Legislature(2017 - 2018)SENATE FINANCE 532

02/13/2018 12:00 PM RESOURCES

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Audio Topic
12:01:00 PM Start
12:03:00 PM Overview(s): Update on Alaska's Mining Industry
01:02:20 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Joint with Senate RES
+ Overview: Update on Alaska's Mining Industry & TELECONFERENCED
Projects
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
                         JOINT MEETING                                                                                        
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                       February 13, 2018                                                                                        
                           12:01 p.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
HOUSE RESOURCES STANDING COMMITTEE                                                                                              
                                                                                                                                
 Representative Andy Josephson, Co-Chair                                                                                        
 Representative Geran Tarr, Co-Chair                                                                                            
 Representative John Lincoln                                                                                                    
 Representative Justin Parish                                                                                                   
 Representative Chris Birch                                                                                                     
 Representative DeLena Johnson                                                                                                  
 Representative George Rauscher                                                                                                 
 Representative David Talerico                                                                                                  
                                                                                                                                
SENATE RESOURCES STANDING COMMITTEE                                                                                             
                                                                                                                                
 Senator Cathy Giessel, Chair                                                                                                   
 Senator John Coghill, Vice Chair                                                                                               
 Senator Natasha von Imhof                                                                                                      
 Senator Bert Stedman                                                                                                           
 Senator Kevin Meyer                                                                                                            
 Senator Bill Wielechowski                                                                                                      
 Senator Click Bishop                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
HOUSE RESOURCES STANDING COMMITTEE                                                                                              
                                                                                                                                
 Representative Harriet Drummond                                                                                                
 Representative Mike Chenault (alternate)                                                                                       
 Representative Chris Tuck (alternate)                                                                                          
                                                                                                                                
SENATE RESOURCES STANDING COMMITTEE                                                                                             
                                                                                                                                
 All members present                                                                                                            
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
 Senator Peter Micciche                                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW(S):  UPDATE ON ALASKA'S MINING INDUSTRY                                                                                
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DEANTHA CROCKETT, Executive Director                                                                                            
Alaska Miners Association                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:     Co-provided  a  PowerPoint  presentation                                                             
entitled, "Mining Industry Update," dated 2/13/18.                                                                              
                                                                                                                                
KAREN MATTHIAS, Executive Director                                                                                              
Council of Alaska Producers                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:     Co-provided  a  PowerPoint  presentation                                                             
entitled, "Mining Industry Update," dated 2/13/18.                                                                              
                                                                                                                                
ELIZABETH CRAVALHO, Vice President                                                                                              
External and Government Affairs                                                                                                 
NANA Regional Corporation, Inc.                                                                                                 
Kotzebue, Alaska                                                                                                                
POSITION  STATEMENT:     Co-provided  a  PowerPoint  presentation                                                             
entitled, "Mining Industry Update," dated 2/13/18.                                                                              
                                                                                                                                
MICHAEL SATRE, Manager                                                                                                          
Government and Community Relations                                                                                              
Hecla Greens Creek Mine                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:     Co-provided  a  PowerPoint  presentation                                                             
entitled, "Mining Industry Update," dated 2/13/18.                                                                              
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
12:01:00 PM                                                                                                                   
                                                                                                                                
CHAIR CATHY  GIESSEL called  the joint meeting  of the  House and                                                             
Senate  Resources  Standing Committees  to  order  at 12:01  p.m.                                                               
Present at  the call to  order from the House  Resources Standing                                                               
Committee were  Representatives Tarr, Johnson,  Parish, Talerico,                                                               
and  Lincoln.   Representatives  Birch,  Rauscher, and  Josephson                                                               
arrived as the  meeting was in progress.  Present  at the call to                                                               
order from the Senate Resources  Standing Committee were Senators                                                               
Giessel,  Bishop,   Coghill,  von  Imhof,  Stedman,   Meyer,  and                                                               
Wielechowski.  Also present was Senator Micciche.                                                                               
                                                                                                                                
