Opinions

A good job solves a lot of problems

Helvi Sandvik, CEO at NANA Development Corp., is fond of saying the best antidote to a social problem is a job. Sandvik is most often referring to good jobs in her region of Northwest Alaska created by the Red Dog Mine, the large lead-zinc mine 90 miles north of Kotzebue operated by Teck, the mining company, in  partnership with NANA Regional Corp.

NANA is the Alaska Native regional corporation and the landowner, and NANA Development, which Sandvik heads, is the business subsidiary that supports mine operations as well as other NANA enterprises.

While the regional corporation owns the land and receives 30 percent of the mine profits, 70 percent of those are shared with other Native regional and village corporations under terms of the Alaska Native Claims Settlement Act of 1971 (the actual percent is about 60 percent because NANA gets a share back).

Red Dog's importance to the region is more than being a source of profit-sharing. In 2013, the mine resulted in 710 jobs in villages in the Northwest region, direct and indirect, as well as $65 million in wages. That's according to a study by McDowell Group, the consulting firm. The mine jobs pay well, an average of $99,000 a year.

[Red Dog Mine, Northwest Arctic Borough to enter talks over tax dispute]

An interesting side-effect is that the mine has stimulated interest in education, careers and jobs among young people in the region and sharply boosted high school graduation rates. Those went from 25 percent in the 1980s, before the mine was built, to about 65 percent now, not far below Anchorage's 75 percent.

It's long been known that when young people visualize a future for themselves they get interested in acquiring skills to achieve it.

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This is spelled out in a paper published last spring by Bob Loeffler, professor with the University of Alaska Anchorage's Institute of Social and Economic Research, in the Economic Development Journal.

NANA's experience with Red Dog is instructive because another rural Alaska region, the Yukon-Kuskokwim Delta area in Western Alaska, may see a similar development with a large gold mine at Donlin Creek, in the mid-Kuskokwim River region.

If it is built, Donlin Gold would create hundreds of high-paying jobs in what is now one of Alaska's most economically distressed areas.

Just as NANA is landowner at Red Dog, the lands at Donlin Creek are owned by Calista Corp., the Native regional corporation for the Y-K Delta and The Kuskokwim Corp., a consortium of village corporations on the Kuskokwim.

Calista owns the subsurface rights and will receive mining royalties (shared with other Native corporations) while TKC owns the surface lands. Both entities are expected to operate businesses that will support mine operations, as NANA does today at Red Dog.

[Donlin Gold project promises economic boost with environmental safeguards]

Donlin Gold is now at an advanced stage of its permitting, and a construction decision by Barrick Gold and NovaGold Resources, the mining companies, is still a few years away.

The benefits of the project for the state, and particularly the Y-K region, would be significant. The mine will cost over $6 billion to build and would include a 315-mile, 14-inch natural gas pipeline built from Cook Inlet, bringing a new source of energy to the region.

Construction would take about four years with 2,500 employed at its peak. Mine operations would require 1,000 workers. Many operations workers will come from the local region because this is a surface mine and many local residents already have skills needed, such as heavy equipment operation.

It's premature to begin actual training but the mining company, Calista and TKC are already promoting programs for career-awareness in schools and Calista sponsors training for jobs within its subsidiaries, which include construction firms requiring skills similar to what the mine will need.

Red Dog Mine has now been operating for 25 years and it offers a working model for Calista, TKC and Donlin Gold. Teck and NANA offer scholarships and apprenticeships as well as  "job-shadowing," where young people spend time alongside experienced workers, watching what they do.

Young peoples' interest in jobs is not all mine-related either, Loeffler writes. Just having a large private employer in the region, and the possibility of jobs, is what provides the stimulus, he says. There are other jobs in the region too, thanks to the economic benefits of the mine.

A 2001 employment survey in the NANA region found 26 percent of the people in 10 villages in the region had worked at Red Dog at some point, and another 18 percent were interested. The effect of this in stimulating conversation at home is bound to rub off on young people.

An intangible effect of Red Dog is in teaching work culture to young people. Loeffler writes: "In one telling example, a school district official told the author (Loeffler), 'You know what the mine does that no one else does in this area? They fire people.' To which another official responded, 'You mean, like your son?' The original official said, 'Yes. He was fired twice from Red Dog. And now he gets it."

Donlin Gold had a similar effect in teaching work culture when the company was in its exploration phase and had hired substantial numbers of local people. Initially the turnover rate was very high because of alcohol and drug-related problems.

Calista and the mining company got busy with community meetings and outreach efforts to drive home the zero-tolerance for alcohol and drugs at the work site. Those were good jobs, and the message hit home. The result was a sharp drop in alcohol and drug problems, and job turnover at the mine.

Helvi Sandvik hits the nail on the head: A good job solves a lot of problems.

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Tim Bradner is co-publisher of the Alaska Legislative Digest and is editor of Alaska Inc., a quarterly business magazine.

The views expressed here are the writer's and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary@alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com or click here to submit via any web browser.

 
 
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