Kuskokwim Port Authority
A Kuskokwim Port Authority is proposed to assist in the development of the remote Kuskokwim River region. A Kuskokwim Port Authority with an operating area extending from Napakiak on the lower Kuskokwim to Crooked Creek and Donlin Creek would provide revenue bonding capability to help finance transportation and energy infrastructure for this impoverished region. The potential development of a gold mine at Donlin Creek presents significant public policy issues for the State of Alaska including the need for low cost energy in the Kuskokwim region and providing transportation access to its resources. The establishment of a Kuskokwim Port Authority in the region would promote long-term economic development, provide opportunities to improve quality of life for local communities in the Kuskokwim region, assist in the cultivation of resources that enable social and economic enhancement opportunities, and develop local capabilities. The Port Authority would provide tangible and measurable results by enhancing the impact of development of resources in the region, and is necessary to attain goals for the State of Alaska for economic development and social progress.
The Donlin Creek drainage contains one of the largest undeveloped gold deposits in the world, and is regarded by natural resource specialists, economists, elected leaders, and policy makers as one of the most significant developments in recent Alaska history. Located 280 miles west of Anchorage, and 14 miles north of Crooked Creek.
The Kuskokwim region in southwestern Alaska is documented as having some of the highest unemployment rates, dependence on welfare transfers and general lack of economic development. Donlin Creek presents the best opportunity for sustainable long-term economic development to transform the region and revitalize the economy. Lack of energy and transportation infrastructure however, presents a major obstacle to the Donlin Creek Project.
Economic Development Benefits
When the Donlin Creek Mine has advanced through the permitting stage and construction begins, this project is expected to be the single largest employer and direct contributor to the cash economy in the Kuskokwim region. In addition, indirect benefits include lower shipping, fuel and energy costs, increased local business opportunities, and increased road and marine facility maintenance.
Approximately 600 to 700 jobs would be created during construction and 400 to 500 during annual operations of the Donlin Creek project and regional electrical power system. Direct jobs at the mine and power system could reduce the regional unemployment rate of 20% (1,800 persons in the summer of 2003) by about one-third. Capital costs range from $895,000,000 to $979,000,000 for both the mine and power projects. These projects would generate annual, local expenditures of more than $80,000,000, with annual salaries accounting for approximately $30,000,000 of this amount. During construction and throughout the expected 20-year-mine life, $2.5 billion dollars would likely be expended directly into the regional economy. This would be a much larger economic driver than the $665 million over twenty years in federal and state transfer payments for welfare in the region, assuming current levels of welfare and unemployment payments. With unemployment reduced by one-third it can be anticipated that the region’s current welfare and unemployment payments of $33 million per year would also be reduced by about one-third. The net present value of these savings to the state and federal governments from 2010 to 2029 exceeds $150 million.
Energy & Transportation Infrastructure
Power Supply Alternatives
There are no existing power supply facilities in the region that can provide the energy for the mine’s projected load demand of about 70 megawatts. For the mine to be economically feasible, new power facilities must be constructed. Power feasibility studies of several power alternatives have been conducted. Options being considered for power supply include Mine-site generated power using diesel supplemented by renewable energy; a Coal-fired power plant at Bethel; and a Railbelt intertie.
Transportation
Donlin Creek would need transportation infrastructure to support the movement of about 150,000 tons of construction material and 110,000 tons of supplies and transportation of 450-500 employees per year during operation. Hence, Donlin Creek will spur the development of transportation infrastructure that will improve conditions for surrounding communities and businesses. In the immediate vicinity of the mine, a docking facility and a road from a port on the Kuskokwim to Donlin Creek will be needed to support the construction and ongoing mine operations. At the same time, costs for transportation of goods and materials will be significantly reduced. Due to economies of scale, sea-river-land transportation costs will drop. Diesel, heating oil and gasoline transport will become more economical, and passenger and cargo air transport will also be positively affected.
Donlin Creek - Summary
- Conventional open pit, truck and shovel
- Scheduled to begin operating 2010
- Estimated to produce 30,000 tonnes (metric ton) per day for 20-30 years
- Year round operations, 24 hours a day, two 12-hour shifts
- Employment during operation: 400-500 jobs
- Employment during construction: 500-600 average
|