^OVERVIEW(S):  UPDATE ON ALASKA'S MINING INDUSTRY                                                                               
        OVERVIEW(S):  UPDATE ON ALASKA'S MINING INDUSTRY                                                                    
                                                                                                                              
12:03:00 PM                                                                                                                   
                                                                                                                                
CHAIR GIESSEL announced that the  only order of business would be                                                               
the annual update on the state of mining in Alaska.                                                                             
                                                                                                                                
12:03:22 PM                                                                                                                   
                                                                                                                                
DEANTHA CROCKETT, Executive  Director, Alaska Miners Association,                                                               
introduced a  PowerPoint presentation entitled,  "Mining Industry                                                               
Update," dated 2/13/18.  She  said Karen Matthias would begin the                                                               
portion of the presentation on the benefits of mining.                                                                          
                                                                                                                                
12:05:19 PM                                                                                                                   
                                                                                                                                
KAREN MATTHIAS,  Executive Director, Council of  Alaska Producers                                                               
(CAP),  informed   the  committee   CAP  is  a   statewide  trade                                                               
association of  large producing metal  mines and  advanced mining                                                               
projects.   She reported in  2016 metal prices began  to improve,                                                               
which led to improved economics  for the mining industry in 2017.                                                               
In  2017, mining  companies directly  employed  4,400 people  and                                                               
supported  thousands  of  indirect jobs  through  companies  that                                                               
provide    services   to    mines,   including    transportation,                                                               
engineering,  and environmental  management.   Ms. Matthias  said                                                               
most  of the  mining  jobs  are year-around  and  pay an  average                                                               
salary  of $108,000  per  year.   She pointed  out  mining has  a                                                               
positive regional impact to residents  of over 55 communities and                                                               
over 600 businesses, many of which  are in rural areas (slide 2).                                                               
Slide  3  listed   the  benefits  of  mining   to  Alaska  Native                                                               
corporations; for example, the Donlin  Gold project employed over                                                               
90  percent local  hire  during its  exploration  phase, and  the                                                               
Upper  Kobuk  Minerals Project  employs  59  percent local  hire.                                                               
Further, Donlin Gold anticipates  building a natural gas pipeline                                                               
to  Western Alaska  that  would  provide access  to  a clean  and                                                               
affordable  energy source  to village  residents.   Ms.  Matthias                                                               
advised  mining also  provided $34  million in  revenue to  local                                                               
governments in  2017, including the  City and Borough  of Juneau,                                                               
the  Fairbanks  North  Star Borough,  and  the  Northwest  Arctic                                                               
Borough,  $61 million  to state  government, and  $49 million  in                                                               
other  state government-related  revenue (slide  4).   Turning to                                                               
the Alaska  Permanent Fund,  she advised  a percentage  of mining                                                               
royalties for  mines operating  on state  land is  deposited into                                                               
the fund,  and the  fund invests in  mining companies  (slide 5).                                                               
Slide 6  illustrated an  average of state  revenue from  mining -                                                               
over a five-year  period - versus the average costs  to the state                                                               
of   managing  and   overseeing  the   mining  industry   through                                                               
regulation and permitting.   Slide 7 illustrated  how mining pays                                                               
its  way through  spending to  develop the  infrastructure needed                                                               
for  exploration,  development,  and  construction,  which  often                                                               
includes access to  remote areas.  To reach  production, a modern                                                               
mine may  cost over hundreds of  millions to build; in  fact, Red                                                               
Dog and  Kensington Mines  built facilities  to supply  their own                                                               
power,  and  Greens  Creek  and  Kensington  mines  built  marine                                                               
facilities.   She pointed out mines  in the Lower 48  have better                                                               
access  to  roads,  railroads,  and  existing  electrical  grids;                                                               
however, in  Alaska, mines must  build infrastructure  and comply                                                               
with regulatory timelines.  One  of the reasons the state's costs                                                               
to manage and  permit the mining industry are low  is the state's                                                               
management   costs   are   billed  to   the   companies   through                                                               
reimbursable  service  agreements.     The  state  also  requires                                                               
financial assurance for reclamation and closure costs.                                                                          
                                                                                                                                
