New US climate law could lead to a mining ‘renaissance’ in Alaska, drawing excitement and concern

This spring, a small Australian prospecting company sent geologists to a state warehouse to scour old rock collections.

The geologists leveled handheld scanners over samples of rock pulled from shelves at the Alaska Geologic Materials Center in Anchorage, drilled in the Cantwell area decades earlier by other mining companies.

They found what Discovery Alaska described to shareholders as the “widespread presence” of lithium, the mineral used in rechargeable, lithium-ion batteries for everything from iPhones to electric vehicles.

Whether the lithium can be profitably extracted won’t be known for a while, said Jerko Zuvela, the company’s director. “A lot more exploration needs to be done,” he said.

But the hunt for the mineral highlights the world’s growing interest in the so-called critical minerals used in the solar panels, wind turbines and electric vehicles that increasingly power the global economy.

The nation’s recently passed $370 billion climate law, called the Inflation Reduction Act, is ramping up that interest in Alaska, and focusing attention on the state’s mining prospects as a possible source for many of those minerals.

The law, passed last month without Republican votes, provides tax breaks that industry observers say could lead to more mining in the U.S., and Alaska. They include a 10% tax write-off of operational costs for U.S. companies producing critical minerals.

Brett Watson with the University of Alaska Anchorage’s Institute of Social and Economic Research said the new law could potentially bring a “renaissance” to Alaska mining.

But that is only if the state can overcome the many hurdles that often slow or stop mining projects, including a lack of roads and ports, high energy and development costs, and exploration and construction timelines that can take 20 years.

“We have the rocks here in Alaska, but the question is whether or not we can capitalize on the opportunity,” he said.

Opposition to mining proposals from people in the region or environmental groups is also a factor. While conservation groups on a national level celebrated the climate law as a huge victory, they are concerned about what it could mean for Alaska.

“A short-sighted chase for critical minerals in the name of climate change is not an excuse to rush to build mines everywhere, with reduced oversight and less public engagement,” said Rachel James, public lands and water lead for SalmonState.

“If there is to be an increase in mining in Alaska, it needs to be done in a way where Alaskans are in the lead, and our rules and regulations reflect the fact we live much closer to our lands and waters than almost anyone, anywhere,” she said. “As part of the decision-making process, some places will be identified as inappropriate for large scale mining.”

Alaska leaders see opportunity

Since the act passed, Alaska political leaders have wasted no time arguing that mining in the state could help meet President Joe Biden’s goal of net-zero carbon emissions by 2050.

Specifically, the Biden-backed law encourages U.S. development of 50 minerals labeled as critical by the U.S. Geological Survey earlier this year. They’re considered vital economically and strategically, and at risk of supply disruption, with many controlled by China and other potentially adversarial countries.

The critical minerals in Alaska include the graphite and cobalt that join lithium and other minerals to make the lithium-ion batteries; the tin and indium used in touchscreen coatings so fingertips control apps; and zinc at Red Dog Mine, one of the world’s largest deposits of the metal, used to prevent rust in solar panels and wind turbines.

At a critical minerals conference at the University of Alaska Fairbanks last month, coincidentally held days after the climate law passed, Alaska politicians and others touted the state’s mineral attributes and what they described as unparalleled environmental oversight. They also pressed for streamlined federal permitting.

“If you care about the environment we need to produce resources in Alaska,” Gov. Mike Dunleavy said. “If you care about social justice, we need to produce resources here in Alaska. If you care about enriching people, and not dictators, we need to produce resources here in Alaska.”

Conservation groups weren’t on the summit’s agenda, but attended it. They’re concerned that the interest in more domestic minerals could lead to irresponsible mining. They’re calling for stronger mining laws.

Andrea Feniger, head of Sierra Club’s Alaska chapter, said she worries Alaska will be “sold out” for mining in the wake of the climate law.

“It’s exciting that the (Inflation Reduction Act) has tackled a lot of climate issues, but there’s a lot of scary possibilities in it for Alaska,” she said.

She said the U.S. should focus on making products more efficient and recycling renewable energy components and materials — also encouraged by tax credits in the law — to reduce reliance on new mines.

