03/12/2012 03:30 PM Senate RESOURCES

                    SB 123-ALASKA MINING DAY                                                                                
                                                                                                                                
3:53:54 PM                                                                                                                    
CO-CHAIR PASKVAN announced the consideration of SB 123.                                                                         
                                                                                                                                
SENATOR CATHY  GIESSEL, Alaska State  Legislature, sponsor  of SB
,  said the  bill  establishes  May 10  every  year as  Alaska                                                               
Mining  Day. It  recognizes the  role of  development of  mineral                                                               
resources and that role in Alaska's  history and growth - and its                                                               
future. She said  the sponsor statement reviews  that history and                                                               
that mining today  continues to be a source of  jobs and economic                                                               
impact in  communities where  mining has been  going on  for more                                                               
than a  century. For  example, Fort  Knox in  Fairbanks purchases                                                               
its  power  for Golden  Valley  Electric  Association (GVEA)  and                                                               
because of the  impact of that power purchase it  lowers the cost                                                               
of electricity for  the consumers in Fairbanks by  $.1 a kilowatt                                                               
hour. Livengood  also might have  a mine  in the future  and they                                                               
are  also  planning to  purchase  power  from GVEA,  which  would                                                               
provide another significant impact for the Fairbanks ratepayers.                                                                
                                                                                                                                
She  said Nome  is having  quite a  mining boom  with gold  being                                                               
found under  the water on  the beach. A  couple of days  ago, she                                                               
talked  to the  representative from  Nome who  has a  one bedroom                                                               
house he  posted for rent.  Within 24 hours  he had more  than 30                                                               
hits,  because last  year they  ran out  of housing.  This mining                                                               
activity is having quite an  impact economically on the community                                                               
of Nome.                                                                                                                        
                                                                                                                                
Juneau,  which is  named for  Joe Juneau,  had three  very robust                                                               
mines  build up  the community.  Today, some  of the  tunnels are                                                               
being used to  store water for emergency fire  response. In 2010,                                                               
100 private  sector jobs were created  in the Juneau area  at the                                                               
Kensington Mine.  The average wage  in mining is $95,000  a year.                                                               
In fact, the largest private  sector employer is the Greens Creek                                                               
Mine. So mining is having  quite a significant economic impact in                                                               
Juneau.                                                                                                                         
                                                                                                                                
She reviewed the  contents of their SB 123  packets that included                                                               
a new update  from Dr. Scott Goldsmith, dated March  2012, on the                                                               
structural  analysis of  the Alaska  Economy Mining  Section. She                                                               
thanked  the chair  and Senator  Wagoner  for signing  on as  co-                                                               
sponsors of the bill.                                                                                                           
                                                                                                                                
3:58:08 PM                                                                                                                    
SENATOR STEDMAN  said he  thought having a  designated day  was a                                                               
good idea, but  one of the most infamous mines,  Rodman Bay Mine,                                                               
was left off as was the Chichagof Mine in Southeast.                                                                            
                                                                                                                                
SENATOR  GIESSEL thanked  him and  remarked  that Bokan  Mountain                                                               
contains rare  earth elements  and they are  looking for  quite a                                                               
robust development there, which will impact Southeast.                                                                          
                                                                                                                                
3:59:18 PM                                                                                                                    
FRED  PARADY,  Executive  Director,  Alaska  Miners  Association,                                                               
Anchorage, AK, supported for SB  123. He said his organization is                                                               
a  nonprofit organization  established in  1939 to  represent the                                                               
mining  industry in  Alaska. It  is composed  of more  than 1,400                                                               
individual prospectors,  geologists, engineers,  vendors, suction                                                               
dredge miners,  small family mines,  junior mining  companies and                                                               
major mining  companies. Throughout the state  they produce gold,                                                               
silver, platinum, diamonds, lead,  zinc, copper, coal, limestone,                                                               
sand, gravel,  crushed rock,  armor rock  and other  material and                                                               
the members live  and work throughout the state in  each of their                                                               
districts.                                                                                                                      
                                                                                                                                
