Things aren't all roses for the minerals industry, however. Almost all of several large mines in development, and even two that have started construction, are facing serious challenges.

Environmental lawsuits are jeopardizing two big projects. A suit against the Kensington Mine project near Juneau is now in the U.S. Court of Appeals. A state court also issued an order temporarily suspending permits issued for the Rock Creek mine near Nome. Both Kensington and Rock Creek are in construction.

Pogo, the new underground gold mine northeast of Delta, suffered a setback caused by a fire in late 2006, but operations were expected to be back to normal by the end of December. New exploration near the Pogo gold mine is turning up new, high-grade resources. This is good news because it will extend the life of the mine, which went into production last year.

Meanwhile, political controversy continues over the big Pebble copper-gold project on the Alaska Peninsula north of Lake Iliamna. By the end of 2006, the developer, Northern Dynasty Mines, was to have completed the exploration of a deep, richer ore deposit adjacent to the shallow, lower-quality deposit previously explored. The company will take the new resource data and develop an optimal mining plan, which is likely to involve both an underground and a surface mine.

However, a vigorous opposition campaign has been mounted against Pebble by a group of local sports-fishing lodgeowners backed by a wealthy Anchorage businessman, Robert Gillam, who also owns a sports lodge in the region.

The Renewable Resources Coalition is running television advertisements in Alaska warning of the dangers posed by the Pebble project, hoping to influence the public and the new state administration and Legislature. So far, new Gov. Sarah Palin said she is keeping an open mind on Pebble, although she feels it is vital to protect the region's salmon spawning streams, which support the rich Bristol Bay salmon fisheries.

Northern Dynasty meanwhile is continuing to work on gathering baseline environmental data and will submit this to state and federal agencies in late 2007, the company says. Applications for permits could be made in 2008.

Besides the political opposition being stirred up by the sports lodgeowners, a big challenge facing Pebble is securing an affordable supply of power for the mine. The current plan, being developed with Homer Electric Association, is to link the mine with the existing power grid on the Kenai Peninsula by building long-distance power transmission lines and a submarine crossing of Cook Inlet. The plan would require a new power plant to be built on the Kenai Peninsula.

Another large mine project at Donlin Creek, near the Kuskokwim River west of Anchorage, has been below the radar screen for some time. Its operator, Barrick Gold, is working toward submitting development permits in late 2007. Barrick is in a testy takeover battle with its partner in the project, NovaGold Resources, but most observers don't see this as impeding the project.

Development of the long-planned Beluga coal deposits west of Anchorage may finally be happening. The project is on the permitting track and no show-stoppers are apparent. The question is whether there will be a customer for the coal. The most likely buyers are electric utilities in Asia, although if a plan being worked on by Agrium Corp. to convert its fertilizer plant on the Kenai Peninsula from natural gas to coal proceeds, there could be a major Alaska customer for the coal. There is also a proposal under study for a large coal-to-liquids plant near the Beluga coal mine that could become another customer.

Nearby are the former Placer Dome coal leases, now owned by Barrick Gold, which also have substantial known coal resources. Barrick says a plan to develop this coal is its second-highest Alaska priority this year, after the company's Donlin Creek project.

From a longer-range perspective, two important new projects are NovaGold Resources' exploration in the Ambler mining district in the western Brooks Range and BHP Billiton's project with Arctic Slope Regional Corp. to explore the large western Arctic coal resources.

NovaGold has been working on high-grade copper resources in the Ambler area for three years now, exploring a prospect first identified and explored by Kennecott Minerals. NovaGold has an agreement with Kennecott to explore and earn an interest in the deposit.

The challenge facing the Ambler copper deposits is affordable access. The mineralized region is largely surrounded by federal land conservation units, through which it would be almost impossible to secure a transportation corridor. One potential route of access is from the Dalton Highway that runs north through Interior Alaska from Livengood to the North Slope, but a connection to the Dalton is essentially blocked by the federal land units.

The most feasible surface access may be to the west. When it was working on Ambler, Kennecott undertook a conceptual study of a possible rail link to the Seward Peninsula and a port site east of Nome on the southern side of the peninsula.

Access is also the key stumbling block for development of the large bituminous and subbituminous coal resources of the western Arctic Slope. ASRC has invested substantial sums in exploration of its coal resource and even developed a small test mine. BHP just became involved in the western Arctic and plans field work, including drilling, in 2007.

The most obvious access to the coal would be a port on the Chukchi Sea coast near the mine, but no good port site is apparent due to shallow waters along the coast. Shipping could also be done for just a few weeks of the year, when the ice cleared along the coast.

A better option would be a road or railroad linking a mine to the existing Red Dog Mine port on the coast south of Kivalina. This would involve a considerable investment in transportation infrastructure but shipping could be done for more months of the year. Also, coal could be supplied for power generation for a possible expansion of zinc mining in the Red Dog Mine region.