12:13:29 PM                                                                                                                   
                                                                                                                                
MS.  MATTHIAS continued  to slide  8 and  acknowledged the  state                                                               
encourages  infrastructure  and  investment  through  the  Alaska                                                               
Industrial Development  and Export Authority  (AIDEA), Department                                                               
of Commerce, Community & Economic  Development (DCCED), which was                                                               
formed to stimulate  economic growth and invest  in projects that                                                               
pay an  acceptable rate of  return.  [AIDEA's] investment  in the                                                               
Delong Mountain Transportation  System in support of  the Red Dog                                                               
Mine was  an original investment  of $265 million and  the return                                                               
to date  is $465 million,  at 6.5 percent annual  interest (slide                                                               
8).   Ms. Matthias advised mining  is needed for every  aspect of                                                               
daily living; although  recycling is important, it  does not meet                                                               
the  demand for  minerals in  the  modern world,  thus mining  is                                                               
necessary and must be done safely.   She said mines in Alaska are                                                               
world-class in  terms of safety and  environmental responsibility                                                               
(slide  9).   Silver and  gold are  found in  electronics and  in                                                               
automobile airbags (slide 10).   Furthermore, minerals and metals                                                               
are  essential  for  renewable technologies  such  as  batteries,                                                               
solar panels, wind turbines, and hybrid vehicles (slide 11).                                                                    
                                                                                                                                
12:16:45 PM                                                                                                                   
                                                                                                                                
ELIZABETH  CRAVALHO,  Vice  President,  External  and  Government                                                               
Affairs,  NANA  Regional  Corporation,  Inc.  (NANA),  began  the                                                               
portion of  the presentation on the  Red Dog Mine.   Ms. Cravalho                                                               
informed the committee  she is a NANA shareholder  and resides in                                                               
Kotzebue.    NANA  is  the  Alaska  Native  regional  corporation                                                               
located in Northwest Alaska and  its region includes 11 villages.                                                               
NANA has over  14,000 shareholders, the majority of  whom live in                                                               
Alaska, and employs approximately  15,000 people globally with 10                                                               
percent  shareholder employment.   Red  Dog Mine  is the  largest                                                               
lead and zinc  mine in the world and NANA  owns the orebody which                                                               
is located  on Alaska Native  Claims Settlement Act  (ANCSA) land                                                               
(slide 13).   The mine  was created  by NANA and  [Teck Resources                                                               
mining  company] in  1982  and  is the  largest  taxpayer in  the                                                               
Northwest Arctic  Borough.  The  mine is  connected to a  port on                                                               
the  coast  by the  Delong  Mountain  Transportation System  road                                                               
owned  by AIDEA.    She  described the  agreements  prior to  the                                                               
development  of  the  mine  and  characterized  the  mine  as  an                                                               
opportunity to  responsibly develop  resources in the  region and                                                               
provide  economic   development.     Further,  the  mine   has  a                                                               
significant economic  impact on the  region:  610  annual average                                                               
jobs; average  annual wage of  $112,000; cumulated wages  paid to                                                               
NANA shareholders were  $303 million between 1999  and 2013; $100                                                               
million paid  to state and  federal taxes; cumulative  wages paid                                                               
to  Northwest   Arctic  Borough  residents  were   $132  million;                                                               
shareholder hire of 55 percent (slide 14).                                                                                      
                                                                                                                                
12:19:55 PM                                                                                                                   
                                                                                                                                
MS. CRAVALHO turned  to benefits provided by the Red  Dog Mine to                                                               
the entire state and the nation.   Red Dog Mine accounts for over                                                               
70 percent of  the zinc produced in the U.S.,  which is necessary                                                               
for automobiles and  construction.  The mine  has provided $155.6                                                               
million to  the Northwest  Arctic Borough in  payment in  lieu of                                                               
taxes  (PILT), and  two recent  agreements between  the Northwest                                                               
Arctic Borough and  Red Dog Mine will continue  PILT payments; in                                                               
addition,  Teck will  contribute  $4-$8 million  annually to  the                                                               
village improvement  fund for community projects.   She explained                                                               
[ANCSA  Section 7(i)]  requires NANA  to share  a portion  of its                                                               
profits earned  from the  mine and since  mining began,  NANA has                                                               
shared   over  $820   million  with   all  other   Alaska  Native                                                               
corporations around the state (slide 15).                                                                                       
                                                                                                                                
