Study says state's mining reputation slipping

Posted: Sunday, March 02, 2003

ANCHORAGE (AP) -- Alaska's image as a place to explore for and develop minerals is slipping in the world mining industry, according to an annual survey presented to state lawmakers, commissioners and members of the Murkowski administration.

In a joint House and Senate Natural Resources Committee presentation on Feb. 19 and at a commissioners' and administration staff meeting the next day, Fairbanks-based consulting geologist and columnist Curt Freeman presented results of an annual mining industry survey conducted by the Fraser Institute, an economic think tank based in Vancouver, B.C.

Alaska's ranking in the survey of investment attractiveness slid from seventh in 2001 to 15th in 2002, out of 47 states, Canadian provinces and countries with mining activity throughout the world.

The Institute asked respondents the potential effects on exploration from taxation, environmental regulations, administration and duplication of regulations, uncertainty concerning Native land claims and protected areas, labor issues, infrastructure, socio-economic agreements and political stability.

In his presentation, Freeman said that four out of 10 companies surveyed reported strong deterrence from investing in Alaska's mineral industry because of the state's environmental policies, the state's land status and the lack of infrastructure.

Furthermore, one-quarter of the survey respondents said regulatory uncertainty and regulatory duplication were strong deterrents to mining exploration investment in Alaska.

''The timeline for when they will find out (permitting status) is another area companies are concerned about,'' Freeman said. ''They want the path to success or failure reduced. If their project is not going to make it, they want to find out sooner.''

Alaska's policy potential scored 50 points out of a possible 100, for a ranking of 23rd out of the 47 mining jurisdictions.

That 50 percent ranking for Alaska's policy potential index is ''not acceptable,'' said Tom Irwin, commissioner of the Department of Natural Resources, in an interview with Petroleum News Alaska. Formerly general manager of the Fort Knox gold mine near Fairbanks, Irwin said he has watched the Fraser survey results for years.

''People vote with their dollars -- they're spending exploration dollars somewhere else,'' Irwin said.

Irwin is optimistic that the state's reputation will soon change. ''Mining companies will soon realize and note the difference in how people relate to them in government,'' he said.

Some of these issues in Alaska's public policy reputation in the global mining industry have been outlined with recommended changes in an annual report produced by the 13-member Alaska Minerals Commission. Irwin was among the 11 industry representatives on the commission.

The report, released late in January, outlines seven specific recommendations for the governor and Legislature that would assist the state's mining industry.

The recommendations include: eliminating frivolous litigation by limiting ''public interest litigant'' status, increasing efficiency of mine project permitting, updating water quality standards, assisting in infrastructure development that benefits mining and other industries, resolving land tenure, navigability and right of way access issues, acquiring baseline geological and environmental knowledge statewide and promoting industry education.

''We have so much to offer in Alaska, and we can solve some of these problems, like a streamlined permitting process, building roads -- these are real priorities of the governor,'' Irwin said. ''We can really do something about this and we're going to do that.''

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