Legislature(2021 - 2022)BUTROVICH 205
02/05/2021 03:30 PM Senate RESOURCES
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| Overview: Mining - Department of Natural Resources | |
| Adjourn |
* first hearing in first committee of referral
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+ teleconferenced
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| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
February 5, 2021
3:34 p.m.
MEMBERS PRESENT
Senator Joshua Revak, Chair
Senator Peter Micciche, Vice Chair
Senator Click Bishop
Senator Gary Stevens
Senator Jesse Kiehl
Senator Scott Kawasaki
MEMBERS ABSENT
Senator Natasha von Imhof
CALENDAR
OVERVIEW: MININGALASKA DEPARTMENT OF NATURAL RESOURCES
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
CORRI FEIGI, Commissioner
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: Provided an update on the Alaska mineral
industry.
STEVEN S. MASTERMAN, State Geologist/Director
Division of Geological and Geophysical Surveys
Department of Natural Resources
Fairbanks, Alaska
POSITION STATEMENT: Provided an update on the Alaska mineral
industry.
ACTION NARRATIVE
3:34:56 PM
CHAIR JOSHUA REVAK called the Senate Resources Standing
Committee meeting to order at 3:34 p.m. Present at the call to
order were Senators Bishop, Kawasaki, Kiehl, Stevens, and Chair
Revak.
^OVERVIEW: MINING - Department of Natural Resources
OVERVIEW: MINING - Department of Natural Resources
3:35:39 PM
CHAIR REVAK announced the committee will hear an update about
the mineral industry from the Department of Natural Resources
(DNR).
3:36:27 PM
CORRI FEIGI, Commissioner, Department of Natural Resources,
Anchorage, Alaska, noted 2020 for the mineral industry due to
COVID-19 was different than it was for the oil and gas
operations. Although COVID-19 had significant impacts on global
oil prices and production, the mineral sector was far less
impacted, especially from a price and market perspective.
She said the mining industry focused on managing its very labor-
intensive operations to ensure keeping the workforce and local
communities safe, noting many are remote mining operations.
She noted overall production in the mining industry ended up
staying level and on par. However, the greatest impact and
challenge was in the deferral of exploration activities during
the summer of 2020. Companies deferred a lot of their
exploration work to prevent the spread of COVID-19.
3:38:25 PM
She referenced slide 2 regarding companies that reduced or
deferred exploration work to prevent COVID-19 spread and
detailed as follows:
• Ambler Metals canceled a $23 million field program to
protect local workforce
• Peak Gold's Tetlin Project canceled their field program,
but saw Kinross invest over $93 million to acquire a 70
percent share of the project.
• Donlin stopped exploration in early summer, but later
completed more than 23,000 meters of exploration drilling
program without COVID-19 cases or loss time injuries.
• Kensington doubled shift lengths but met expected
production targets for 2020 and completed a multi-million-
dollar exploration drilling program.
COMMISSIONER FEIGI noted the Red Dog, Kensington, and Greens
Creek mines adopted an approach of extending their workforce
shifts. For example, rather than individuals working a two-
weeks-on, two-weeks-off shift, individuals worked a four-weeks-
on, four-weeks-off shift. The shift changes went hand in hand
with COVID-19 protocols to ensure there was no viral spread in
remote communities.
She summarized 2020 was a huge success for the minerals
industry. Companies deferred work but kept communities safe. The
workforce is highly motivated to work hard in the summer of
2021.
3:40:38 PM
She noted from a commodity pricing perspectivewhere oil and gas
took a real hitthe minerals industry prices started 2020 strong
with increases over the course of the year for gold, silver,
copper, and zinc. Metals are the cornerstone of digital
communications and digital device manufacturing.
She detailed metals price increases for 2020 as follows:
• Silver: 59 percent
• Copper: 32 percent
• Gold: 25 percent
She detailed gold closed the previous day at approximately
$1,761 per ounce and continues a robust pricing pace that should
continue in 2021. The mining industry added acreage taken under
claim in 2020 even though the industry could not get "out on the
ground."
She noted Steve Masterman will continue the DNR overview and
will provide specifics on various projects, but she will address
the implications from the Biden Administration's policy
direction and its possible impact on Alaska's mining sector at
the end of the overview.
3:42:34 PM
SENATOR BISHOP asked her to confirm that due to the COVID-19
challenges, the department put out a letter to forgo claim
rentals for a year.
COMMISSIONER FEIGE answered yes, the department placed a hold on
lease rental payments until September 2021. Similar to the
department assisting the oil companies with delayed rentals on
some leases, the department did the same thing to help support
the mining industry.