12:21:46 PM                                                                                                                   
                                                                                                                                
MICHAEL  SATRE,  Manager,  Government  and  Community  Relations,                                                               
Hecla Greens  Creek Mine, began  the portion of  the presentation                                                               
on  the  Hecla Greens  Creek  Mine,  located  18 miles  south  of                                                               
Juneau.   Mr. Satre informed  the committees the  governor wishes                                                               
to double  the number of mines  in Alaska, and to  understand how                                                               
to  do so,  he described  the measures  necessary to  advance the                                                               
Greens Creek Mine to production.   Exploration for the mine began                                                               
in 1973 and  the discovery of the deposit occurred  in 1975.  The                                                               
mine is  located within the  Admiralty Island  National Monument,                                                               
established  in  1978,  and provisions  of  the  Alaska  National                                                               
Interest  Lands Conservation  Act (ANILCA)  allow Hecla  to lease                                                               
monument  lands to  support mining  activities.   Permitting  and                                                               
construction  continued from  1980-1989  and  operation began  in                                                               
1989, with continuous  operation since 1996.   He explained value                                                               
creation  is the  point in  a  mine's production  cycle at  which                                                               
there is  a net positive cash  flow; from 1987 to  2006, the mine                                                               
had  a  net negative  cash  flow  after  accounting for  all  the                                                               
operating, capital,  and lease  expenses (slide  17).   Mr. Satre                                                               
stressed  the   need  for  time,  dedication,   persistence,  and                                                               
patience  to  find, permit,  and  open  a  mine, and  to  realize                                                               
profits  (slide 18).   After  2006, metal  prices rose,  the mine                                                               
found efficiencies,  and production was  increased.  The  mine is                                                               
100 percent owned  by Hecla, a 126-year-old  mining company based                                                               
in Idaho (slide 19).  Mr.  Satre cautioned four of the five major                                                               
metal mines in  Alaska are approaching the end of  mine life, but                                                               
mining   companies  invest   millions  of   dollars  in   further                                                               
exploration and  infrastructure to convert resources  to reserves                                                               
or a  mine plan.  For  example, Fort Knox Gold  Mine has acquired                                                               
additional  adjacent land,  Pogo Mine  is exploring  underground,                                                               
and Kensington  Gold Mine  seeks to expand  mine life.   However,                                                               
lower  metal  prices or  changes  in  permitting may  affect  new                                                               
operations.                                                                                                                     
                                                                                                                                
12:27:28 PM                                                                                                                   
                                                                                                                                
SENATOR MICCICHE  asked whether the  amounts shown on  [slides 18                                                               
and 19] are nominal or real dollars.                                                                                            
                                                                                                                                
