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63(&,$/ 5(3257 $Laska·S 0Ineral ,Ndustry 63(&,$/5(3257 $ODVND·V0LQHUDO,QGXVWU\ Joe Usibelli, on left, and Joe Usibelli, Jr., on right, cutting the ribbon at the grand opening of the Two Bull Ridge coal mine near Healy on July 26, 2003. Opening of the mine coincided with the celebration of 60 years of coal mining by Usibelli Coal Mine Inc. in the Healy area. The Two Bull Ridge Mine is projected to produce coal for at least 20 years at current rates of extraction. Photo by Chris Arend, provided by Usibelli Coal Mine Inc. ',9,6,212)*(2/2*,&$/ *(23+<6,&$/6859(<6 LQFRRSHUDWLRQZLWK 2IILFHRI(FRQRPLF'HYHORSPHQW 'LYLVLRQRI0LQLQJ/DQG :DWHU $ODVND·V$ODVND·V 0LQHUDO0LQHUDO ,QGXVWU\,QGXVWU\ by D.J. Szumigala, R.A. Hughes, and R.H. Harris Division of Geological & Geophysical Surveys SPECIAL REPORT 58 STATE OF ALASKA Frank H. Murkowski, Governor DEPARTMENT OF COMMERCE, COMMUNITY & ECONOMIC DEVELOPMENT Edgar Blatchford, Commissioner OFFICE OF ECONOMIC DEVELOPMENT Caryl McConkie, Manager DEPARTMENT OF NATURAL RESOURCES Tom Irwin, Commissioner DIVISION OF GEOLOGICAL & GEOPHYSICAL SURVEYS Rodney A. Combellick, Acting Director DIVISION OF MINING, LAND & WATER Bob Loeffler, Director DGGS publications may be inspected at the following locations. Address mail orders to the Fairbanks office. Alaska Division of Geological University of Alaska Anchorage & Geophysical Surveys Consortium Library ATTN: Geologic Communications 3211 Providence Drive 3354 College Rd. Anchorage, Alaska 99508 Fairbanks, Alaska 99709-3707 Elmer E. Rasmuson Library ARLIS (Alaska Resource Library University of Alaska Fairbanks and Information Service) Fairbanks, Alaska 99775-1005 3211 Providence Drive Anchorage, Alaska 99508 Alaska State Library State Office Building, 8th Floor 333 Willoughby Avenue Juneau, Alaska 99811-0571 This publication, released by the Division of Geological & Geophysical Surveys (DGGS), was produced and printed in Fairbanks, Alaska, by UAF Printing Services, at a cost of $2.52 per copy. Authority to print this and other publications comes from Alaska Statute 41.08.020, which charges DGGS “to determine the potential of Alaskan land for production of metals, minerals, fuels, and geothermal resources; the location and supplies of groundwater and construction materials; the potential geologic hazards to buildings, roads, bridges, and other installations and structures; and . conduct such other surveys and investigations as will advance knowledge of the geology of Alaska.” In addition, Alaska Statute 41.08.030 states, “The state geologist shall print and publish an annual report and such other special and topical reports and maps as may be desirable for the benefit of the state…” NOTE: Mention of any company or brand name does not constitute endorsement by any branch or employee of the State of Alaska. ii (;(&87,9(6800$5< Alaska’s Mineral Industry 2003 is the twenty-third in a series of annual reports. This report is part of a cooperative venture between the Division of Geological & Geophysical Surveys (DGGS) and the Division of Mining, Land, & Water (DMLW) in the Department of Natural Resources (DNR) and the Office of Economic Development (OED) in the Department of Commerce, Community & Economic Development (Commerce). The 2003 cumulative value of Alaska’s mining industry is $1.067 billion, a decrease of about $6 million from the $1.073 billion reported in 2002. Alaska’s mineral industry has topped one billion dollars for eight consecutive years. The 4 percent increase in the exploration investment over the previous year ($27.6 million in 2003 versus $26.5 million in 2002) was compounded by a 15 percent increase in development investment ($39.2 million in 2003 versus $34.1 million in 2002). The decreased value of mineral products ($1,000.7 million in 2003 compared with $1,012.8 million in 2002) led to a lower cumulative value of the mineral industry in 2003 compared to 2002. An increase in placer gold production during 2003 could not offset the decrease in lode metal production from several of Alaska’s largest mines and a significant decrease in volume of reported sand and gravel production. Metals, with a value of $888 million, accounted for 89 percent of total production; and zinc continued to be the most valuable metal. Total minerals industry employment in 2003 is estimated to be 1,906 full-time-equivalent jobs, a drop of about 900 jobs from the 2,824 jobs reported in 2002. Jobs declined across the mineral industry except for exploration. Large mines cut employees during the year while responding to low metal prices. Most of the job decline was in the develop- ment and industrial minerals sectors. The rebound in metal prices will likely prompt an increase in mining jobs in 2004. About 2,443 new state mining claims (296,800 acres), 92 new state prospecting sites (14,720 acres), and 676 new federal claims (595 lode, 81 placer, for a total of 13,520 acres) were staked in 2003. State claim staking increased dramatically from 2002 levels, while the number of new federal mining claims almost tripled from 2002 levels