Mineral diversity in Alaska ‘outstrips’ most other states

Under the climate law, renewable energy could support the national economy by creating more opportunities in manufacturing, said Jane Nakano, a senior fellow at the Center for Strategic and International Studies.

She said the U.S. has a unique opportunity to make up China’s lead in critical minerals. It has the resources, mining experience, and the financial ability to increase mineral production, she said.

Perhaps two-thirds of the 50 critical minerals could be produced in Alaska, though much more needs to be known about their concentrations and other details, said Jamey Jones, with the U.S. Geological Survey’s Alaska Science Center in Anchorage.

“Alaska’s geology is incredibly diverse and the state is very large,” Jones said. “And what that translates to is a diversity of critical mineral resources that really outstrips most other states.”

In an ongoing effort to boost knowledge of Alaska’s critical minerals, the U.S. Geological Survey recently gave the state $7 million for new geological studies, part of last year’s bipartisan infrastructure law.

“The Last Frontier remains a frontier for critical mineral resource development,” said David Applegate, the agency’s director, at the critical minerals conference.

The studies will focus on more than a dozen critical minerals, including tin and indium geologists say is found across Alaska. Besides their use in touchscreens, indium is used in solar panels.

State geologists have also begun re-analyzing more than 40,000 samples of stream sediment for critical minerals, said Melanie Werdon, chief of Alaska’s mineral resources section.

One important prospect is Bokan Mountain, in the environmentally sensitive Tongass National Forest in Southeast Alaska. It contains critical minerals like neodymium and dysprosium, used in powerful magnets for large wind turbines. The minerals are also rare earth elements, which are often difficult to produce and primarily come from China.

In Northwest Alaska, the state also hosts the largest graphite prospect in the U.S., owned by Graphite One about 40 miles north of Nome.

Demand for graphite is surging as the market grows for rechargeable batteries. But it has not been produced in the U.S. since the 1950s, the U.S. Geological Survey says. Most comes from China.

Anthony Huston, head of Canadian-based Graphite One, said the tax incentives could help the company’s project, but details of the law are still being studied to better understand the potential benefit.

Graphite One hopes to create a U.S. supply chain for the anode portion of lithium-ion batteries, a major component of the battery.

The ore would be concentrated in Alaska and shipped to Washington, with its cheaper power costs for manufacturing, he said.

“This will allow the U.S. to become independent on the anode side,” he said. “This is huge.”

Controversial mining projects seek favor amid renewables push

Alaska contains large undeveloped amounts of copper, too, geologists say. It’s critical for renewable energy, too, conducting electricity in wires. But it’s not on the list of critical minerals because a lot is produced in the Lower 48.

Huge amounts of copper exist at the controversial Pebble deposit in Southwest Alaska’s Bristol Bay region, home to the world’s largest sockeye salmon fishery. The Pebble developer highlights copper as a key component in green technology, from electric vehicles to the wires connecting renewable energy projects.

But after decades of exploration, the prospect has failed to win federal support under multiple presidents, and continues to face strong resistance from conservation groups, local tribes and members of Alaska’s congressional delegations due to concerns the mine could harm the fishery.

Copper also exists elsewhere in Alaska, including in the mineral-rich Ambler Mining District in Northwest Alaska, geologists say. Mining company Ambler Metals is exploring copper at deposits in the region, in the Brooks Range foothills north of the village of Kobuk.

It’s also exploring the potential for producing zinc as well as cobalt, a critical mineral processed primarily in China and mined mainly in the Democratic Republic of Congo.

Ramzi Fawaz, chief executive of Ambler Metals, said the new law’s tax incentives can make the company’s projects more economical, if it can profitably produce the cobalt or zinc.

But the project also needs access from a 200-mile industrial road pursued by an Alaska state financing agency, the Alaska Industrial Development and Export Authority.

The road is controversial — it would cut across Northwest Alaska to open up the mineral district, and has drawn opposition out of concerns it would harm the environment and subsistence hunting.

After conservation groups and local tribal groups sued, the Biden administration has put permission for the road on hold for further environmental review.

The tax-write off alone doesn’t make the project viable, Fawaz said.

“If there is no Ambler Access project, there is no mine,” he said.

Daily News reporter Riley Rogerson contributed.