Red Dog, the world's largest zinc and lead mine, is about 90 miles north of Kotzebue. The mine is operated by Teck Cominco on land owned by NANA Regional Corp.

AIDEA is the state's economic development corporation. It uses income from revenue-producing assets and investments to help finance economic development activities.

The authority helped NANA and the mining company develop the mine in the late 1980s by financing and building a 57-mile access road and a port on the Chukchi Sea coast where ore from the mine is stored and shipped by bulk ocean carriers during the summer months.

Leonard told the board June 25 that the latest proposal offers to buy the road and port outright, but also contains an alternative of forming a partnership with AIDEA in owning the facilities.

The effect would be that part of the approximate $10 million a year in net revenues AIDEA earns on the facilities would go to the Northwest Arctic Borough. Total revenues to AIDEA are about $20 million a year, but about half of this goes to pay debt service on bonds issued by the authority, Leonard said.

Northwest Arctic Borough Mayor Martha Whiting told the authority's board June 25 that the borough would see the partnership with AIDEA on the Red Dog road and port as the first of several economic development ventures the borough and NANA Regional Corp. could do with the authority in the area.

In one example, NANA is engaged with a mining company in possible development of copper in Bornite, on the Kobuk River, Whiting said. The borough and NANA also hopes to work with Arctic Slope Regional Corp. and the North Slope Borough in development of large coal resources on ASRC lands about 80 north of the Red Dog mine, she said.

Both will require development of major infrastructure, in which AIDEA could share.

Whiting said the borough has a $10 million annual budget, most of which goes to fund schools in the region. The Red Dog Mine is now the biggest source of revenue through in-lieu tax payments made by Teck Cominco.

More local revenues are needed, however, because of rising school costs and reductions in state revenues over the years, Whiting said.

Walter Sampson, president of the Northwest Arctic borough assembly, said the state has encouraged the formation of municipal governments over the years as a way of encouraging local autonomy, but in recent years has left many without the resources and tools to continue functioning.

In another development, AIDEA's staff told the board of a proposal to expand and improve the Skagway ore terminal as part of a larger improvement program being done with the Skagway Borough. AIDEA and the Skagway Borough will apply for federal stimulus funds to finance the project, the board was told.

"AIDEA's part of the project involves about $24 million in modifications to the terminal," said Jim Hemsath, AIDEA's deputy director for development. "Plans are to expand the enclosure that stores ore, upgrade the terminal's electric and dust collection systems and to replace the ore-loading unit so that the process will be done more efficiently."

The borough's project involves dock improvements and development of an intermodal rail/marine facility, and is budgeted at $40 million to $50 million, he said.

Tim Bradner can be reached at tim.bradner@

alaskajournal.com.