Energy & Mining

There could be a lot more precious metal beneath the surface of Admiralty Island near Juneau. 

Hecla Greens Creek Mine spokesperson Mike Satre said you can’t find something if you’re not looking.  The mine leases a package of land on the northern end of the island. 

“We do exploration in that package, I mean, quite frankly, hoping to find another Greens Creek,” he said. 

Green’s Creek is the largest silver mine in the nation. And, it’s also one of Juneau’s largest employers. It’s been operating there for decades and is slated to continue for at least another dozen years. 

“By doing that exploration we hopefully add to our reserve base, extend the mine and continue the economic benefits that we’ve been able to provide to the region since 1989,” Satre said. 

More mineral deposits could mean more high-paying jobs that could boost the local economy. However, some environmentalists have shared apprehension about the mine’s potential to contaminate the environment around where it operates. 

The mine has exclusive mineral rights to a package of roughly 7,400 acres of land on Admiralty Island. The U.S. Forest Service allows it to operate there because the mine has claims to the area that predated the island’s establishment as a monument.

The proposed year-long exploration of that land would involve geologic mapping, soil surveys and drilling. They’re looking for minerals like lead, zinc and silver. Satre said a lot of the work will be done via helicopter. 

The plans come just a month after the U.S. Forest Service officially permitted a project for the mine to expand storage for its tailings, or the ground-up rock that’s leftover after digging for metals.

The decision came after a five-year public process and its approval means the mine could live on for up to another 18 years. Hecla is now working to get the necessary permits to break ground on that project sometime next year.

“Generally, the best place to find a new ore deposit is right next to an existing one and so we want to fully explore Hecla’s land package in the Greens Creek Valley and that could tie into that tailings expansion,” Satre said. 

The proposed exploration needs to be approved by the Forest Service before it can move forward. The Forest Service will accept public comments for the next 30 days. Paul Robbins, a spokesperson for the Forest Service, said the agency hopes to have a final decision by February.

Alaska oil revenues are expected to decline over the next few years, helping create a budget deficit that will have to be filled in with state savings, according to a semiannual forecast released by the state Department of Revenue on Thursday.

The new forecast is more pessimistic about the state’s oil-money prospects over the next few years than was the department’s previous forecast, released in March, noted Department of Revenue Commissioner Adam Crum.

“This is due to lower oil prices, as well as higher lease expenditures,” Crum said at a news conference held by Gov. Mike Dunleavy. Oil price estimates are based on the futures market, he said.

Oil production through the end of the 2020s decade will also likely be lower than what was expected in the department’s previous forecast, released last spring, “but there is an expected increase in production and revenues after that,” Crum said.

The new forecast predicts that North Slope oil production will average 466,600 barrels per day in the current fiscal year, which started on July 1, and rise slightly to 469,500 in the fiscal year after that. Average production for fiscal 2024, which ended on June 30, was 461,000 barrels per day.

Alaska North Slope production peaked in 1988 at over 2 million barrels per day.

While Alaska North Slope oil prices averaged $85.24 in the 12 months that ended on June 30, they are expected to be only $73.86 in the current fiscal year and $70 in the year after that, then hold steady within a range between $68 and $73 a barrel through the early 2030s, according to the forecast.

That is $4.14 per barrel lower for the current fiscal year and $4 per barrel lower for the next fiscal year than the prices predicted in the department’s March revenue forecast.

Counting all sources, the state will receive $220 million less in the current fiscal year and $232 million less in the following year than was expected last spring, according to the forecast.

The forecast predicts a significant upswing in production in the latter part of the decade, eventually bringing average North Slope production to over 600,000 barrels per day in the early 2030s and 656,866 by the middle of that decade.

That is attributed in large part to two projects in development on the western side of the North Slope: Pikka, operated by the Australian company Santos, with Repsol as a partner, and Willow, the ConocoPhillips project that is on federal land and expected to produce up to 180,000 barrels per day at its peak. Willow production is expected to start in 2029.