MR. SATRE said nominal.  Using  Greens Creek as an example, slide                                                               
21  illustrated   the  estimated  exploration,   permitting,  and                                                               
construction  time needed  to bring  a mine  into production,  as                                                               
opposed to the mine life of  five existing mines.  He pointed out                                                               
the possibility of a production  gap in Alaska, although two very                                                               
large projects  are in the  permitting stage, and  other projects                                                               
are  in   advanced  exploration  stage.     He  acknowledged  the                                                               
governor's challenge  of doubling the  number of mines  in Alaska                                                               
is  difficult to  meet.   He agreed  with earlier  testimony that                                                               
advanced exploration projects  in Alaska, if on a  road system in                                                               
the Lower  48, would already be  developed.  In Alaska,  a mining                                                               
prospect must  be world class in  grade or size -  or have access                                                               
and electrical  power to  advance to  production -  otherwise the                                                               
cost  of  development and  operation  are  too  high.   Slide  22                                                               
indicated  what  is  needed  to advance  a  mine  to  production:                                                               
grade, size,  access, and power.   For example, Red Dog  and Pogo                                                               
have large  deposits, Greens Creek  has marine access  and power,                                                               
Fort Knox  has power,  and Kensington has  access.   In addition,                                                               
community support is needed, which  often comes after the mine is                                                               
constructed.   Also needed are  partners, such as  landowners and                                                               
mineral  rights owners,  a stable  fiscal climate,  and a  stable                                                               
regulatory  regime.   He  stressed  the  importance of  a  stable                                                               
fiscal climate  to ensure investment, noting  the mining industry                                                               
should  not  be  taxed  to relieve  the  state's  fiscal  crisis.                                                               
Furthermore,  the permitting  system  in Alaska  is rigorous  and                                                               
science-based  and  should  remain  so  (slide  23).    Slide  24                                                               
illustrated Mr. Satre's  personal view on the status  of mines in                                                               
operation today:   existing mines are doing well  and continue to                                                               
invest and  extend their  mine life;  investment is  difficult to                                                               
obtain  for  exploration but  is  increasing;  Alaska remains  an                                                               
infrastructure-poor state;  there is  good community  support for                                                               
mining  -  although some  projects  are  controversial -  due  to                                                               
mining's great  record; Alaska  Native land  attracts investment;                                                               
state land  does not attract  investment; federal  land uncertain                                                               
for investment;  ANCSA land offers the  best opportunities; state                                                               
permitting regime  is uncertain; fiscal climate  affects staffing                                                               
of resource agencies.                                                                                                           
                                                                                                                                
12:36:13 PM                                                                                                                   
                                                                                                                                
MS.  CROCKETT  began  the  portion of  the  presentation  on  the                                                               
environmental regulatory  regime under which mines  operate.  She                                                               
advised the  legislature, and the public,  address topics related                                                               
to the impacts from mining  that are suggested by proposed policy                                                               
and  advocacy   that  questions  whether  mines   are  adequately                                                               
regulated, and  the environment protected.   She said  the mining                                                               
industry believes Alaska  has a world class  regulatory system as                                                               
follows:   rigorous permitting for  the protection of  air, land,                                                               
water, fish,  and wildlife;  strict operational  oversight during                                                               
the life of the mine;  continued oversight after mine closure and                                                               
reclamation  work to  restore the  site;  financial assurance  to                                                               
cover state  cost if necessary (slide  26).  Slide 27  was a list                                                               
of some of  the permits required to mine in  Alaska.  She advised                                                               
the  planning  and  environmental  study,  review,  testing,  and                                                               
approval process to  permit a large mine takes many  years and is                                                               
reviewed  by  dozens of  state  and  federal agencies.    Permits                                                               
listed on slide  27 are required to permit a  large mine on state                                                               
or  privately-held land,  and  a mine  on  federal land  requires                                                               
additional permitting.  In addition,  agencies can add provisions                                                               
to a  permit that are outside  the governing laws.   Ms. Crockett                                                               
reminded  the   committees  the   permitting  process   does  not                                                               
guarantee approval,  because every  mine is different,  and there                                                               
are multiple  opportunities for  public participation.   Alaska's                                                               
water monitoring system has three  parts:  standard water quality                                                               
monitoring; biomonitoring  of algae  and sediment and  the metals                                                               
uptake, habitat,  and population of fish;  third-party compliance                                                               
audits of company methodology and  results, and of the regulatory                                                               
agency oversight  (slide 28).   Further,  Alaska law  requires an                                                               
approved mine plan  for reclamation and closure,  and an approved                                                               
plan  of  financial  assurance,  before  mine  operations  begin.                                                               
Financial assurance is  required of all mines  and the guaranties                                                               
are reviewed every five years,  or less, by third-party reviewers                                                               
looking  at  the  company,  the   mine  plan,  and  the  agencies                                                               
providing  oversight.     Ms.  Crockett  restated   agencies  can                                                               
prescribe additional  stipulations related  to a permit;  in some                                                               
cases,  mines exceed  permit requirements,  and  she provided  an                                                               
example of a restoration project  completed by Fort Knox Mine and                                                               
the Alaska  Department of Fish &  Game (slide 30).   She reviewed                                                               
the presentation  and questioned  whether the right  policies are                                                               
in place  to encourage  expansion of  the mining  industry (slide                                                               
31).   She expressed hope  the committees and the  industry share                                                               
the following goals:  attract  mining investment to Alaska; bring                                                               
more mines into  production, particularly those on  state land to                                                               
grow  mining  revenue;  keep the  state  competitive  with  other                                                               
mining jurisdictions;  keep the  permitting process  rigorous and                                                               
find efficiencies;  preserve stable and predictable  tax policies                                                               
at  state   and  local   levels;  ensure   responsible  financial                                                               
management of the state (slide 32).                                                                                             
                                                                                                                                