3:43:48 PM
STEVEN S. MASTERMAN, State Geologist/Director, Alaska Division
of Geological and Geophysical Surveys (DGGS), Department of
Natural Resources, Fairbanks, Alaska, referenced slide 3, 2019
Industry Summary, and addressed production and commodity prices.
He said 2019 saw robust growth in exploration and development
expenditures, the value of the materials produced, and the
industry's revenue were all stable. Metals commodity priceslike
oil prices and the stock marketperformed well in 2020. Metals
prices took a substantial dip in March-April 2020 when there was
a lot of economic uncertainty. However, metals prices have
rallied strongly during the remainder of 2020. 2019 metals
production placed Alaska first nationally in terms of zinc and
lead production.
He noted COVID-19 impacted exploration and development
expenditures, particularly earlier in the summer when people
were still coming to grips with how to work around the virus.
However, exploration and development activity picked up
throughout the summer. The department anticipates a drop in
exploration expenditures from the $171 million in 2019.
3:46:28 PM
SENATOR STEVENS asked him to translate the list of metals and
their periodic table symbols.
MR. MASTERMAN replied the symbols are zinc (Zn), lead (Pb), gold
(Au), silver (Ag), and copper (Cu). Alaska does not produce
copper, but he included its prices because there are a lot of
significant copper prospects in the state that are looking
economically better with the higher copper prices.
3:47:34 PM
At ease.
3:49:54 PM
CHAIR REVAK called the committee back to order.
3:50:03 PM
MR. MASTERMAN referenced slide 4, 2019 Fraser Institute Report.
He explained the institute annually compiles a report of the
global mining industry to see which jurisdictions the industry
considers more attractive for mining via a questionnaire sent to
2,600 individuals and companies. Alaska typically does well in
the report, and he referenced the most recent report from 2019,
shown on slide 4 as follows:
• World's fourth most attractive development area.
• Top U.S. state for mineral potential.
• Top U.S. state for mining-friendly regulatory and fiscal
policies.
• U.S. state best able to meet its own permit timelines.
He noted the state's fourth most attractive development area
ranking is out of 83 jurisdictions. The state's ranking for
permit timelines is no small measure due to the division's
Office of Project Management and Permits.
He said there a couple of areas that Alaska did not shine
particularly well in. One area is the quality of Alaska's
infrastructure where the state ranked 67th out of 83
jurisdictions; that is reflective of the lack of roads into
remote parts of the state where many of the state's resources
occur.
He said the one part of the survey that the division likes to
track is the quality of the geological database. The state
ranked 13th out of 83 jurisdictions, a ranking that continues to
improve.
3:52:40 PM
SENATOR BISHOP pointed out the third bullet point on slide 4
shows Alaska as the top state for mining-friendly regulatory and
fiscal policies, noting Alaska is also the most comprehensive as
far as protecting its environment.
He explained to protect the state's natural resources and the
environment, he must go through a comprehensive permitting
system, [as a miner], as well as the agencies that have to
checkoff on one anotherthat includes the Alaska Department of
Fish and Game, Department of Environmental Conservation, DNR,
and the U.S. Army Corps of Engineers.
SENATOR STEVENS asked him what the division must to do to
improve its database.
3:53:54 PM
MR. MASTERMAN said Senator Bishop's comment on the intricacies
and the difficulty of permitting large mines is a good point.
He explained the division is working to produce information
annually that is digitally available with modern data on
geophysics, geology, and geochemical information. The bottom
line for the database is the amount of resources available in
comparison to the size of the state. Alaska is roughly 20
percent geologically mapped to the usable scale, roughly 15
percent surveyed with airborne magnetics, and far less than that
with other geophysical techniques.
He explained the state's geochemical and analytical database is
roughly 15 percent complete, so there is a lot of work left to
do. Alaska is a big state and working in its outdoors is not
cheap. A lot of other jurisdictions have completed their basic
data layers and that information is available to attract
companies to explore and develop resources.
3:55:51 PM
He addressed a map on slide 5 that shows where the mines are in
Alaska. The department forecasts 2020 production is in line with
the 2019 production and there are no huge changes anticipated.
He noted some of the [mining] developments will change the
production numbers in a matter of a few years. For example, Fort
Knox's production will start to increase as they develop the
Peak Gold Prospect by Tok, they anticipate an additional 220,000
ounces a year of gold to add to their annual total of 240,000
ounces. Pogo Mine is currently upgrading its mill and changing
some of its mining equipment and mining method to increase its
production to roughly 300,000 ounces of gold per year. The state
will start to see the Pogo and Fort Knox gold production numbers
increase when their new measures take effect.