But the revenue boost from that new development will lag the increase in production, according to the forecast.

The state’s total petroleum revenues in the 12 months that ended on June 30 were a little over $3 billion, the forecast said. That total will drop to around $2.2 billion in coming years before starting to rise in the early 2030s. A decade from now, Alaska’s total petroleum revenues will have rebounded – but only to a level about equal to the total in just-completed fiscal 2024. That would not account for inflation.

While Willow is set to be a major oil producer, it is not expected to provide significant royalty income that could be used for the state budget, unlike fields that are located on state land. Under federal law, royalties from oil production within the petroleum reserve are to be split between the federal government and a fund for North Slope communities’ use.

Oil income is less important to the state budget than it was in the past, when it contributed as much as around 90% of funds the state can spend on services without restrictions.

In the 12 months that ended on June 30, oil money made up 37% of the state’s $6.6 billion in unrestricted revenue, a category that does not include the $6.1 billion contribution from the federal government.

In contrast, earnings from investments – primarily from the Alaska Permanent Fund – accounted for 55% of the state’s unrestricted revenue in the last fiscal year, according to the newly released forecast.

Crum, at the news conference, explained the shift away from past patterns when oil was the main source of unrestricted revenue.

Starting about six years ago, he said, the state transitions from depending primarily on oil revenues to its unrestricted funds to depending on investment income for “a significant share” of the budget, he said. That investment money comes primarily from the Alaska Permanent Fund – the state spends roughly 5% of the fund’s total market value each year.

“Alaska is now, at least partially, an endowment state,” he said, adding that no new taxes accompanied the switchover. “Alaska is the first state in the United States to achieve this status,” he said.

Earnings from the Permanent Fund are expected to put $3.7 billion into the general fund for the current fiscal year and $3.8 billion in the following fiscal year, according to the forecast. That money is to be used both for state government operations and for annual dividends paid to residents, the forecast said.

A western Alaska tribal consortium has appealed a key permit for a proposed gold dredging project in waters near Nome.

Kawerak, a nonprofit that serves some 20 Iñupiaq and Yup’ik tribes in the Bering Strait region, last month asked state regulators for a hearing on a wastewater discharge permit for the project.

The permit, a federal Clean Water Act authorization that’s administered by the state, would allow the Las Vegas-based company behind the project, IPOP, to discharge a limited amount of pollutants into an estuary about 30 miles from Nome, in the scenic Safety Sound area.

In its appeal, Kawerak says the Department of Environmental Conservation, the state agency that issued the permit, “failed to consider the project’s effect on the surrounding Native communities” in its analysis.

The appeal says that IPOP’s development would come “at the direct expense of the Native economy” and that “local Native subsistence and cultural practices will be directly and adversely affected — if not outright destroyed.”

IPOP’s project is opposed by several regional and local groups, including Bering Straits Native Corporation and the City of Nome.

Last spring, the U.S. Army Corps of Engineers approved a different permit for the project, reversing an earlier decision to deny it.

Northern Journal contributor Max Graham can be reached at max@northernjournal.com. He’s interested in any and all mining related stories, as well as introductory meetings with people in and around the industry.

This article was originally published in Northern Journal, a newsletter from Nathaniel Herz. Subscribe at this link.

 

A potential copper and zinc mine has fueled intense political debate in a small Southeast Alaska town for years.

Now, the multinational metals company that’s been bankrolling the exploration project is stepping away, raising questions about the project’s future.

In a deal announced this week, Dowa Metals and Mining, a Japanese company, will give up its roughly 70% interest in the Palmer Project near the Southeast Alaska communities of Haines and Klukwan.

Taking over is American Pacific Mining Corp., a Canadian company that owns no operating mines and instead focuses on exploring deposits that could become mines later on. It’s set to take full ownership of the project by the end of the year, up from its current 30% minority stake.

The copper and zinc project, at least in the immediate future, will lose the backing of a large company with a steady revenue stream: Dowa runs Japan’s largest zinc smelter and has been searching for new sources of the mineral.

