Minerals prices rebounding, but jobs still off from 2012 highs
Alaska saw a dip in mining jobs during 2016, numbers attributed to losses in the oil patch as well as hard rock mines when commodities prices took a dive.
Employment numbers are tallied in different ways by various agencies. Alaska Department of Labor statistics show Alaska went from 17,400 mining jobs in 2015 to 14,200 jobs in 2016.
That number lumped in petroleum jobs, said Alaska Economist Neal Fried, with “mom and pop” placer mines and large entities such as Usibelli coal.
The Alaska Miners Association separates out minerals and construction materials mining to get its tally: Jobs went from a high of in 2012 of 10,000 to 8,600 in 2016, said AMA President Deantha Crocket.
“But overall, it’s been pretty stable,” Crocket said.
That outlook could change in the placer mining sector as new developments include a spike in the price of gold to $1,294 an ounce as of April 18.
But at the only Alaska coal mine in operation, Usibelli Coal has no international trade partners for the first time in more than 30 years and has severely downsized. Last year the company sold its last trainload to Japan.
“We have no export customers this year,” said Lorali Simon, Usibelli’s vice president of external affairs.
Production fell to 1 million tons in 2016 when Usibelli lost trade partners located in Chili, South Korea and Japan. Customers now are located only in-state.
“In our heyday, we produced 2.1 million tons a year,” Simon said.
Currently, Usibelli supplies coal for six coal-burning power plants located in Interior Alaska.
“We’re looking for trade opportunities but currently marketing conditions don’t support exports,” Simon said. “There’s a long explanation for that. It’s based on the strength of the U.S. dollar. It’s due to the fact there’s more natural gas on the market, and cheaper coal out of Indonesia and Australia.”
The “onslaught of regulations” from the Obama administration is easing under the Trump administration, Simon said.
“A lot of damage was done the last eight years to our industry,” she said. “Being able to climb out of that is a source of optimism for us. We’re looking for every opportunity to expand and the only opportunity is on the export market.”
Employment at Usibelli fell from 150 in 2011 to the current 100 employees. Some were laid off, others involved positions that went unfilled after attrition, Simon said.
Total payroll for all mineral resource mining saw a payroll of $675 million in 2016. The industry produces zinc, lead, copper, gold, silver, coal, as well as construction materials, including rock, sand and gravel.
These are good jobs, Crocket notes, so losses are felt in the Alaska economy. The average annual wage is $108,000, or twice the state average income. A haul truck driver earns between $85,000 to $100,000. Diesel mechanics are in high demand. Jobs that require degrees such as metallurgists also are in need and pay well.
“We calculate a diverse spectrum of jobs. Mines operate like small independent cities,” Crocket said. “They also employ medics, chefs, everything needed in the day-to-day life for the operation of a mine.”
A McDowell Group study in 2011 had predicted a rosier future for mining based on several advanced exploration projects that had the potential to dramatically increase Alaska’s mining employment.
The Chuitna coal project on the west side of Cook Inlet was predicted to create 300 to 350 jobs; Wishbone Hill coal project was to employ 100 workers once in production; and the Pebble mine in Southwest Alaska would require an operations labor force of 800-1,000, the study predicted.
Now Chuitna’s prospects are shuttered, along with Wishbone Hill. Pebble may be on the comeback but that’s still years away.
Yet another statistic collected by the Alaska Department of Labor looks at a narrow window into those employed mining hard rock and other minerals. Economist Fried notes those numbers have been stable. In 2015, the state counted 2,983 jobs. In 2016, the number was 2,943.
The price of gold dropped in December to $1,130, then rose to $1,294 per ounce by April 18.
“These are still good prices for gold. They’re not historic prices, but they have rebounded substantially. That’s a good trend,” Fried said.
Non-production time when prices are good is a time for marketing mines to investors, AMA’s Crocket said. According to discussions at AMA meetings, investments have boded well in the past year for several projects, she said.
New projects for other minerals are in development. The farthest along is the Donlin Gold project, which is nearing completion of its environmental impact statement.
A graphite prospect near Nome, a copper mine at Ambler and more small gold operations in waters around Nome could boost state numbers in a new direction for the coming years.
The state, through the Alaska Industrial Development and Export Authority, has started the permitting process for the Ambler Road to reach the prospect. The scoping period for the environmental impact statement was recently extended to the end of this year.
Overall prices have improved on commodities since a low in 2014-15, Fried said.
“We can expect those numbers to go up again,” he said. “Price is a plus. As a result of prices, exploration activity should improve. I think there’s signs of that. Prices help make possible for other mines to open. It improves the economic environment for opening new mines. That’s one of the most important things.”
Naomi Klouda is a correspondent for the Journal. She can be reached at [email protected].