He detailed the Red Dog and Greens Creek mines have been in
operation since 1989 and they are mature operations. The
department sees their productions staying stable. Typically,
mining production goes up and down as the mines move from one
area of an ore body to another where ore grades may change
slightly.
3:57:56 PM
He referenced slide 6 and noted [Kinross Gold Corporation] has
purchased an interest in a project near Tok, the [Peak Gold]
Project, a gold prospect that contains about 1.3 million ounces.
Kinross purchased a 70 percent interest for $93.7 million. The
plans are to truck the ore from the Peak Gold Project to the
Fort Knox mill outside of Fairbanks, so the Peak Gold Project
will not have a processing facility. Kinross is working to
conduct feasibility and initial permitting by the end of 2022
and hopes to be in production by 2024 for approximately five
years. The project will provide good jobs in the Tok area and
for Kinross employees at Fort Knox.
3:59:31 PM
MR. MASTERMAN referenced slide 7 and noted a discovery [Pogo-
Northern Star] made a couple of years agonorthwest of the Pogo
Mine sitecalled the Goodpaster Discovery. The discovery's
drillhole was 17.5 feet at 54.3 grams per-ton gold, which means
high-grade material. The current ore grade at Pogo Mine is about
a sixth of the Goodpaster Discovery, so Goodpaster is a major
discoveryit is what happens when people understand the geology.
He said "hats should go off" to the geologists at Pogo, they
have started to unravel the geologic story and are now making
discoveries like Goodpaster as a result.
He detailed the Goodpaster Deposit is about 2,300 meters long,
500 meters in depth, and is open in all directions. The Pogo
team had a number of drills working on the site at the surface,
converting some of the mineralization into resource and the
understanding is at some point the Pogo underground mining will
move in that direction. The Goodpaster Discovery is exciting, it
speaks to the future of the Pogo Mine, and it is going to be
there for a long time.
4:01:17 PM
He referenced slide 8, Red Dog Exploration, noting the Red Dog
mineas well as Pogohad some exploration success over the past
few years. The discoveries are the Aktigiruq and the Anarraaq
deposits, about 12 kilometers northwest of the Red Dog Deposit.
He explained the two discoveries are of interest for several
reasons. They occur on State landso the State would benefit
financiallyand they are also underground mines due to its
mining depth. The discoveries are very similar in grade and
style of mineralization to the Red Dog Deposit, so the
assumption is Red Dog will truck the ore from the discoveries to
its mill and then off to the coast for shipment.
He stated the two Red Dog discoveries are big. Anarraaq
currently has a resource of 19 million tons of roughly the same
grade as the Red Dog Deposit. However, Aktigiruq is a massive
deposit with the potential to hold as many tons as all of ore
that the Red Dog Deposit has mined, and all the resources
currently identified in the Red Dog areapotentially up to 150
million tonsa massive deposit. As with Pogo, the department is
encouraged by the Red Dog events and foresees mining occurring
in the Red Dog area for many years to come.
4:03:18 PM
MR. MASTERMAN detailed slide 9 shows a map of mining claims. The
noted blue areas on the map represent where the State's mining
claims are on State land. The red areas identify the federal
mining claims.
He summarized Alaska's mining claims as follows:
• State claims: approximately 3,400,000 acres
• Federal claims: approximately 125,000 acres
• 96 percent on State lands
He noted 96 percent of all mineral claims are State of Alaska
claims, which speaks to the State's ability to select lands with
high mineral potential for resource development on State land
versus federal land.
He noted there was a considerable amount of staking [claims] in
2020. One of the large blue areas on the map is in the Ambler
and the southern Brooks Range area [represents a claim staked]
in 2020. The 200,000-acres claim is on State land located on an
extension of the rock unit that occurs in the Ambler Mining
District that goes along the flank of the Brooks Range.
4:05:35 PM
SENATOR KIEHL asked him what the green and orange areas on the
map indicate.
MR. MASTERMAN answered he is not sure and will verify. He noted
one orange area is a federal claim, but he is not seeing a green
area.
SENATOR KIEHL pointed out the location indicated on the map for
the Palmer Prospect is in the Yakutat area, to the west of
Haines.
MR. MASTERMAN replied, the location may have moved on his end.
The Palmer Project is located northwest of Haines.
4:06:49 PM
MR. MASTERMAN noted a map on slide 10 indicates active
exploration projects across the state by the type of mineral
deposit and the metals that it contains.