and reached staking levels not seen since 1997. The amount of land in Alaska under claim increased from 2002 to 2003, with approximately 2.9 million acres of land covered by claims or prospecting sites in 2003. The largest groups of claims (mostly state claims) in Alaska occur in the Fairbanks, Pogo, Tangle Lakes (Denali Block), and Pebble areas. Drilling was conducted during all phases of mining (exploration, development, and production) and drilling totals for 2003 are 270,456 feet of core drilling and 100,178 feet of reverse-circulation drilling. The eastern interior region had the most drilling of all Alaska regions, followed by the southeastern and southwestern regions. Exploration during 2003 occurred across most regions of the state, with the exception of the Alaska Peninsula area, in which there was no known mineral exploration. Several large projects accounted for most of the exploration expen- ditures and drill footage: Donlin Creek gold project (Placer Dome Inc.), Pebble copper–gold project (Northern Dynasty Minerals Ltd.), Greens Creek mine exploration (Kennecott Minerals Co./Hecla Mining Co.), Tintina Gold belt projects (Anglo Alaska Gold Corp.), Union Bay platinum–nickel–copper project (Freegold Ventures Ltd./Lonmin PLC) in southeastern Alaska, Nixon Fork gold–copper mine project (St. Andrew Goldfields Ltd.) and Fairbanks mining district gold projects (Kinross Gold Corp.). About 41 percent and about 26 percent of the 2003 Alaska exploration expendi- tures were spent in southwestern Alaska and eastern interior Alaska, respectively. Gold remained the major exploration commodity, with more than $19 million spent on precious metal exploration in 2003, but polymetallic and platinum- group-element exploration also increased from recent levels. Platinum-group-element exploration increased to almost four times the 2002 levels. Base-metal exploration in 2003 was at historic lows, reflecting continued low zinc and lead prices through much of the year. Higher metal prices during the latter parts of 2003 significantly extended Alaska’s field season, with several large projects beginning during the normally waning parts of the exploration season. As in years past, most exploration funds, more than 68 percent, were derived from Canadian sources. Reported and estimated 2003 mine development expenditures totaled $39.2 million, a slight increase of $5.7 mil- lion from the $33.5 million reported for 2002. Mining development projects in 2003 included lode projects at the Kensington (gold) project in southeastern Alaska, Rock Creek (gold) project in western Alaska, and Pogo (gold) project in the eastern interior region. Significant development in the placer sector occurred at the Nolan Creek (gold) project in northern Alaska and Nome placer project in the western region. These projects consisted primarily of feasi- bility studies and permitting but included substantial drilling at Rock Creek, and underground development and drilling at Nolan Creek. Gold production was reported from Illinois Creek, Fort Knox, and Greens Creek mines, and at more than 60 placer mines. Silver was produced at Red Dog and Greens Creek mines, which were also the primary producers of zinc and lead concentrates. Greens Creek Mine achieved record production for the second consecutive year while tons milled at Red Dog and Fort Knox decreased very slightly from robust 2002 levels. Placer gold production increased by about 750 ounces compared to 2002 production, while sand, gravel, rock, and other industrial materials saw a significant decrease. Usibelli Coal Mine marked its 60th year of operation, produced 1,088,000 tons of coal, and signed a new 2-year 400,000-tons-per-year contract with South Korean power companies. iii Executive Summary, cont'd. In government actions, the Alaska Division of Geological & Geophysical Surveys (DGGS) conducted a 20-day geologic mapping project near Livengood and released maps and results from a 618-square-mile geophysical survey in the Council area of the Seward Peninsula. Geophysical surveys funded by the U.S. Bureau of Land Management (BLM) and managed by DGGS were released for the Delta River area (portion of the Denali Block) west of Paxson, and in the Sleetmute area of southwestern Alaska. During 2003, changes to the state permitting process were made with the transfer of the Alaska Coastal Management Program and Division of Habitat to the Department of Natural Re- sources (DNR). DNR issued the final state permits needed for Teck–Pogo Inc.’s Pogo Mine Project on December 18, 2003. A large mine project team was established by state agencies to coordinate state permitting activities for the Pogo Gold Project. DNR also began working as a cooperating agency with the U.S. Forest Service and U.S. Environmental Protection Agency on the necessary permits for the expansion of the Greens Creek tailings facility in southeastern Alaska. On August 6, 2003, DNR and BLM agreed to a new cooperative agreement to allow mining operators on federal lands to continue to use the Alaska Bond Pool.
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