American Pacific expects to have about $12 million on hand — in the ballpark of one year’s work at Palmer. It’s touting the transaction as a good deal for its shareholders, because it will get full control of the project plus $10 million in cash.

In exchange, Dowa will have the option to acquire up to half of the zinc concentrate produced by a future Palmer mine, American Pacific’s announcement said.

A spokesperson for American Pacific declined to comment. Dowa could not be reached for comment.

The deal came about because the two companies had different objectives, American Pacific executives said in a video presentation this week.

Dowa, the executives said, was mainly focused on supplying its smelting operations in Japan and was eager to move the project past the study phase.

American Pacific, they added, wanted to spend more time doing exploratory work that could lead to a bigger, more lucrative project once it’s built.

“Dowa really wanted to push this toward production,” said Warwick Smith, American Pacific’s chief executive.

His company, he added, thought the project “could become much, much larger.”

Palmer is still years away from becoming an operating mine; the economics of commercially mining its deposits have not yet been analyzed in depth, beyond a preliminary assessment published in 2019. While mining projects are still in exploration, it’s common for them to change hands, or for major investors to pull out and new ones to replace them, according to industry experts.

The project sits near a glacier above a tributary of the Chilkat River — a major salmon-bearing waterway upstream from Haines and the Tlingit village of Klukwan. And for years, it has generated intense debate — and litigation — in the watershed.

The area, with about 2,500 people, is known for its politically engaged and polarized citizenry, as well as stunning scenery at the northern end of the Inside Passage. Some residents support natural resource extraction; others fiercely oppose the Palmer Project.

Tensions around the development have spilled into recent disputes over millions of dollars worth of municipal infrastructure projects, including work on a road that provides access to the Palmer site and a dock that some residents say could aid the project.

The Palmer claims have been studied for their mineral potential for decades.

Dowa struck its first agreement to participate in the project’s development in 2013 and took a majority stake in 2021.

Initially, Dowa’s involvement was seen by some observers as a boost for Palmer. The company appeared eager for ore concentrate to feed its zinc smelter in Japan, and it had cash reserves to support development work like helicopter-supported drilling and construction of a worker camp.

“Every year the project continues to get financed and ownership gets more consolidated, it does become more likely to happen,” Jim Kuipers, a Montana-based mining consultant who was hired by an environmental group to analyze Palmer, told the local newspaper, the Chilkat Valley News, in 2021.

Since then, Dowa has poured tens of millions of dollars into the project, including some $14 million in the past two years, according to an American Pacific filing with Canadian securities regulators.

In May 2023, an executive at Dowa Metals and Mining’s parent company said the firm was “enthusiastic” about moving ahead with exploration at Palmer, according to the transcript of a corporate strategy briefing.

Gershon Cohen, a 40-year Haines resident who’s fought Palmer for years, said the company’s exit raises more questions than it answers.

“It is shocking, to say the least, that they would be walking away from all that investment,” Cohen said. “It really begs the question: Why?”

In a prepared statement, Cohen’s advocacy group, Alaska Clean Water Advocacy, cited American Pacific’s small size and limited cash reserves and said the company has “one year to find a new major investor to replace Dowa.”

Richard Clement, a Haines Borough Assembly member, said he wasn’t especially surprised by the change in ownership.

“Resource exploration is risky business, and not all companies are willing to take a lot of risk,” said Clement, who has worked in resource development. “It’s very common for their ownership to be traded dramatically in the exploration phase. So, it’s really not a big surprise to see a change in who’s funding the project right now.”

Northern Journal contributor Max Graham can be reached at max@northernjournal.com. He’s interested in any and all mining related stories, as well as introductory meetings with people in and around the industry.

This article was originally published in Northern Journal, a newsletter from Nathaniel Herz. Subscribe at this link.

Alaska’s next hard-rock mine might not produce silver or copper, but antimony: a little-known mineral that’s an essential ingredient in modern weapons and energy infrastructure.