He detailed the circles on the map indicate prospects as
follows:
• Yellow: gold
• Green: copper, gold, and molybdenum
• Red: polymetallic, like the Palmer Project and the Greens
Creek mine for lead, zinc, silver, and gold.
• Purple triangles: "oddball" prospects with silver and tin
on the Seward Peninsula.
• [Black pentagon]: Granite Creek, a graphite deposit on the
Seward Peninsula.
• [Brown triangle]: rare earth element deposit at Bokan
Mountain in Southeast Alaska.
SENATOR STEVENS noted from national news reports that China is
producing most of the rare earth elements the United State uses.
He asked him to identify where rare earth elements are in
Alaska.
MR. MASTERMAN replied he will address rare earth elements later
in his overview.
4:09:07 PM
He noted slide 11, Executive Order 13817a directive issued by
President Trump in December 2017. The executive order (EO)
identifies the fact the United States is critically reliant on
foreign sources for a number of critical minerals.
He detailed the EO established objectives to meet the policy
goal of reducing the nation's dependance on foreign minerals.
The EO asked the Secretary of Commerce to produce a report to
address the nation's reliance on critical minerals, to assess
the nation's progress towards developing critical minerals in
recycling and reprocessing, to develop options for accessing and
developing critical minerals through trade with partners, and
[create] a plan to improve topographic geological and
geophysical mapping of the United States to support private
sector mineral developmentthat is in part of where DGGS comes
in.
He said in concert with the EO, the U.S. Geological Survey
(USGS) produced a list of critical minerals. Also, because of
the EO, the USGS budget increased by almost $11 million to form
the Earth MRI Project to addresses the geological and
geophysical mapping of the nation, and Alaska is benefitting
substantially from the project.
4:11:19 PM
MR. MASTERMAN referenced slide 12, Critical Minerals, and noted
his intent to define the differences between "strategic" and
"critical" minerals. Critical minerals are minerals that the
nation has for the function of its economyautomobile
production, copper wires, or cellphonesand strategic minerals
are minerals that the nation does not have.
He noted the chart on slide 12 and explained critical minerals
are to the right and strategic minerals are to the leftthe
chart shows the import reliance for those minerals. The nation
is 100 percent reliant on the minerals listed to the left on the
chart, and the nation is less reliant on the minerals listed to
the right on the chart.
He pointed out the [red] shaded bars on the chart indicates
which of the critical minerals Alaska is currently producing,
which are: germanium and indium from the Red Dog Deposit
recovered as byproducts. The green shaded bars show what
critical minerals Alaska has produced in the past: tungsten,
platinum, chromium, tin, antimony, barite, graphite. The blue
shaded bars are commodities that Alaska has the potential to
produce but are not yet producing. The gray bars are critical
minerals DGGS feels that geologically Alaska does not have a
great deal of potential: aluminum, bauxite, potash, helium.
4:13:23 PM
SENATOR STEVENS asked him if Alaska is in a good spot compared
to the rest of the nation for providing rare earth minerals; for
example, are there other production areas in the country that
are producing lithium and is Alaska one of the few states that
could produce lithium.
MR. MASTERMAN explained the major lithium deposits in the nation
are in Nevada's Basin Range country, an area better positioned
to produce lithium. Alaska has favorable positioning to produce
palladium, tungsten, platinum, tin, cobalt, rhenium, vanadium,
bismuth, rare earth elements, platinum group metals (PGMs),
indium, germanium, gallium, graphite, fluorspar, arsenic, and
antimony. Alaska has a lot of critical minerals, but there are
some that the state is less likely to produce, a topic he will
provide additional detail on in his overview.
4:14:47 PM
MR. MASTERMAN noted an illustration on slide 13 that shows some
of the basic uses for critical minerals. The boxes in the
illustration indicate the elements that Alaska has potential to
produce. The areas highlighted in green specify minerals that he
believes has potential for significant contribution towards
mining development.
He noted usage for some critical mineral commodities within the
country is in very small quantities. For example, the total
domestic usage for beryllium is a matter of hundreds of tons.
There are some critical minerals that are not going to be very
significant economically, but some of them are.
4:16:07 PM
He specified critical minerals that Alaska potentially has in
Alaska as follows:
• Uranium: Seward Peninsula
• Rare earth elements: Southeast Alaska, Interior, Seward
Peninsula
• Tungsten: Interior
• Platinum group metals (PGMs): Alaska Range
• Barite: Southeast Alaska, Brooks Range
He explained PGMs is a group of six platinum group metals which
includes platinum and palladium.
