ining has long been a key fixture of Alaska’s economy. On a small scale, people flock to the 49th state to tour different operations. Kennecott Mine was once a booming copper mining site and is now a National Historic Landmark, attracting tourists eager to visit the ghost town and get a feel of the Gold Rush era it once dominated. Gold Dredge No. 8 provides tourists with an opportunity to pan for gold while learning more about the Interior’s mining history. Although some tourists might visit Alaska to learn about the state’s mining past, the industry remains at the center of the state’s economy today.

The Alaska mining industry includes exploration, mine development, and production, and it continues to provide Alaskans with thousands of jobs while generating millions of dollars of personal income. Alaska’s six large operating mines—Fort Knox, Greens Creek, Kensington, Red Dog, Usibelli, and Pogo—provided 2,400 full-time jobs of the state’s nearly 4,500 mining industry jobs in 2018. In all, there were 9,200 direct and indirect mining industry jobs in 2018, and those jobs dished out $715 million in payroll. Development spending in 2018 was $170 million and the export value from Alaska production was $1.8 billion.

Mineral exports accounted for 36 percent of Alaska’s export total in 2017, and all signs point to mined commodities staying one of the state’s leading exports for years to come.

Five of the six large mines operating in Alaska extract metal. Fort Knox Mine, located about 20 miles outside Fairbanks, is the state’s largest surface gold mine having produced 381,100 ounces of gold in 2017. Pogo is an underground mine about 130 miles from Fairbanks that produced 271,300 ounces of gold in 2017. About 80 miles from Kotzebue is Red Dog Mine, which has one of the largest open-pit zinc deposits in the world. Red Dog produced 7.7 million ounces of silver, 122,700 tons of lead, and 597,300 tons of zinc in 2017. Like Red Dog, Greens Creek Mine produces silver, lead, and zinc, in addition to gold. Greens Creek, which is located on Admiralty Island about 18 miles from Juneau, produced 8.4 million ounces of silver, 50,900 ounces of gold, 18,000 tons of lead, and 52,500 tons of zinc in 2017. Kensington Mine is an underground long hole stopping and drift-and-fill gold mine 45 miles north of Juneau that produced 115,100 ounces of gold in 2017.

Alaska ranked in the top ten globally for known gold, lead, silver, and zinc deposits in 2017. The state’s relationship with mined metals goes back to 1870s, when Alaskans first started mining gold in the state. Now, the state ranks ninth globally for known gold deposits, with 40 percent of the gold produced used for jewelry, 35 percent for electrical and electronic products, and 20 percent for coins. Gold can also be used in dental applications.

Alaska ranked sixth globally for known lead deposits in 2017, and 85 percent of the state’s mined lead is utilized by the lead-acid based industry. Lead is also used in ammunition, though recent concerns about its effect on the environment have reduced its role in gasoline, paint additives, and pipes.

It should come as no surprise that the silver produced in Alaska is used for jewelry, but that’s not the only reason Alaska ranked tenth globally for known silver deposits. The silver produced in the state is also used for emerging medical and hygiene applications such as bandages and clothing.

Zinc didn’t have much history in Alaska before Red Dog began production on land owned by NANA Regional Corporation just 46 miles inland from the coast of the Chukchi Sea. Red Dog, which is operated by Teck Alaska Incorporated, now ranks seventh globally for known zinc deposits, and the majority of the mine’s zinc that is used domestically is utilized for galvanizing.

The majority of the metals mined in Alaska leave the state as concentrate and head to smelters around the world. The concentrate’s subjected to chemicals, gasses, and pressure to extract pure metals from the ores and minerals mined in Alaska. Once the smelting process is completed, the concentrates that left the state are turned into pure metal. NANA’s Vice President of Natural Resources Lance Miller says the concentrate that leaves Red Dog is around 55 percent zinc before arriving at a smelter. “There’s something called treatment charges, which are the costs that the smelter charges the mine to treat that ton of concentrate,” Miller says. “Those go up and down, depending on the supply and demand of the concentrate.”

Red Dog has unique circumstances due to its location. Because its concentrates are transported via the Chukchi Sea, Teck has a smaller window to deliver its concentrates to smelters. The first step in the delivery process is trucking the concentrates from the mine to its port located 52 miles away. “The zinc and lead concentrate are trucked to the port site where it’s stored throughout the winter,” Miller says. “Shipping occurs during a 100-day season. Those ships come in—there’s usually twenty-three to twenty-six large ships—[that sail to] around eleven smelters worldwide. Those smelters are roughly split a third in Canada, a third Europe, and a third Asia.”