MR. PARADY said the anniversary of  the General Mining Act of the                                                               
United  States is  May  10,  making it  an  appropriate date  for                                                               
celebrating   mining.  He   explained  that   minerals  are   not                                                               
discovered  in  a  vacuum;  they   are  a  product  a  particular                                                               
technical  knowledge and  skill  coupled with  tenacity and  risk                                                               
taking. These  minerals were essentially  the primary  drivers of                                                               
Alaska's  early   economic  development   and  cities   such  and                                                               
Fairbanks, Juneau and  Nome were founded on mining  and today the                                                               
same sort of  cities - Fairbanks, Juneau,  Kotzebue and Anchorage                                                               
- are  reliant on the  products of  mining and the  prosperity it                                                               
brings to the Alaskan economy.                                                                                                  
                                                                                                                                
MR.  PARADY  said  mining  is   also  a  key  driver  to  further                                                               
development  of  infrastructure across  the  state,  but what  he                                                               
really wanted to focus on was  the workforce it would create. The                                                               
recent  McDowell report  estimated the  creation of  4,500 direct                                                               
jobs with a new average wage of $100,000.                                                                                       
                                                                                                                                
He asked  them to replace  their mental image  of a miner  with a                                                               
sledge hammer to  one of a miner at the  controls of multimillion                                                               
dollar highly  computerized piece of equipment  that is producing                                                               
the  resources from  the earth  that everyone  relies on.  Miners                                                               
today are  highly skilled;  they have  to be  knowledgeable about                                                               
high   pressure  hydraulics,   high  voltage   electronics,  rock                                                               
mechanics, instrumentation and controls.                                                                                        
                                                                                                                                
MR. PARRADY said Alaska has  seven operating mines: Usibelli Coal                                                               
Mine,  Greens Creek,  Red Dog,  Fort Knox,  Pogo, Kensington  and                                                               
Nixon  Fork,  and  substantial  projects  are  moving  their  way                                                               
through  exploration  including  Chuitna, Wishbone  Hill,  Donlin                                                               
Gold, Livengood,  Niblack and Pebble.  There were  60 exploration                                                               
projects  last year  that spent  more than  $100,000 and  30 more                                                               
projects spending more than $1  million. This is the leading edge                                                               
of  the next  generation of  mining in  Alaska -  the exploration                                                               
phase.                                                                                                                          
                                                                                                                                
He concluded with a quote from  President Abe Lincoln in a letter                                                               
to  miners  meeting  in  Denver at  the  Western  Association  of                                                               
Miners. It was on April 14, 1865. His message was:                                                                              
                                                                                                                                
     Tell  the miners  from me  that I  shall promote  their                                                                    
     interests to  the utmost of  my ability,  because their                                                                    
     prosperity  is the  prosperity of  the  nation, and  we                                                                    
     shall prove in a very few  years that we are indeed the                                                                    
     treasury of the world.                                                                                                     
                                                                                                                                
4:03:39 PM                                                                                                                    
SENATOR STEVENS noted  that Koniaq Corporation is  opening a very                                                               
large granite quarry on Kodiak  Island and asked if he considered                                                               
that mining.                                                                                                                    
                                                                                                                                
MR. PARADY  said yes and  apologized for omitting that  mine from                                                               
his list.  He added that one  of the hidden stories  of mining in                                                               
modern day  Alaska is that  the Native Corporations  benefit from                                                               
the  mining  industry  activity through  7(i)  and  7(j)  royalty                                                               
sharing payments,  which amounted  to $82  million last  year for                                                               
Red Dog. Koniaq is in the same vein.                                                                                            
                                                                                                                                
MR. PARADY said  that modern mining techniques  bring the ability                                                               
to  meet   modern  environmental   standards,  because   you  are                                                               
generating wealth and are able to do good work.                                                                                 
                                                                                                                                
CO-CHAIR PASKVAN held SB 123 in committee.