Despite its widespread use in missiles, flame retardants, and solar panels, no mines in the U.S. currently produce antimony.

China is the world’s primary producer and the United States’ biggest supplier, as it is for many other key industrial minerals. But it set new limits on antimony exports in September, citing national security concerns.

Now, eyeing funds available from the U.S. Department of Defense, two publicly traded Australian companies hope to open what they describe as small antimony mines in Alaska within the next few years.

“Antimony is a special beast. It’s national security. It’s a strategic metal for the United States,” said Joseph Webb, executive director of one of those companies, Felix Gold.

China’s restrictions are unsettling U.S. officials at a time when demand has soared. Antimony-laden arms are flowing to Ukraine and Israel, and businesses are manufacturing more and more solar panels, including some with antimony. The mineral hit record high prices in September.

That rise in demand, coupled with a strain on supply, has boosted mining companies’ interest in Alaska as a place to produce it. America’s antimony resources are concentrated in just four states, according to federal data, and Alaska holds several significant deposits.

“We think Alaska is going to play an important role,” Webb said.

The buzz around Alaska’s potential to supply the country with this seemingly obscure yet widely used element underscores how the state’s mining industry is looking to capitalize on increased demand, and government support, for domestic mineral production.

China is currently the dominant global producer of numerous essential minerals, and U.S. policymakers have been pushing for more diverse supplies amid increasing political tensions with the Asian nation.

Alaska could be a source of many of those materials, government geologists and industry leaders say. It’s thought to hold deposits of 49 of the 50 minerals, like antimony, that the U.S. Geological Survey considers “critical” to the American economy and national security.

Webb’s company, as its name implies, has been largely focused on finding gold, which is not on the geological survey’s “critical minerals” list. But the company announced this fall that it could also start commercially mining antimony at its Treasure Creek site near Fairbanks as early as next year.

Meanwhile, another Australian company that’s also mostly targeting gold, Nova Minerals, says it discovered antimony at an exploration project on state land across Cook Inlet from Anchorage. It’s now looking at the possibility of extracting and even refining the mineral there.

And U.S. Antimony, an American company that operates the country’s only antimony smelter, recently staked nearly 4,000 acres of claims around a World War I-era antimony mine in Alaska’s Iinterior, some 20 miles southwest of Tok.

The company’s refinery, in Montana, is running at only 50% capacity, according to co-chief executive Gary Evans.

“We could use material yesterday,” Evans said on a recent call with investors.

Like Nova and Felix, U.S. Antimony is also looking to the federal government for support.

Though the Pentagon has not yet subsidized any Alaska antimony projects, it has invested directly in other projects targeting “critical minerals.” If awarded money, Nova or Felix would become the second company in Alaska in two years to receive Defense Department dollars intended to boost mining in the state.

The Pentagon last year announced a $37.5 million grant for Graphite One, a Canadian company that hopes to mine America’s largest known deposit of graphite, on the Seward Peninsula north of Nome. Like for antimony, the U.S. has heavily relied on China for graphite, a key component of electric vehicle batteries.

Defense Department officials have also directed some $75 million to a proposed antimony and gold mine in Idaho.

Antimony is a shiny silver metalloid, an element that’s almost but not quite a metal.

It’s often used to harden and strengthen actual metals, like lead. And though it’s best known for its use in ammunition and flame retardants, it’s also in a long list of other products, including smartphones and batteries.

A significant fraction of the country’s antimony supply, about one-fifth, comes from recycling. But the vast majority is imported: Nearly two-thirds of the antimony consumed in the U.S. between 2019 and 2022 came from China, according to the geological survey.

China’s new export limits “will put a real squeeze on the U.S. and European militaries,” an analyst told Reuters in August.

Until the 1980s, the U.S. was a major antimony producer. Production tended to ramp up during times of war — including, at various points, at some 25 sites across Alaska, from Ketchikan in the southern end of the state to the Brooks Range in the Arctic.