12:43:35 PM                                                                                                                   
                                                                                                                                
REPRESENTATIVE PARISH asked for  the percentage of mine employees                                                               
who are residents.                                                                                                              
                                                                                                                                
MS.   MATTHIAS  said   the  Department   of  Labor   &  Workforce                                                               
Development (DLWD)  reported for 2016, the  nonresident workforce                                                               
for mining  was 36 percent, for  the oil and gas  industry it was                                                               
37 percent,  and for seafood processing  it was 75 percent.   She                                                               
pointed out DLWD statistics are  based on permanent fund dividend                                                               
applications  to determine  residency and  thus "lag  a year  ...                                                               
[and] fail to  capture some of the  self-employed and contractors                                                               
...."   Also, at  the Fort  Knox Mine  in Fairbanks,  because the                                                               
location  of  the mine  is  a  45-minute  drive, 100  percent  of                                                               
employees live in  the Fairbanks North Star Borough;  in the case                                                               
of  isolated camps  and remote  locations, however,  the resident                                                               
percentage  is lower.   She  observed mining  companies encourage                                                               
Alaskans to  apply for  jobs because  it is  an advantage  to the                                                               
company  to  employ  Alaskans.   In  fact,  companies  invest  in                                                               
workforce   development  and   educational   programs  to   raise                                                               
awareness of jobs in the mining industry                                                                                        
                                                                                                                                
CHAIR  GIESSEL  asked  Ms. Cravalho  for  NANA's  perspective  on                                                               
Alaska resident hire and shareholder hire at Red Dog Mine.                                                                      
                                                                                                                                
MS. CRAVALHO said Red Dog Mine  has 78 percent Alaska hire at the                                                               
mine site,  including contractors, and at  NANA, shareholder hire                                                               
is  55  percent.    She related  the  NANA  construction  service                                                               
facility at  Big Lake currently  has 100 employees working  on an                                                               
expansion at Red Dog Mine.                                                                                                      
                                                                                                                                
REPRESENTATIVE PARISH inquired as to  the most effective means to                                                               
encourage Alaskans to work in the mining industry.                                                                              
                                                                                                                                
12:48:40 PM                                                                                                                   
                                                                                                                                
MS. MATTHIAS  pointed out the  resident hire  percentages reflect                                                               
the mining industry as a whole -  not just the five large mines -                                                               
and   include   exploration   jobs,  which   may   be   seasonal.                                                               
Furthermore,  community  infrastructure   -  such  as  affordable                                                               
housing, which is a problem in  Juneau - plays a role in resident                                                               
hire.   Also,  certain  jobs are  highly  specific; for  example,                                                               
teams  of  underground drillers  may  move  around and  work  for                                                               
limited  periods  of  time  at certain  locations,  in  a  manner                                                               
similar  to a  seasonal  career.   A  way  to encourage  resident                                                               
workers is  through the tax  credit for education  program, which                                                               
is an incentive for companies  to provide funding directly to the                                                               
University  of Alaska,  school districts,  and to  vocational and                                                               
technical  schools,  but  the  program   is  due  to  sunset  and                                                               
legislation is needed  to extend the deadline.   In fact, through                                                               
the  education tax  credit  program between  2011  and 2017,  $19                                                               
million has been  contributed by the mining  industry for geology                                                               
and  mine engineering  courses,  the Pathways  to Mining  Careers                                                               
program, and the Alaska Vocational Technical Center (AVTEC).                                                                    
                                                                                                                                