He said the slide shows there possibly are major commodities
with significant economic value, but production of other
critical minerals could occur as a byproduct from the production
of more commercially significant commodities. For example, the
Red Dog Deposit produces indium as a byproduct, but not at
levels to solely mine indium. The federal government is focused
on the aspect that production for many critical minerals will
occur in small quantities as byproducts.
He noted of the 35 critical minerals, China is either the top
supplier or the top producer of 22 of those for the United
States. Other significant countries are Russia and the
Democratic Republic of the Congo; that is the reason the nation
has obviously concluded it is in the nation's best interest to
source critical minerals domestically or from friendly
countries.
4:18:02 PM
MR. MASTERMAN referenced slide 14; Solar, Wind, Batteries and
[Electrical Vehicles] (EVs). He noted building components for
President Biden's green energy initiative and his transition to
EVs will require critical minerals.
He detailed the critical mineralscolored yellow on the slide
are important for solar panels and wind turbines. The
commodities colored blue are necessary for production of
batteries and some are necessary for EVscolored green is for
both batteries and EVs.
He said the potentially significant critical minerals in Alaska
are rare earth elements, tungsten, PGMs, titanium, chromium,
vanadiumpotentiallycobalt, antimony, and graphite.
He noted the other commodities shown on the slide would be more
likely produced as byproducts. For example, hafnium rare earth
elements could come from the Bokan Mine Project in Southeast
Alaska. Germanium, indium, and gallium could come from Red Dog
or similar deposits. Zirconium could come from Bokan Mountain or
the heavy mineral sands on Cape Yakutat. The previous list
starts to point the way to which commodities Alaska has that
could benefit under the Biden Administration.
4:20:32 PM
He explained the map on slide 15, Co-location of Minerals, shows
a couple of different things, the first pertains to the color
pattern on the map. The red areas may have a higher number of
critical minerals present and those are the areas that DGGS is
focusing its efforts on first.
He noted the map also shows some of the state's major mineral
belts as follows:
• The Red Dog Deposit and the [Ambler Mining District] are
located on the south flank of the Brooks Range.
• The gold systems are on the Seward Peninsula.
• The Tintina Gold Belt hosts the [Donlin Gold Project] in
Western Alaska, and Fort Knox and the Pogo mines in the
Interior.
• The Base Metals Belt in the Central Interior and Southeast
Alaska.
• The Copper Belt hosts the Pebble Mine and a number of
copper porphyry systems.
MR. MASTERMAN said the slide shows several different things, one
is providing information to benefit critical minerals locations
also benefits other minerals commodities that are present in the
same area, especially when critical minerals are the byproduct
of copper, gold, lead, zinc, and silver production.
He noted the map also shows which parts are hot in terms of
critical minerals, which includes: Eastern Interior, Central
Alaska Range, Western Alaska Range, and parts of the Seward
Peninsula and Southeast Alaska.
4:22:48 PM
SENATOR BISHOP noted mapping of the state via airborne
geological surveys is only 15 percent.
MR. MASTERMAN agreed and noted the DGGS report is a compilation
with USGS that covers half of the critical minerals. The map
shows where DGGS should go to find out what the areas may hold
and prioritizes the need to increase geological mapping and
geophysical surveys.
SENATOR STEVENS stated he appreciates his explanation, so
everyone understands critical minerals. He asked him to explain
the [byproduct mining process] where someone is looking for gold
but not for rare earth elements. He asked him if looking for
critical minerals is possible by reprocessing the leftover
material after gold extraction. He noted fishing has bycatch and
byproduct from mining sounds similar.
MR. MASTERMAN answered he hit the nail on the head regarded ore
already mined to find additional minerals and there is a lot of
work proceeding nationally to look at that very issue. The
Department of Energy (DOE) is looking at by-production of
minerals from current and old mine wastes; for example, coal
ash, produced waters from oil and gas operations, and from
mining operations. The federal government is placing significant
emphasis on by-productionit is very recent and in the formative
stagesand could benefit Alaska for current and future mining.
4:26:07 PM
He noted slide 16 references Senator Stevens' point and shows
mines' primary commodity with minerals listed within parentheses
shows the other minerals present. For example, Fort Knox also
contains small amounts of tin, tungsten, tellurium, bismuth,
arsenic, and antimony; however, currently none of those are
economic for the mine operator to recover. Similarly, with the
other mining operations, not many are recovering the smaller
quantity elements, but recovery could meaningfully impact the
domestic supply of critical minerals.
MR. MASTERMAN said DOE is focusing a considerable amount of
their planning and research on [critical minerals recovery].