During World War II, the Stampede Mine, located in what’s now Denali National Park, accounted for three-fourths of the country’s antimony production, according to a white paper prepared this fall by the Alaska Department of Natural Resources.

“It’s all over the place,” said Dave Szumigala, the state geologist who wrote the white paper. “I’ve probably been at over 60 prospects where I’ve picked up a chunk of antimony.”

Still, Szumigala said it’s an open question if the state’s deposits are substantial enough for modern day companies to mine them profitably. Doing business in Alaska can be more costly than in other states because deposits are often in remote areas and lack road access and other infrastructure.

The state’s white paper says near-term production of antimony in Alaska is “unlikely” due to long lead times and other obstacles.

One of the state’s largest known antimony reserves that’s not bound up in a national park is at the historic Scrafford Mine near Fairbanks, Szumigala said.

Scrafford is one of two dormant antimony mines encompassed by Felix Gold’s Treasure Creek project, which spans about 45 square miles.

That project is generating some local opposition, in part because mining could occur within a few miles of a Fairbanks-area subdivision.

“I would argue that developing a mine — whether it’s for gold or antimony — right across the road from a neighborhood is a pretty inappropriate area,” said Katie McClellan, who works with a Fairbanks-based conservation group, Northern Alaska Environmental Center. “We would not be in support of that kind of development.”

McClellan also said she’s concerned that federal funding intended for antimony production could have a side effect of advancing Felix Gold toward larger-scale mining for gold.

“Antimony is kind of the foot in the door,” she said.

Both Felix and Nova Minerals, the company with the project outside Anchorage, have mostly been focused on gold. Antimony is often found near gold, and both companies have recently started promoting their antimony prospects as well, with the market surging and government interest growing.

They are now pitching stand-alone antimony mines separate from any major gold mining that could occur on their claims later on.

That concept is distinct from the Pentagon-subsidized Stibnite project in Idaho. The development, which could cost as much as $1.8 billion, would be a big gold mine that also would target antimony — though active commercial production there is still several years away.

Nova Minerals’ concept at its Estelle project, on state land at the end of the proposed 100-mile West Susitna access road, is an antimony mine with a much smaller size and associated investment.

“Everything is much smaller,” Christopher Gerteisen, the company’s chief executive, said in an interview.

Initial startup costs could be as low as $25 million, and the company could begin production within 18 months of receiving a grant, Gerteisen said. Nova is still waiting for a funding decision from the Defense Department.

An agency spokesperson declined to comment.

Felix Gold announced recently that it could begin antimony production by the end of 2025. That “ambitious” target could be possible, said Webb, its director, because Felix has historical data from the dormant mine and is anticipating a very small-scale operation.

“Ultimately, we’ll need to go through the due process required by the regulatory bodies to ensure we’re taking every appropriate step through this,” he said.

Northern Journal contributor Max Graham can be reached at max@northernjournal.com. He’s interested in any and all mining related stories, as well as introductory meetings with people in and around the industry.

This article was originally published in Northern Journal, a newsletter from Nathaniel Herz. Subscribe at this link.

President-elect Donald Trump’s announcement Friday afternoon that his pick for Interior secretary, North Dakota Gov. Doug Burgum, would also coordinate a new council on energy policy is a sign the incoming administration will make energy production a core part of its domestic policy.

Few details of the new National Energy Council were available Friday, as activists and lawmakers processed the surprise 4 p.m. Eastern announcement. But the move likely reflects a focus by Trump and his next administration on energy production, including fossil fuels.

“They’re signaling ahead of time that this is one of their priority areas,” Frank Maisano, a senior principal at the energy-focused law and lobbyist firm Bracewell LLP, said in an interview.

Burgum “will be joining my Administration as both Secretary of the Interior and, as Chairman of the newly formed, and very important, National Energy Council, which will consist of all Departments and Agencies involved in the permitting, production, generation, distribution, regulation, transportation, of ALL forms of American Energy,” a written statement from Trump said.

