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Web posted Sunday, January 27, 2008

Mining gives wing to aviation business, local economies

By Patricia Liles
For the Journal


  A Cessna Grand Caravan operated by Fairbanks-based Wright Air Service sits on the edge of a gravel airstrip located at the Terra gold exploration property near Rainy Pass in the southwestern part of the Alaska Range. International Tower Hill Mines Ltd., a junior exploration company working at Terra, chartered the aircraft in early August for an analyst and media tour of the remote property. Demand for air transportation to remote mine exploration properties in Alaska has increased in recent years, causing clients to book charter service or make air reservations weeks or even months in advance. Photo/Patricia Liles/For the Journal   
Fairbanks-based Wright Air Service added another Cessna Grand Caravan. It's a turboprop, high-wing aircraft with large cargo doors and has the ability to land and take off in short distances.

“It's the perfect airplane. They can land and get off in a fairly short distance, compared to other planes,” said Bob Bursiel, president of Wright, a large regional air carrier that offers both scheduled flights and charter air service throughout Interior Alaska.

Wright added the extra Caravan to its fleet anticipating more business related to mine activity.

“There has been an increase in that during the last couple of years,” Bursiel said. “We've done quite a bit more flying in the summer - mainly five major outfits going out to different places.”

Other air carriers in Alaska have noted the increased activity and business coming from the mining sector, a natural resource industry that often relies heavily on air transportation for access to remote locations where metal exploration and development is carried out.

Thanks to dramatic increases in metal prices, mine-related activity is booming in Alaska. In 2006, Alaska's mineral industry set an all-time record of $3.533 billion for the amount of exploration and development spending and the value of the metals produced, according to a Alaska Mineral Industry 2006 special report released last November.

Mineral exploration spending in 2006 hit $179 million, a 72 percent jump, compared to the year before. Development spending totaled $495 million, a 42 percent increase, setting a new state record for that sector of the industry.

“Mining has become a significant contributor to our economy,” Tom Irwin, Department of Natural Resources commissioner, said in a press release.

In the exploration phase of the mining industry, activity focuses on finding and proving up a mineral deposit. Transportation is a key part of that initial activity.

“I would guess next to drilling and labor that transportation is very expensive,” said Rich Hughes, development specialist in the state's office of Economic Development/Minerals. “I hear that the availability of air support is very limited. Exploration companies and the DGGS (Division of Geological and Geophysical Surveys) have to incur extraordinary costs to assure that they have support when needed. The clients are booking services months in advance.”

Sam Dashevsky, a Fairbanks-based geologist, worked on gold and gold-copper exploration properties throughout Interior Alaska last year for International Tower Hill Mines Ltd., a Vancouver, B.C.-based junior exploration company.

“In 2007, we enjoyed excellent service from air charter operators serving our couple of remote projects. Getting contract helicopter support was more problematic, but charter fixed wing aircraft service was super,” he said in an e-mail.

The company's southwestern Alaska Range project, called Terra, was serviced out of Anchorage with weekly scheduled flights and numerous ad-hoc flights as needed for moving parts, supplies and people, Dashevsky said.

“We relied principally on Regal Air for that, augmented by Wright Air out of Fairbanks,” he said. “As busy as it was for them, we were never left in the lurch nor kept waiting excessively, except on weather.”

Flexing their wings

Maintaining flexibility to accommodate short notice is key in working with the mineral industry, Bursiel said.

“You have to have the equipment and be ready when they want you. A lot comes up at the last minute,” he said. “If we're a little bit flexible and they're a little bit flexible, we can work it out.”

Glen Alsworth, who heads up the family-operated Lake Clark Air based in Port Alsworth in Southwest Alaska, also said the ability to provide short notice service is an important aspect in working with the growing mineral industry.

Some flights are time-critical, warranting a special charter to deliver a particular part or perhaps a mechanic, he said. Other transportation needs can often wait for an hour or two until a regularly scheduled flight departs, saving the client several hundred dollars.

Aviation traffic has increased in the Lake Clark and Iliamna areas, thanks in part to exploration activity related to the Pebble mine project.

“We never traditionally went into Iliamna much, but we went in there almost every day this year,” Alsworth said.

Mining spurs an economy

Auxiliary business also increased for Lake Clark Air, from locals living in villages nearby and for area fishing lodges during summer months.

“With an industrial demand for service, there is a tagalong opportunity for locals to jump back and forth to Anchorage,” Alsworth said. “With four or five different carriers, they can get on any one of the eight to 10 flights a day that go to Anchorage.”

He's also noticed a dramatic increase in the amount of freight bought in Anchorage and shipped to the Iliamna-area villages.

“I have 1,000 pounds of freight sitting in the office here going out to one of the villages. In the past, there was very little freight going out,” Alsworth said. “Now that people are having some cash flow, there are cases of diapers, flour, sugar, toilet paper, coffeeÉwe have moved more goods like this-hard goods and food into the villages-than the last 20 years combined. People have money to spend.”

To accommodate the growing business, Lake Clark Air plans to add a Beech 99 airliner, a twin turbine plane that can carry up to nine passengers plus 1,000 pounds of freight.

“It saves me running a Cessna 207 in and out of town to pick up luggage and freight,” Alsworth said. “It's way more efficient for the company.”

Iliamna Air Taxi has also responded to the increased demand for local traffic, freight delivery and direct service to the Pebble project, adding its second Pilatus PC12 aircraft in the spring of 2004, the company's Tim LaPorte said.

“The addition of this airplane has also allowed Iliamna Air to expand its on-demand charter capabilities statewide,” he said in an e-mail. “We have been working the Pebble project in our back yard for about 20 years, back before it was a known mineral depositÉas the scope of the project became bigger, we added more flights to Anchorage to accommodate their needs.”

Iliamna Air has also seen an overall increase in travel to Anchorage as well as between local villages in the Iliamna area, LaPorte said. “Families with jobs buy more groceries, Hondas, snowmachines, which result in higher freight volumes.”

Activity at the Pebble project will also impact other air carriers in the state, Alsworth predicted.

“I think that any time a major development comes into an area, there is a residual benefit everywhere in the aviation industry, and a very particular benefit in that area,” he said, citing increased activity statewide during the Exxon Valdez oil spill. “Many operators committed resources to support air logistics for the oil spill, which created a vacuum for service in other parts of the state. Alaska has a very limited capacity of carriers and servers. Naturally we were busier because of the oil spill, but we never flew to Valdez.”

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