Gov. Bill Walker this year told the Fairbanks Daily News Miner that he intends to continue funding for the Ambler road project. Though it is understandable the governor is interested in stimulating economic development in Alaska, this project is a dubious use of precious state funds.
Funding depends on legislative approval of the governor's budget. The proposed 211- to 222-mile road would connect the Ambler Mining District in the foothills of the Brooks Range to the Dalton Highway, about 400 miles north of Fairbanks. The Alaska Industrial Development and Export Authority (AIDEA), a state-owned corporation, submitted applications to federal agencies for permits to build the road for mining interests. The state has authorized AIDEA to spend $3.6 million to begin the environmental impact statement for the proposed road without assurance of investors or economically viable mines. The process is backward in terms of timing. Mining plans should be submitted first, then a road considered. The state has spent $22 million on studies for the road.
There is no guarantee the state would recoup its costs if the road is built. AIDEA would seek lenders to finance building the road and recover costs through toll fees over about 50 years of development and mining. If there were no mining during a particular time period, there would be no income and the state would still have to repay any loans secured for the project. The mining companies may not have to put up any collateral. The venture to create the Alaska Seafood International project is an example of a failed state megaproject that no one wants to see repeated.
This road would cross 2,900 streams, 11 large rivers requiring bridges, and an estimated 1,794 acres of wetlands requiring substantial fill. Costs are estimated at $200 million for the initial exploratory road to just under $500 million to construct the final 2-lane private industrial road. With operating costs, AIDEA estimates $845 million to $906 million over the first 30 years; and this would surely surpass $1 billion over 50 years. This only considers the access road, and not the full cost of transport to market. Non-affiliated engineers estimate the project would cost much more, especially if built to the two-lane width with specifications for heavy ore trucks.
The primary mining interest is Trilogy Metals, an exploration company headquartered in Vancouver, British Columbia. Trilogy Metals is a spinoff from NovaCopper, which was related to NovaGold, the company behind the failed Rock Creek mine near Nome. Trilogy's total net assets on Nov. 20, 2017, were about $40.3 million. Without involvement of a major mining interest and other investors, it appears this company cannot afford to develop such a large project, much less pay back the costs of the road or provide adequate collateral to avoid the state becoming responsible for debt. A complete mine feasibility plan with estimated revenue flows is paramount before the state commits further funds.
The Ambler Mining District has been explored for decades to evaluate its potential for copper, gold, lead, silver and, recently, cobalt. Though some rich copper has been intersected by drilling, there is no indication that deposits have the continuity and density that would make for viable mines.
In addition to no well-defined ore body, development of this mining district has been difficult since its discovery due to its remoteness. If built, this road would cut through pristine wild country with myriad scenery, wildlife and fish values, including salmon and sheefish in the wild Kobuk and Alatna rivers, a substantial portion of habitat for the Western Arctic Caribou Herd, the largest such herd left in the U.S., and important subsistence and cultural/archeological areas in the Central Brooks Range. Some local rural residents want jobs in the Ambler Mining District, but many communities have formally stated their opposition to the road, fearing it would ruin their subsistence resources and create much more competition. Studies have shown that roads interfere with caribou migration. The gravel sources and mine area contain naturally occurring asbestos, a severe human health hazard. Mining, construction and travel on the road could cause serious health impacts to workers and the public.
[Cost estimate drops for Arctic mining prospect]
The road is proposed to be for industrial use only, but such was the promise for the Dalton Highway to Prudhoe Bay too; however, this did not last. BLM and the state may not have the authority to prohibit public access if state and federal funds are used.
The Ambler Road would be a complete game-changer for the area. There are pros and cons to the project, but Alaskans should seriously question the financial and environmental advisability of this proposed road. The current process is putting a lot of money in the cart before the horse.
Bud Rice, from Eagle River, is a retired park ranger who has worked in several national parks in Alaska and the Alaska Regional Office starting in 1976. He represented the National Park Service at multiagency meetings addressing the Exxon Valdez oil spill, Red Dog Mine, Pebble mine proposal, research on airborne contaminants, and climate change scenarios. Kendra Zamzow has a Ph.D. in environmental chemistry and has spent 10 years assisting tribes and grassroots groups on the environmental risks of mining projects throughout Alaska and Canada. She lives in Chickaloon.
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