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Ambler mine, road projects dependent on each other

Yereth RosenAlaska Dispatch News
The Bettles Lodge ilya_ktsn / cc via flickr

If you build it, they will mine. And if you mine, they will build it. That is the theory -- and the difficulty -- behind ambitions for road-accessible commercial copper mining in a remote corner of Arctic Alaska.

For the Vancouver-based company pursuing a copper mine in the Ambler Mining District of Northwest Alaska, the region’s rich mineral resources alone do not justify full development. There must be, in addition to the high concentrations of copper found at the site, a road providing a link to Alaska’s highway system, said an official with NovaCopper Inc., the company spun off last year from parent NovaGold Resources Inc. to pursue the Upper Kobuk Mineral Projects. 

“If we don’t have a road, we don’t have a project. It’s that critical,” said Patrick Donnelly, NovaCopper's vice president for corporate communications.

For Alaska officials pursuing Gov. Sean Parnell's Roads to Resources strategy for new highways into oil- or minerals-rich wilderness, there is no point to an Ambler district road -- expected to cost $2 million a mile -- unless a major mine is at the end of it.

A gravel route for industrial use only is what's envisioned. Users would pay toll fees so the state is off the hook for expenses beyond planning and permitting, said a spokesman for the Alaska Industrial Development and Export Authority, the economic-development agency overseeing the project.

“AIDEA will seek private entities to construct, operate and maintain the road,” said spokesman Karsten Rodvik. Though there is no commitment for a road or a mine, NovaCopper and AIDEA are linked by a memorandum of understanding to prepare for each. 

Opposition in Bettles

But the idea of a new mine and a new 220-mile road to it from the Dalton Highway has raised hackles of some residents along the proposed route. The city council in Bettles, a tiny Brooks Range village, passed a resolution opposing the road.

“We've been told that the push for roads to resources will benefit the state of Alaska. In this instance, all it's really doing is trading away our incomparable and irreplaceable resources to a group of private investors and a Canadian mining company,” Bettles Mayor DaleLynn Gardner said in an email Tuesday.

For NovaCopper, the prize at the end of the potential road is a rich deposit of copper and other marketable metals. The size of the deposit is still being determined, but Ambler is much smaller than the Pebble deposit in Southwest Alaska that has been the subject of international controversy. Ambler may have only about an eighth of Pebble's resources, but Ambler’s ore has far higher concentrations of copper than Pebble, meaning “a very small footprint,” Donnelly said.

There is no big commercial salmon fishery nearby, as is the case with the Bristol Bay fishing industry and Pebble, he said. There is, for now, no need for a larger investment partner, he said. That contrasts with Pebble, where Canadian's Northern Dynasty Minerals Ltd. found -- and then lost -- a partner in Anglo American, an international mining industry giant with the deep pockets needed to make such a huge project feasible.

Another advantage over Pebble: a positive relationship with NANA Corp., the regional for-profit corporation owned by the Iñupiat people of Northwestern Alaska. While Bristol Bay’s Native regional corporation adamantly opposes Pebble, NANA has struck a lease-option deal with NovaCopper that could result in a full joint venture. The arrangement could wind up similar to NANA’s lucrative deal with Cominco, now known as Teck, for developing and operating of the huge Red Dog Mine, the world’s largest zinc producer, located 200 miles west of the Ambler district.

Benefits have already ensued, including a high percentage of shareholder employment in exploration operations, a committee to protect subsistence resources and regional scholarships, said Lance Miller, NANA’s vice president for natural resources.

Hoping to make $1 million of a $1 billion investment?

But one prominent critic claims benefits of the road and mine would not spread far beyond NovaCopper and NANA.

“We’re in the position of taking all of the environmental damage with none of the economic benefits,” said John Gaedeke, a lodge owner and founder of the Brooks Range Council, a group opposing the road.

Gaedeke, whose lodge is east of the Ambler district at Iniakuk Lake, where his family homesteaded, said the issue demonstrates the over-eagerness of Alaska politicians to land megaprojects without penciling out financial returns to the state treasury. He cites Alaska's low take from mining -- a net-profits tax rate that tops out at 7 percent and royalties, if applicable, of no more than 3 percent of the net. “It seems like the state is hoping to make a million dollars off of a billion dollars of infrastructure,” he said.

Will caribou be harmed?

In Bettles, there are worries about road impacts to migrating caribou, to Gates of the Arctic National Park and Preserve (where a crossing is nearly guaranteed under a provision in the Alaska National Interest Lands Conservation Act) and to the village’s tourist economy. “Tourists to Bettles pay top dollar to experience a remote Alaskan bush village and visit the surrounding wilderness. They will not spend thousands of dollars to see open pit mines and ore trucks rumbling by,” Gardner said.

A mine poses separate risks if development results, said Jill Yordy of the Northern Alaska Environmental Center. It threatens to unleash torrents of acid-rock drainage, plus other problems, she said. The area is so laden with natural asbestos that one geographic feature, rising to 2,129 feet, is named Asbestos Mountain. “How are you going to mitigate the health hazards for truckers, for miners and for people along the road?” Yordy said.

Project proponents, however, say they are getting a good reception in other areas along the route, with many residents seeing potential benefits.

The road could help diversify the region’s economy and reduce the region's high costs of living, particular energy costs, Rodvik said.

An anchor customer for North Slope LNG?

Donnelly said NovaCopper could use the road to access liquefied natural gas (LNG) trucked down from the North Slope, making the mine an anchor customer for a much-desired project to commercialize Alaska’s long-stranded Arctic natural gas reserves.

He said he understands how Alaskans, like other northerners, are leery of new roads. A similar project planned in Nunavut, Canada, has also been met with a guarded reception by locals there, he said. 

Still, Alaskans could learn from other Canadian experiences, such as the decades-old mining economy in Manitoba’s Flin Flon region, Donnelly said. Road access to the Ambler area could create a similar economic legacy, he said. 

“Having a road there would open up a whole new mining district, and I would go so far to say, a world-class mining district,” he said.

Contact Yereth Rosen at yereth(at)alaskadispatch.com