Perhaps DOE could work with Fort Knox to install a recovery
system to recover bismuth, tellurium, and tungsten for meeting
the domestic demand.
He explained an interesting conundrum exits between the metals
that are present and the economic benefits achieved by the
recovering the metals. If a mining company mines a deposit that
contains a small amount of bismuth, the company will typically
not recover the bismuth if doing so is not financially
advantageous. However, that is where the federal government may
step in and provide grants or subsidies to facilitate critical
minerals recovery for the national effort.
He noted the slide contains a chart that shows the critical
minerals list. The minerals shaded in an orange-like color are
the minerals that DGGS believes are present for advanced
projects. He pointed out the list contains the majority of the
critical minerals.
He said having DOE conduct the research and development of
[mineral recovery] could benefit Alaska's current and future
mining operations.
4:29:15 PM
SENATOR KIEHL asked him if there are better or worse ways to
retain some of the economic potential for the [critical
minerals] when mines store their tailings.
MR. MASTERMAN explained the fewer times the mines handle the
minerals the better and cheaper, recovering the metals the first
time they go through the recovery plant is the best time since
the metals are marginally economic commodities. Re-mining
something does not economically pay after previous handling;
that is why DOE is looking at developing projects to recover the
metals as they go through the processing plant.
He added DOE is also looking at technologies to recover metals
from any solutions or from re-mining of previously mined waste.
For example, if a mine has an old stockpile that water gets in
and runs through, the mine can treat the water prior to disposal
to recover the critical minerals. DOE is paying a lot of
attention to the recovery of acid mine drainage and the waters
of active mining operations.
4:31:49 PM
SENATOR KIEHL paraphrased his response that there is potential
to adding [recovery technology] later, but the mines are not
sitting on heaps of recoverable material that they did not get
to the first time.
MR. MASTERMAN answered yes, generally speaking, that is the
case.
He explained slide 17 speaks in part to Senator Stevens'
question about what DGGS is doing to increase its geological
database. The Earth MRI Project within USGS receives about $11
million a year, and Alaska is one of 4 regions in the country
that is benefitting from those funds. From the $11 million,
Alaska has been receiving between $1.2 million and $1.5 million
a year for the last 3 years to conduct geophysical mapping,
geological mapping, and geochemical analysis.
He said DGGS decided to first work the Eastern Interior, an area
the division calls the Yukon Tanana Upland (YTU)the uplands
between the Yukon and Tanana Rivers. The map on slide 17 shows
the coverage of the division's geophysical surveys. DGGS covered
the areas colored in green on the map and the division
contracted geophysical surveying for the other colored areas
yellow was under contract from 2019 funding and blue from 2020
funding. DGGS plans to contract surveying in 2021 for the light
blue outlined area via the next round of funding from USGS.
4:34:45 PM
He explained the pink colored area on the map is an area around
the Pogo Districta [survey] area flown over with a helicopter
in the summer 2020the division just published the results of
those surveys. The survey received combined funding from a
capital appropriation from the legislature and approximately
$300,000 of industry money to fly over areas of interest for
additional detail.
He said once DGGS completes other large surveys, the division
will affectively have completed the flying of airborne
geographics over YTU, then the division will move on to another
part of the state. The next area DGGS is considering is likely
the Seward Peninsula. However, the division will first meet with
its advisory board and the mining industry for area
confirmation.
MR. MASTERMAN noted one of the other exciting things DGGS is
doing is reanalyzing all the stream sediment data USGS collected
during their [National Uranium Resource Evaluation] (NURE)
campaign in the 1970s. The division's stream sediment reanalysis
from the area uses modern analytical techniques. The division
expects to provide geology maps, sediment data, and geophysical
data in 2021 via its website.
He said the division's sediment data is going to be a great tool
for attracting industry because they will be able to see where
the metal concentrations are. The data will also be a great tool
for small prospectors who simply do not have the capacity to
handle large datasets. A prospector will be able to get on the
division's website to see where all the mineral values occur.
4:37:31 PM
He referenced slide 18 and explained the Trump Administration
issued EO13953 in September 2020, a second EO to address
critical minerals. The EO speaks to additional measures for
incentivizing and supporting the domestic production of critical
minerals. One of the interesting things about the EO is it
declares a national emergency to deal with the nation's
dependence on critical minerals and that freed up some capacity
within the federal government to address this issue.
He detailed the EO requires the collective heads of federal
agencies to report to the President every six months on the
critical minerals threat and requires the heads of all relevant
agencies to submit a report that details their strategy for
using their authority and appropriations to meet the EO goals.
