Alaska State Agency, Miners Spending Nearly $60 Million on Ambler Road and Prospects This Year
Mining developers and Development Bank of Alaska executives plan to spend nearly $60 million to advance a pair of mining prospects and a controversially long road to access them next summer.
The Alaska Industrial Development and Export Authority’s board of directors approved a $15.4 million budget in late January for the 2022 work season on the Ambler Access Project. This amount is matched by Ambler Metals LLC, the joint venture that is leading exploration work on the Arctic and Bornite multi-metal mine prospects in the upper Kobuk River basin under a cost-shared development agreement. .
The state agency is now pushing for a final investment decision on the 211-mile Ambler Highway in 2024 after nearly a decade of study and debate on the industrial access route, council chairman says Dana Pruhs.
Last year, AIDEA and Ambler Metals had a combined budget of $70 million for engineering, design and other work on the road alone.
Ambler Metals will be able to use its pre-development investments as credits against tolls and other user fees that the company would pay once the road is developed under its agreement with AIDEA.
The works will provide a range of jobs for nearly 50 local residents, according to AIDEA. Much of the work will build on field studies and permitting work done last year, Pruhs said during the budget approval.
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Officials from AIDEA and Governor Mike Dunleavy’s administration have highlighted the potential of the road to access many other less delineated mining prospects in the area, despite significant opposition from tribal and village governments in the area, especially those near where the road would connect with the Dalton Freeway north of Fairbanks.
From there it would stretch largely along the southern flank of the Brooks Range to the vast Ambler mining district. Preliminary explorations have been carried out for decades in the area, but the isolated location has so far prevented any significant development.
Local opposition to the road stems from concerns that it will disrupt caribou migrations and attract additional sport hunters to a large area of the interior used primarily for subsistence purposes.
AIDEA leaders insist that use of the road will be actively monitored and restricted to mining traffic only, with exceptions for local uses.
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They model their plan for an industrial toll road after the 52-mile haul road to the Red Dog zinc mine in northwest Alaska that the authority funded in the late 1980s and has successfully generated toll revenue for decades.
The Northwest Arctic Borough passed a resolution supporting Ambler Road last October.
Another opposition arises from the skepticism that the road will trace for the state. Estimated in 2017 to cost between $280 million and $380 million for the gravel base construction, the final environmental impact assessment, or EIA, for the road pegged the total construction cost at around $520 million. in 2020.
AIDEA has not yet publicly detailed its plan to coordinate the financing and construction of the road, with the development of the mineral prospects needed to support the road beyond a concept plan. However, authority officials note that the alignment of road and mine funding is complex, but something that has been achieved with Red Dog and the road there.
AIDEA executives tout the potential to create more than 3,900 jobs in the Ambler District once multiple mines are active.
Although there are more than a dozen early-stage prospects in the Ambler district, only the Arctic and Bornite deposits operated by Ambler Metals have been drilled extensively.
Ambler Metals is a joint venture of Australian mining company South32 Ltd. and Vancouver explorer Trilogy Metals, which conducted early work on the prospects. Trilogy and South32 are also funding a $28.5 million work program this year that will focus on engineering studies at Arctic, the more advanced of the two prospects; submit a Clean Water Act wetland permit application for the Arctic project to the US Army Corps of Engineers early this year; and drilling the Arctic and other targets in the region.
Trilogy executives expect clearance for the open pit mine to take between 24 and 36 months, a timeline that could apparently put the mine on schedule for development alongside the road, if that takes place for business.
Representatives for AIDEA and Trilogy did not respond to questions about the funding plan at the time of this story’s publication.
Authority officials said road construction would likely be funded by long-term revenue bonds, although the Arctic mine currently has an expected life of just 12 years.
Elwood Brehmer can be reached at [email protected].