Most of Alaska's major mine operations reported increases in production last year. Miners gave presentations at the biennial Arctic International Mining Symposium held in Fairbanks March 9-13.

Reports included record production from the Pogo underground gold mine near Delta Junction, which became the state's largest gold producer in 2009 with 390,000 ounces produced.

But the positive production news was tempered by numerous discussions of regulatory and legal challenges to Alaska's mining industry, which generated an estimated $2.85 billion in total value during 2009.

Key topics that miners and presenters noted included the ongoing public debate about the Pebble copper-gold-molybdenum exploration project, and the recent appeal of a water discharge permit at the Red Dog zinc and lead mine.

Noting that Pebble is "probably one of the largest metal accumulations on the planet," NovaGold Resources President and CEO Rick Van Nieuwenhuyse identified aggressive opposition to the exploration project as a negative contributor for investor perceptions of Alaska's mining industry.

"The Pebble controversy is global, and it signals to investors that this is a tough place to do a mine," said Van Nieuwenhuyse.

His company, in partnership with Barrick Gold Corp., advanced the 40 million-ounce Donlin Creek gold deposit in Southwest Alaska through a feasibility study last year. This year, the developers are working to review and refine estimated capital costs for an open-pit gold mine, including additional research into the potential use of Cook Inlet natural gas for an energy source.

According to a project update, Donlin Creek partners have budgeted $100 million for required permitting and engineering work to bring the project to a construction decision point.

Alaska's "rigorous permitting process is too long, and too expensive," Van Nieuwenhuyse said. "Project delays, after you have invested capital, are upsetting to investors, and lawsuits have become part of the landscape, which are timed to inflict the maximum damage to projects."

Other speakers at the conference, including both Alaska Gov. Sean Parnell and Lt. Gov. Craig Campbell, noted Pebble opponents are attempting to stop progress of the exploration process before state and federal regulators begin their review of a proposed development plan, which has yet to be submitted.

"I have faith in our mine permitting process to do a good job evaluating the project, once permits are filed," Parnell said. "We're never going to allow a mine that trades the future of one resource for another, but neither will we be bullied before the permitting process has run its course."

Both politicians also mentioned the Red Dog water permit appeal for the Aqqaluk deposit, which threatens to shut down the open-pit mine located on NANA land in Northwest Alaska.

"Here's a mining activity that has actually improved water quality while providing 500 jobs," Campbell said.

Representatives from Red Dog showed aerial photos of the creek immediately downstream from the mine site, taken before the mine began producing in 1989, and again in recent years. The contrast was marked: before mine development, the creek's water showed obvious red coloration and stream banks were barren. The recent photo showed lush green vegetation growing down to the water's edge, with no discoloration in the water.

"Fish are spawning where they never have before," Jim Kulas, manager of environmental and public affairs at Red Dog.

Two years ago, as a result of a settled lawsuit filed by five Kivalina residents over water discharge issues, the mine promised to investigate construction of a 52-mile water pipeline that would move Red Dog discharged water to the Chukchi Sea. That pipeline work will start after completion of Aqqaluk permitting, which will provide another 20 years of mine life at Red Dog, Kulas said.

"In the settlement agreement involving the pipeline, we thought we had resolved the issue in seeking to have peace with the five individuals from Kivalina, but at the end of the day, they joined back in to appeal," he said.

Two village organizations have also joined the appeal, as well as two environmental organizations and two legal firms. The appeal process "could take up to two years to be resolved," Kulas said.

The mine may shut down after this summer's shipping season, after customer contracts for the mineralized concentrate are satisfied.

"We don't have enough ore to carry us forward," he said. "This summer, we will treat and discharge water and while the appeal is going on, we will treat and discharge water, so what is gained? It's very frustrating and our employees are worried."

Tours of two operating mines and one exploration project were also included in the mining conference. Groups visited the Pogo mine and the Fort Knox open pit gold mine near Fairbanks, and the Livengood gold exploration project at that historic mining camp located about 70 miles north of Fairbanks.

At Fort Knox, visitors viewed the recently completed valley fill heap leach processing facility, which contributed 7,400 ounces of gold in the fourth quarter of 2009. Gold dore' produced by the heap leach is segregated from gold produced by the mill at Fort Knox, according to mine managers, providing quality and grade information for the new processing method.