He explained the EO also calls for the determination whether a
previous EONational Defense Resource Preparednesswould allow
for grants to fund equipment installation for production and
processing of critical minerals in the United States. That is
wherehe believesthe EO ties directly into the mining
operations and the recovery of critical minerals from those
mining operations that are currently in production.
He added the EO also calls for the heads of all relevant
agencies to use their authority to accelerate the issuance of
permits and the completion of projects that could occur in
connection with expanding and protecting the domestic supply of
critical minerals. The EO also directs the [U.S. Department of
Interior's] [Energy Management Program] and the [U.S.
Environmental Protection Agency] (EPA) to look at accelerating
production of critical minerals from mine tailings and abandoned
mine sites; that speaks to Senator Kiehl's question on whether
someone is looking at [recoverable materials] and the EO is
mandating that.
MR. MASTERMAN said there are a lot of good things from the EO,
and there is something else that ties into permitting, the
[Fixing America's Surface Transportation Act] (FAST-41). He said
Commissioner Feige will provide additional information on FAST-
41.
4:40:59 PM
COMMISSIONER FEIGE reiterated EO13953 focuses on streamlining
mine development and especially for offsetting production from
adversarial nations like China. The EO also ties into another
action during the Trump Administration, the modernization of the
National Environmental Policy Act (NEPA), as well as a federal
statute established in 2015 for critical infrastructure
permitting, FAST-41.
She explained via FAST-41, a minefor example, Graphite Onecan
directly offset imports from China by achieving FAST-41 ranking
status through federal programs, a program the department is
monitoring under the Biden Administration.
She said from a policy standpoint, the department is not hearing
whether the Biden Administration is significantly softening
their approach to China or other adversarial nations that
currently control the critical minerals market. There is a pro-
mining group coming back into the [U.S. Department of the
Interior], so she is cautiously optimistic about where the State
will go with FAST-41 and a streamlined NEPA approach via Biden
Administration policies.
4:44:36 PM
CHAIR REVAK announced Senator Micciche joined the committee
meeting.
MR. MASTERMAN noted slide 19, the Department of Energy (DOE) has
taken an aggressive move into the critical minerals spheresome
might think this is outside of their jurisdiction and perhaps it
isbut they are a remarkable group of people working in a
department with very deep pockets. DOE has made some very
fundamental advances in other parts of the natural resource
industry, particularly with fracking development.
MR. MASTERMAN said the engagement of DOE in critical minerals
could be a very significant development. DOE is possibly moving
into the realm formally occupied by the U.S. Bureau of Mines
disbanded [in 1996]. DOE is looking at technological changes,
research and development into extractive technologies,
innovative processing, and disruptive processing technologies to
address the recovery of critical minerals from any and all
possible sources.
He noted about six months ago, DOE put out a finding proposal to
look at rare earth and critical minerals associated with carbon
oresfirst bullet point on slide 19, DOE CORE-CM funding
opportunity. They are looking at the opportunities to produce
critical minerals in conjunction with oil and gas.
He added DOE wants to assess several sedimentary basins around
the country including one in Alaska. The assessment is a
significant opportunity that involves DGGS and the University of
Alaska (UA), ultimately leading to a phase-one application for
almost $2 million to characterize the critical minerals
associated with coal, oil, and gas fields across Alaska. If DGGS
and UA are successful, there are future phases which then call
for technological developments and research technologies for
metals recovery identified in the first phase.
4:48:11 PM
He noted DOE issued a request for information after holding a
workshop in November 2020a workshop he attended. DOE sent him a
copy of their request for information. The four main points DOE
is looking fornoted on the second bullet point on slide 19
tells DGGS the direction they are looking at going with their
research and development activities. He referenced the subpoints
from the second bullet point as follows:
• Resource Characterization and Technology Development
• Sustainable Resource Extraction and Beneficiation
Technology Development
• Extractive Metallurgy, Reduction and Alloying Technology
Development
• International Engagements, Standards, and Supply Chain
Development
He said resource characterization relates to technology
development to speed up mapping of the country to better
understand critical minerals depositsthat is definitely in the
DGGS "wheelhouse."
MR. MASTERMAN explained sustainable resource extraction and
beneficial technology development pertains to DOE looking at new
technology deployment to assist with critical minerals
extraction across all resource industries, whether oil, gas, or
coal.
He said DGGS is trying to respond to DOE by pulling together its
personnel along with UA, [Alaska Miners Association] (AMA),
[Resource Development Council] (RDC), [Ucore Rare Metals]
(Ucore), Graphite One, and some of the other miners in the state
to get their input to point DOE in the appropriate research and
development direction that benefits Alaska and its mining and
energy industries.