CO-CHAIR  JOSEPHSON  asked  for  the definition  of  an  advanced                                                               
exploration project.                                                                                                            
                                                                                                                                
MR.  SATRE explained  in mining  the first  stage is  grass roots                                                               
exploration with  geologists in the  field; the next step  may be                                                               
geophysics or  a few  drill holes.   Advanced exploration  is the                                                               
point at  which a  company has publicly  declared a  resource and                                                               
may  be  ready to  begin  baseline  environmental studies  before                                                               
applying for a permit.                                                                                                          
                                                                                                                                
REPRESENTATIVE PARISH  questioned whether exit surveys  are taken                                                               
for employees that leave employment at Greens Creek Mine.                                                                       
                                                                                                                                
MR.  SATRE said  yes; however,  the information  is confidential.                                                               
He related  in Juneau  departing employees  commonly report:   no                                                               
road, it rains a lot, housing is too expensive.                                                                                 
                                                                                                                                
12:55:23 PM                                                                                                                   
                                                                                                                                
MS.  CRAVALHO added  the  Northwest Arctic  Borough  is about  87                                                               
percent  Alaska  Native and  American  Indian  residents; when  a                                                               
shareholder has a  job at the mine and leaves  the region, it may                                                               
be due to the high cost of living in rural Alaska.                                                                              
                                                                                                                                
CHAIR   GIESSEL  noted   Representatives  Birch,   Talerico,  and                                                               
Lincoln,  and Senator  Bishop are  all active  in some  aspect of                                                               
mining.                                                                                                                         
                                                                                                                                
SENATOR MICCICHE,  speaking as  a commercial  fisherman, observed                                                               
fishing groups do not perceive  the state's permitting process as                                                               
a [negative] impact  on salmon.  He asked how  to inform "the two                                                               
sides  together to  realize we  have a  robust permitting  system                                                               
that  has  resulted in  the  most  sustainable fisheries  on  the                                                               
planet  and  ... [get]  to  some  solutions without  dramatically                                                               
impacting the lives of every business and Alaskan adversely."                                                                   
                                                                                                                                
MS. CROCKETT  opined the first  step is  to listen to  the mining                                                               
industry on  topics related to  regulating the industry,  and the                                                               
next step  would be to talk  to the permitting agencies  that are                                                               
the experts.  She remarked:                                                                                                     
                                                                                                                                
     I have yet to hear  an agency representative or anybody                                                                    
     that has  a scientific  background, that  regulates our                                                                    
     industry, say  that fish  are not  adequately protected                                                                    
     from  industrial development  in  the  State of  Alaska                                                                    
     ....                                                                                                                       
                                                                                                                                
SENATOR BISHOP  asked whether the  benefits of industry,  such as                                                               
jobs  and payroll,  are directly  tied to  the big  mines in  the                                                               
state.                                                                                                                          
                                                                                                                                
MS.  CROCKETT said  no.   The  benefits  presented represent  the                                                               
entire industry,  including placer  miners and contractors.   The                                                               
employment  statistics include  the five  large metal  mines, one                                                               
operating coal mine, exploration  projects, and the placer mining                                                               
industry.                                                                                                                       
                                                                                                                                
SENATOR BISHOP returned attention to  slide 2 and pointed out the                                                               
average  annual salary  of $108,000  includes  jobs on  rotation,                                                               
which  is a  fantastic salary.    He then  directed attention  to                                                               
slide 24  and noted  small miners help  make discoveries  for big                                                               
mines.                                                                                                                          
                                                                                                                                
1:02:20 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committees, the joint                                                                
meeting of the House and Senate Resource Standing Committees was                                                                
adjourned at 1:02 p.m.                                                                                                          

Document Name Date/Time Subjects
SRES-HRES AMA-CAP 2018 Standard view.pdf HRES 2/13/2018 12:00:00 PM