Project leads Red Dog mine production to a record

By investing $6 million to add new staff and consultants to help with the project, the zinc and lead mine increased profits last year by $34 million, said John Egan, operating manager for Red Dog, the largest mine in Alaska.

The project, which isn't over yet, has comprised hundreds of little fixes at the mine rather than "one silver bullet," he said.

Last year, the mine added 14 workers who worked exclusively on improving the mine's productivity. Red Dog is keeping on six additional workers dedicated to the project this year, with a goal of increasing the mine's profitability by another $16 million, Egan said.

The Red Dog project mostly involved simple solutions to make things run smoother: new equipment for speedier removal of snow and ice that clogs ore feeders at the mine's giant mill; replacing parts before they break down; and ordering products in bulk rather than single orders, to name a few.

The project kicked off in September 2008 and mine productivity started soaring in January 2009. "(It) was the best January we ever had," Egan said. Production also hit monthly records in April, October and December, he said.

The mine shipped 1.02 million metric tons of zinc concentrate last year, compared with 920,000 tons of zinc concentrate in the prior year.

Red Dog's operating profit last year was $381 million, also up significantly from a year earlier, according to Teck Resources, a Vancouver, British Columbia, company that owns the mine. The operating profit doesn't include deductions made for taxes and certain other expenses.

Last year, Teck said it distributed $144 million to the state and NANA Regional Corp., the Kotzebue Native corporation that owns the land that the mine sits on. That's a $32 million increase from the prior year. NANA shares its royalties with other Native corporations.

The increase in production and profits at Red Dog last year wasn't exclusively due to the improvements project. Output was down for part of 2008 because of a series of equipment failures, Teck said.

Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.