4:50:41 PM
SENATOR KIEHL said the DOE grant application to look for rare
earth minerals in coal basins is interesting, noting previous
slides referenced rare earths in hard rock.
He asked him if the grant is to look for a whole other set of
rare earths found within coal in sedimentary basins because no
one had the time to look for them.
MR. MASTERMAN explained sedimentary basins are a different
geological environment for rare earths, most mineral deposits
occur in igneous and metamorphic rocks in the uplands, like
granites. Volcanoes put out rare earths within its ash that gets
into streams and sedimentary basinsultimately enriching clay,
coal, and fine grain sediments. Typically, rare earths are not
present in quantities that by themselves would be economic to
mine, but as a by-production of coal or oil and gaslocated
within its associated waterthere may be opportunities to
recover critical minerals from environments that are atypical
from a geological standpoint.
4:53:39 PM
He addressed the final bullet point on slide 19 and noted DOE
established the [Division of Minerals Sustainability]funded in
the $800 million levelto conduct research into producing
critical minerals from alternative methods. DGGS will focus its
response to the Division of Minerals Sustainability and
hopefully get DOE to aim some of its funding to UA and the State
as well.
COMMISSIONER FEIGE referenced slide 20, Biden Administration
Policy Goals. She said the Biden Administration's heavy focus on
energy targets will have massive implications for critical
minerals and rare earth development for new technologies. The
Made in America/Build Back Better initiativeswhile it has not
singled out miningfocuses on the domestic industry and
manufacturing. Renewable infrastructure takes a tremendous
amount of minerals to build the infrastructure for batteries,
EVs, communications infrastructure, etcetera.
COMMISSIONER FEIGE noted DNR has not seen the same kind of anti-
fossil-fuel rhetoric out of the Biden Administration as has
unfortunately occurred on the oil and gas side. However, the
Biden Administration's focus on its agenda towards massive
investment to advance infrastructure and technology bodes well
for Alaska and its mining industry.
4:56:55 PM
She addressed slide 21 and said there is a fair bit of
uncertainty and some challenges ahead for Alaska with the Biden
Administration, even where mining and minerals development is
concerned. DNR will watch closely the resistance to NEPA
streamlining, FAST-41 permitting reform, and the [30 by 30
(30x30) conservation initiative].
She stated the Biden Administration's 30x30 initiativeplaces 30
percent of the nation's land and 30 percent of the nation's
water into conservation units by 2030gives one great pause when
considering Alaska already has more than 160 million acres tied
up in conservation or park units. The State will be pointing to
the [Alaska National Interest Lands Conservation Act] (ANILCA)
and its "no more" clause at every turn to remind the federal
government that Alaska has already paid its dues where
conservation units are concerned.
She said DNR will watch the support for increased corporate
taxes, potential new federal mining royalties, and other
commercial challenges that could impact already high operating,
production, and development costs for mining operators
[especially from a global perspective when considering Alaska's
inherent lack of infrastructure with things like higher power
costs].
She noted one thing that does bode well for Alaska is that
"personnel is policy." Many of the leaders and staff in the
Biden Administration have come back from the Obama
Administrationeven during that time there was historical
support for mining. If the Biden Administration is going to meet
its renewable energy and other modernization goals, they are
going to rely very heavily on a domestic mining industry.
4:59:29 PM
SENATOR STEVENS said he appreciates her comments and the
importance of reaching the Biden Administration's energy goals.
He asked her if there are things the legislature should be doing
in terms of credits or tax assistance.
COMMISSINER FEIGE replied while she has not contemplated credits
or things of that nature, there are things that the legislature
certainly can do. She said about the notion of "listening to
science," Alaska must establish what it believes is acceptable
in the way of good, robust sciencethe underpinning of federal
permitting, rulemaking, and action decisions. Also, Alaska must
lean in with its federal partners to let them know the state can
contribute significantly to the modernization into the
development and expansion of renewable resources, messaging that
is very important.
CHAIR REVAK thanked the Commissioner Feige and Director
Masterman for their overviews. He said the legislature will
"lean in" and noted his appreciation that she brought up ANILCA
and the "no more" clause. He noted the committee will receive an
ANILCA overview on the following Monday.
5:02:03 PM
There being no further business to come before the Senate
Resources Standing Committee, Chair Revak adjourned the meeting
at 5:02 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SRES Mineral Industry Update 2.5.2021.pdf |
SRES 2/5/2021 3:30:00 PM |
SRES DNR Mining Overview 2-5-21 |