The Red Dog mine has been a huge economic engine for the Kotzebue region for decades. But the zinc and lead deposits the mine relies on are running low and Red Dog may shut down operations as soon as 2031. KOTZ’s Desiree Hagen has been following this story.
The following transcript has been lightly edited for clarity.
Ava White: If Red Dog closed how big of an economic hit would this be?
Desiree Hagen: So just a little background first. The Red Dog Mine produces about 4% of the global zinc supply. The land is owned by the NANA Regional Corporation, while the mine itself is owned and operated by Canadian mining company, Teck Resources. Red Dog is often held up as a success story for how an international mining company can work with an Alaska Native corporation.
And the economic impact would be enormous if the mine closes down. In 2023, about a thousand NANA shareholders were working for the mine, which equates to about $62 million in yearly wages to shareholder employees.
Here’s NANA’s Vice President of Lands Liz Cravalho.
“We cannot stress enough the impact of Red Dog’s planned closure on shareholders and the region as a whole,” said Cravalho.
As Cravalho said, it’s not just shareholders. Red Dog revenue touches everything in the Northwest Arctic.
The Northwest Arctic Borough receives about 80% of its revenue from what’s known as a payment in lieu of taxes agreement or PILT. So the Red Dog mine contributed around $26 million to the Borough last year. That money helps support the region’s schools, infrastructure projects and things like water and sewer in the villages, even public radio.
Red Dog revenue also supports other Alaska Native Corporations through 7(i) and 7(j) contributions which is a provision of the Alaska Native Claims Settlement Act. Since mine operations began in the late 1980s, NANA said the company has shared around $1.8 billion with other Alaska Native Corporations/ANCs.
AW: Do you have a sense of how likely it is that Red Dog will shut down?
DH: It’s kinda in limbo. There are two deposits close to the mine that Teck and NANA are looking at developing. If developed they could extend the mine life for decades. But before a decision is made, Teck needs to build a gravel road to access the deposits and do more exploratory work. Right now the company is waiting for a permit from the Army Corps of Engineers before they are able proceed.
AW: What can you say about these potential deposits?
DH: They are located about 8 miles from Red Dog’s main operating site, on state land, unlike Red Dog’s current location which is on NANA-owned land. This brings into question how those deposits would pan out economically both for NANA and the state if they are developed. As far as the deposits themselves – they are not easily accessible from the surface and would require underground mining – which is different from the open pit mining Red Dog currently uses. Teck said they aren’t really able to say much about the deposits until more exploration work is done.
AW: Do we know when Teck will make a decision?
DH: According to the company, once Teck receives the permits and the exploratory work begins it will take about six years before they can determine if the deposits are “economically and environmentally viable.”
That puts us really close to the planned 2031 closure of the mine. But keep in mind, if Teck moves forward with those deposits there’s still more work that would have to be done. Any major development would require environmental permitting, a haul road to transport ore, and a mine would need to be planned and constructed. It could be a lengthy process.
Here’s what Teck representative Wayne Hall said in a recent interview.
“I can’t really speculate on the timelines,” said Hall. “What I can tell you, it’s in all of our best interests to do whatever we can to shorten these timelines so that there is not a gap in production.”
AW: Does the borough have a plan B if the mine doesn’t continue producing ore?
DH: Both NANA and the Northwest Arctic Borough have begun preparing. Last fall NANA shareholders voted to establish a fund modeled after the Alaska Permanent Fund that puts Red Dog revenues aside to invest. This would ensure that NANA shareholders will continue to have sizable dividends once the mine ultimately closes – whether that’s in eight years or decades from now.
The Borough who – remember – receives the majority of its revenue from the mine has begun making budget cuts and is looking more seriously at the programs and services that it funds. But, the question of what will happen if or when the mine closes is a discussion at every recent Borough meeting. Several Assembly members have called it a “difficult and ongoing” conversation.