“This Council will oversee the path to U.S. ENERGY DOMINANCE by cutting red tape, enhancing private sector investments across all sectors of the Economy, and by focusing on INNOVATION over longstanding, but totally unnecessary, regulation.”

Trump said the council’s objective to increase U.S. energy supply would benefit the domestic economy and allies overseas and help power “A.I. superiority.”

“The National Energy Council will foster an unprecedented level of coordination among federal agencies to advance American energy,” Burgum said in a written statement. “By establishing U.S. energy dominance, we can jumpstart our economy, drive down costs for consumers and generate billions in revenue to help reduce our deficit.”

It was unclear what the role of the Department of Energy would be in such an arrangement. The current secretary in the Biden administration is Jennifer Granholm, a former governor of Michigan.

‘Drill, drill, drill’

Throughout the presidential campaign, Trump frequently pledged to expand oil and gas production. The issue was one of two he told Fox News host Sean Hannity he would seek to address as a “dictator” on the first day of his administration.

Trump told Hannity during an Iowa appearance in December that he would not be a dictator, “except for day one. I want to close the border, and I want to drill, drill, drill.”

Comments like that foreshadowed something like a new council to oversee energy policy, said Lisa Frank, executive director of the advocacy group Environment America.

“President Trump has been very clear that one of his top priorities is to ‘drill, baby, drill,’” Frank said. “I’m not surprised. It was such an important part of his campaign, and it is the case that energy decisions are made by all sorts of different agencies in different ways, and that can be kind of a difficult thing to manage if you’re trying to drive an agenda.”

Under outgoing President Joe Biden, the administration promoted an “all-of-government approach” to climate change, with several departments and agencies across the federal bureaucracy tasked with addressing the issue. White House National Climate Advisor Ali Zaidi was tasked with coordinating a consistent climate approach across the executive branch.

Burgum’s role could be similar, though the aim likely will be much different.

“This is similar to what the previous administration did, but the previous administration focused on climate,” Maisano said. “It’s just energy instead of climate.”

Another key difference is that Burgum will also be tasked with running an entire, separate Cabinet-level department with a nearly $18 billion annual budget.

Balancing the priorities of the Interior Department — which includes public lands management, protecting endangered species, maintaining national parks and overseeing tribal relations — with an initiative to vastly expand fossil-fuel production could be difficult, Frank said.

“The really tough decisions about balancing those two agendas will lie, to some extent, with Secretary Burgum, if he’s confirmed,” she said. “Do we want more drilling at our national parks? Do we want it on our families’ ranches? Do we want it where you want your kids to hunt? Do we want fracking near the best trout streams? Those are going to be very difficult questions for both him and the American public.”

All of the above

Burgum is seen across the political spectrum as favoring an all-of-the-above approach to energy, meaning he wants to expand both fossil-fuel and sustainable-energy sources. Environmental groups see his record on climate as mixed.

His state ranks ninth in wind-energy production, Frank said, but also last in reducing carbon emissions over the last two decades.

“He’s familiar with all aspects of energy, because as governor of an all-of-the-above energy state, he has to be,” Maisano said.

Some Democrats and left-leaning groups voiced immediate opposition to the selection of Burgum. The U.S. House Natural Resources Committee Democrats sent a series of tweets Friday dubbing the governor “Big Oil Burgum” over ties to the oil and gas industry.

But others were more tempered in their reaction to Burgum’s selection as Interior chief than some of Trump’s other picks for Cabinet positions.

Patrick Donnelly, the Great Basin director for the environmental group Center for Biological Diversity, tweeted Thursday evening that it did not seem likely the Trump administration would roll back expansion of renewable energy.

Trump’s first term saw an expansion of clean-energy projects, Donnelly wrote. Burgum is “not a climate denier” who doesn’t have a record of stifling renewable energy, he added.

“Burgum sucks but he’s not a complete lunatic that I’m aware of,” Donnelly said in an earlier tweet. “Could have been worse.”

This article was published by Alaska Beacon and is republished here with permission.