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Natural Resources are Foundation of the State’s Private Sector Economy

Mining industry health impacts Alaska’s other resource development industries


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Alaska is one-fifth the size of the rest of the United States, with more coastline than all other states combined. This state contains immense natural resources, including minerals and offshore resources like oil and gas and seafood.

Alaska’s natural resource industries provide jobs, revenues to the state, and are the foundation of the private sector economy. After all, our constitution, Article XIII, section 2, mandates that Alaska “encourage the settlement of its land and the development of its resources by making them available for maximum use consistent with the public interest.”

It is because of these natural resources that Alaska became a state in the first place. During the fight for Statehood, William A. Egan remarked in his 1956 speech at the Alaska Constitutional Convention: “Many of the states now in the Union would be happy indeed, if they could be endowed with Alaska’s natural resources. Even though our resources are in their present state of underdevelopment, mainly because of the federal territorial-status yoke, our economy is amply able to support statehood.”

But enough about Alaska’s responsibility to be self-reliant and avoid becoming a burden on the federal government; let’s talk about mining and the important role the industry has had in Alaska for more than one hundred years and will continue to have for decades to come.

Alaska has a very rich history in mining, but currently only has six large producing mines. If it were its own country, Alaska would rank in the top ten for each of the following resources: coal, copper, lead, gold, zinc, and silver. Alaska’s minerals, much like the seafood it exports, are highly valuable and could be marketable around the world.

 

Historic Cornerstone

Historically, mining has been a cornerstone of Alaska’s economy. Many roads, docks, and other infrastructure throughout Alaska were originally constructed to serve the mining industry. Major communities like Fairbanks, Juneau, and Nome were founded on mining activity.

Mining in Alaska covers all facets of the industry from exploration to mine development, production, and ultimately reclamation. The industry produces zinc, lead, copper, gold, silver, and coal, as well as construction minerals such as sand, gravel, and rock.

In addition to family wage jobs, mining creates public revenue by paying state and local taxes. Mines help support local economies in both urban and rural Alaska, and in some communities mining companies serve as the largest taxpayers.

Worldwide interest in Alaska’s mineral potential continues to increase, but overall investment in exploration is down. However, worldwide consumption of mined materials is not down and is only expected to increase with the continued demand for electronics, renewable energy components, and high-efficiency vehicles.

What many people don’t understand is the relationship between mining and renewable energy. Mining is critical to renewable energy products, providing many of the required elements for wind turbines, solar panels, and cars. The raw materials necessary are in the ground. If we are going to build infrastructure and renewables, we need mining.

There are many issues facing exploration and development, including access, high energy costs, federal and state policy, and the natural environment. The high cost of energy and the lack of energy sources available is an important challenge facing projects in Alaska.

 

Industry Connections

The health of the mining industry impacts Alaska’s other resource development industries. For example, oil and gas exploration and development needs mined materials such as copper, sand, and gravel.

The fishing industry consumes mined materials for vessels, mined resources for energy, and advanced technology built from mined materials to keep seafood cold to be transported all over the world.

Tourism relies on mined products for everything from infrastructure to the copper in a cell phone used for posting a beautiful Alaska photo on social media.

What remains of a once vibrant forestry industry still requires mined metals to responsibly harvest timber for products in a renewable industry.

These mined materials, which will be used to advance responsible resource development across Alaska and to build renewable energy products, are going to come from somewhere—why not here?

Alaska has a proven record of high standards in responsibly developing natural resources, protecting the environment, promoting jobs, and growing Alaska’s economy.

 

 

This article first appeared in the November 2016 print edition of Alaska Business Monthly.

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