Mark Kiessling, the general manager for Coeur Alaska, which operates Kensington Mine, says Coeur exports an average of 9,600 ounces of gold concentrate each month. Coeur is under contract to sell its concentrate to three companies, including Ocean Partners and Cliveden. While Ocean Partners and Cliveden are both third-party brokers, the third company Coeur sells to, Sumitomo, is a smelter located in Japan. Kiessling says the sale prices vary for each contract, but there’s a general baseline for how much the gold concentrate leaving Kensington is sold for. “Pricing is unique per contract but typically consists of an averaging of London Bullion Market [LBMA] pricing after product has shipped,” he says. “LBMA determines daily pricing based on international supply and demand for gold bullion.”

The fluctuating value of minerals is one aspect of the industry that keeps industry players alert. According to Kiessling, international tariffs and political risk are other areas of concern. Because Alaska mines mostly sell their concentrates to foreign companies, “[We’re] reliant on geopolitical relationships between the Unites States and the governments of our international trading partners,” Kiessling says.

Between exploration and development investments and the gross value of mineral products, the total production value of Alaska’s mining industry was $2.2 billion in 2018. Although zinc, gold, silver, and lead are the top exports, the production of copper, coal, rock, gravel, and sand minerals also figure into that value.Mineral exports were 36 percent of the state’s export total in 2017. Those exports were valued at $1.8 billion, the majority of which were zinc and lead concentrates from Red Dog. Mines have a direct positive impact on local communities, providing jobs with high wages and utilizing local vendors. For example, Pogo Mine paid out $44 million in wages in 2018 and spent an additional $130 million on vendors and suppliers. The mine has 320 employees and many contractors working for it. Coeur spent $53 million on payroll and benefits for its 387 employees working full time at Kensington in 2018.

Although those working directly in the mining industry tend to experience financial stability, the industry also contributes to economy stability through payments to government. The industry made an estimated $34 million in payments to municipalities in 2018, while royalties and other fees paid to the state were an estimated $149 million. As an example, Kensington was the second-largest taxpayer to the City and Borough of Juneau after producing approximately 113,778 ounces of gold last year.

In 2018, $358 million was paid to Alaska Native corporations as a part of the royalty sharing provisions under the Alaska Native Claims Settlement Act.

It may seem that money is rolling through Alaska’s mines, which is true. But Kiessling still describes price risk exposure as one of the biggest challenges associated with exporting mines. “Because we sell a product that requires further processing, we are exposed to short term price fluctuations,” he says.

Considering the majority of Alaska’s major minerals are exported as concentrates, it poses the question as to why companies haven’t invested in building smelters in the state. Having smelters in the state would certainly create additional jobs and create more revenue, but the costs and challenges are significant. Smelters require a great deal of energy, which means Alaska wouldn’t be the best suitor for a potential investor interested in building a smelter site considering the high cost of energy across the majority of the state. Another reason there aren’t any smelters in Alaska is because the environmental permit process can be strenuous.

Considering the majority of Alaska’s major minerals are exported as concentrates, it poses the question as to why companies haven’t invested in building smelters in the state. Having smelters in the state would certainly create additional jobs and create more revenue, but the costs and challenges are significant. Smelters require a great deal of energy, which means Alaska wouldn’t be the best suitor for a potential investor interested in building a smelter site considering the high cost of energy across the majority of the state. Another reason there aren’t any smelters in Alaska is because the environmental permit process can be strenuous.

Mining remains a growth industry in Alaska. The major mines continue to thrive year after year, with many of them still in production long after their original mine-life estimates, and a couple promising projects are deep in the permitting process. Two of the more coveted mining projects currently going through the permit process are the Donlin Gold project and the Pebble Project.

Donlin Gold is a world-class gold deposit that was discovered in 1988 about 280 miles northwest of Anchorage. NovaGold Resources and Barrick Gold partnered to form Donlin Gold and are working together to manage the project through the permitting process and into construction and operation. The Pebble Project is a copper, gold, silver, and molybdenum project that was discovered in 1987 in the Bristol Bay region of Southwest Alaska. Canadian mineral exploration company Northern Dynasty Minerals owns the deposit, which is home to the largest known copper and gold resource in North America. More than $500 million has been spent on research for the controversial mining project thus far.

Although both projects are still years away from moving online, they are in the advanced exploration stage, which is a step in the right direction for the industry. One aspect that makes the Pebble Project unique is it would include the production of molybdenum, which has no history of being produced in Alaska. Molybdenum is most commonly used in steel alloys and superalloys, and its addition to the list of metals produced in Alaska would strengthen Alaska’s worldwide reputation as one of the leaders in the mining industry.