Last month AMA’s leadership elected to send a letter to all candidates for Alaska Legislature and Governor, as well as sitting Senators, outlining the negative perception of Alaska’s mining policies and impediments to mineral investment in our state. We believe change is critical to grow Alaska’s mining industry. We’d like to share this letter with you so that you are aware of what has been communicated to our future policymakers.
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The Alaska Miners Association (AMA) thanks you for your candidacy for office in the State of Alaska. We understand the great personal effort and resources that are put into a campaign on behalf of a candidate; your willingness to serve is deeply appreciated. As election day nears, we would like to provide information on the current state of investment in the growth of Alaska’s mining industry, and on the business climate in general.
The potential for mining in the state of Alaska is tremendous. Our gold, silver, zinc, lead, and coal mines operate safely and with a record of environmental excellence, and our mines help to meet the demand for minerals around the globe. We have dozens of exploration projects that stand to add to this production, and miles of underexplored terrain with known mineral potential. The United States government has recognized this, putting a nationwide priority on an inventory of “critical minerals,” many of which are found in high quantity in Alaska, and put an emphasis on efficient, predictable permitting to bring new mines into production.
So why aren’t there more mines in production in Alaska? While we suffer from a significant lack of infrastructure, our most glaring fault as a State is the uncertain and often unworkable regulatory regime that Alaska has sadly become famous for.
Take for example the 2018 Fraser Institute Report. The Fraser Institute conducts an annual survey of mining companies “to assess how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration investment.” In 2017, the Fraser Institute survey responses provided sufficient data to evaluate 91 worldwide jurisdictions, which were ranked according to the extent that public policy factors encourage or discourage mining investment in the respective jurisdictions. The Fraser Report concluded that Alaska ranked fifth in the world in terms of mineral potential, which is no surprise given our enormous mineral reserves that rival that of an entire country. However, Alaska ranked #29 in the world, behind jurisdictions like the Democratic Republic of Congo, in terms of Policy Perception. Specifically, respondents cited “Uncertainty Concerning Environmental Regulations, Regulatory Duplication and Inconsistencies, Uncertainty Concerning Protected Areas, Political Stability,” and more as disincentives to invest in Alaska.
Another example is the July 18 CNBC report titled “Top States to Do Business” in which Alaska came in at number 50. Our state is actually ranked as the worst state in the nation in which to do business.
Unfortunately, these statistics are not surprising to Alaska’s miners. In recent years, we’ve seen tremendous harm to our industry in the way of challenges solely rooted in the allegation that our environment isn’t properly protected from resource extraction. Various policy proposals, through the Legislative or initiative processes, and through fundraising campaigns and frivolous litigation, have all overlooked the science-based safeguards that make up Alaska’s world class regulatory system. And some lawmakers are part of the problem.
It doesn’t have to be this way, and lawmakers can instead be part of the solution. While you and Alaska’s residents cannot control Alaska’s challenging conditions, commodity prices, and to some degree, our existing infrastructure, we absolutely CAN control the policies in which those wanting to invest in Alaska’s mining industry will encounter.
This is where Alaska’s elected officials come in. When the 31st Legislature convenes January 15th, it is our hope that you will have gleaned an education on what policy changes are critical to attract investment to Alaska’s resource industries. AMA stands ready to help with this education in any manner that is convenient to you. We are eager to shed light on the current problems and very specific solutions to our flawed policies.
Mining in Alaska accounts for 9,000 jobs with an average annual wage of over $108,000, twice the state’s average wage. These jobs are in 55 communities around the state, half of which are rural and where there are few employment opportunities. Last year, mining generated nearly $250 million in revenues to Alaska Native Corporations and spent $580 million in procurement with over 600 Alaska businesses. Finally, mines paid $34 million to local governments and over $110 million to the State of Alaska general fund and entities.
At a time when our State desperately needs economic diversification and growth, mining stands ready to continue and grow our significant economic contributions all while upholding our superb safety and environmental track record. We look forward to working with you to ensure that can happen.