Legislature(1999 - 2000)
02/23/2000 05:11 PM House EDT
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
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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