck Resources,                                                                       
  operator of the Pogo Deposit near Delta Junction, Board                                                                       
  Member, The Alaska Minerals Commission, presented an update on                                                                
  the Pogo Deposit.  Pogo is a joint venture between Teck                                                                       
  Resources and Sumitomo and is undergoing continued exploration                                                                
  with the development of a decline toward the ore-body, which                                                                  
  will reach the ore this month.  Big issues for Pogo are the                                                                   
  access.  Road options would include full bridges over all                                                                     
  water bodies.  He also responded to questions from the                                                                        
  committee members.                                                                                                            
                                                                                                                                
  JUNE McATEE, Vice President of Natural Resources, Calista                                                                     
  Corporation, stated that Placer Dome has spent over $30                                                                       
  million dollars on the Donlin Creek project and drilled over                                                                  
  400 drill holes.  Placer Dome is currently working toward an                                                                  
  economic study on the project, but challenges to development                                                                  
  will be difficult to overcome.  At Donlin Creek, the local                                                                    
  population has been more than 50 percent of the total employed                                                                
  on site.  The problems encountered with Donlin Creek include                                                                  
  access.  Barging equipment to the site would be a major                                                                       
  activity during construction.  About 400 barges on the                                                                        
  Kuskokwim would be required in the first year of development.                                                                 
  She stated that the transportation issue is not one that needs                                                                
  to be vigorously pursued.  Road construction should be                                                                        
  carefully considered and begun as village to village roads,                                                                   
  not a large road from Anchorage which would bring tourists.                                                                   
                                                                                                                                
  COMMITTEE ACTION                                                                                                              
                                                                                                                                
  The committee took no action                                                                                                  
                                                                                                                                
  CHAIR PHILLIPS adjourned the meeting at 6:25 p.m.                                                                             
                                                                                                                                
  NOTE:  The meeting was recorded and handwritten log notes were                                                                
  taken.  A copy of the tape and log notes may be obtained by                                                                   
  contacting the House Records Office at 129 6th Street, Suite                                                                  
  229, Juneau, Alaska  99801-2197, (907) 465-2214, and after                                                                    
  adjournment of the second session of the Twenty-first Alaska                                                                  
  State Legislature this information may be obtained by                                                                         
  contacting the Legislative Reference Library at 129 6th                                                                       
  Street, Suite 102, (907) 465-3808.                                                                                            
                                                                                                                                
                                                                                                                                

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