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Executive Summary

Mining permeates the history and popular image of Alaska in a way that no other industry matches. Placer gold exploration and mining began with the Russians in the early 1800s. After acquisition by the United States, exploration and mining continued and gradually increased for both hard rock and placer minerals. Employment in the mining industry peaked in 1916 at almost 8,600 workers, after which the industry began to decline as a result of mine disasters, fixed gold prices and global wars.

At statehood in 1959, the mining workforce had shrunk to one-fifth its peak level—to 1,700—and hovered near that number until a series of discoveries over the last several decades led to new mining operations in the Southeast, Interior and Arctic regions of the state. Today’s industry is dominated by six major producing mines with an annual direct employment of 4,600 in 2013.

Jobs in the mining industry more than doubled between 2001 and 2013, with increases in gold mining responsible for most of the growth. Wages have also shown significant growth, up 22 percent between 2002 and 2011 compared to an eight percent growth during the same period for all private sector wages. The average annual wage for a mine worker in 2012 was around $100,000, second only to oil and gas workers and twice the state average.

Mining is poised to play an even more major role in the state’s economy than it does today. At present, there is considerable exploration and development activity occurring in many areas of the state, led by eight major advanced exploration projects. Exploration and development expenditures in 2012 amounted to $335.1 million and $343.4 million respectively.

The long timeline from exploration to production coupled with the industry’s vulnerability to changes in world commodity prices, financing, global economic conditions and environmental regulations make it difficult to predict with pin-point accuracy what the future holds in terms of employment.

However, a survey of operating and proposed projects conducted by the Alaska Miners Association in 2013 suggests that over the next decade the industry could add 2,000 jobs. Alaska Department of Labor and Workforce Development projections—which are based on a variety of factors including historical trends, population projections and expected economic changes —are lower, but even these projections indicate a 24.8 percent increase in employment from 2012 to 2022.

Within the current workforce, there is considerable aging of higher skilled employees; for example, 47.1 percent of mechanics, 51.1 percent of mining materials engineers and 65.4 percent of mining machine operators are 45 years of age or older. Although attrition across the industry is fairly low, some of the more remotely-located mines can experience an annual turnover of up to 20 percent.

Faced with the challenges of attrition and aging within the current workforce, competition from the global mining industry as well as other resource development industries in Alaska and the increased demand from new mining projects across the state, the mining industry embarked on a workforce development planning process in 2011.

Headed up by the Human Resources Committee of the Alaska Miners Association (AMA HR), the process has resulted in this Alaska Mining Workforce Development Plan.  The goal of the plan is to assure that a well-trained workforce is available to staff current and planned mining operations in the state.

 

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