New US climate law could lead to a mining 'renaissance' in Alaska, drawing excitement and concern

Sep. 6—ANCSA, Ambler Metals, Ambler Mining District, Bornite, Bornite Mine, mine, mining

This spring, a small Australian prospector sent geologists to a state warehouse to scour old rock collections.

The geologists leveled handheld scanners over samples of rock pulled from shelves at the Alaska Geologic Materials Center in Anchorage, drilled in the Cantwell area decades earlier by other mining companies.

They found what Discovery Alaska described to shareholders as the "widespread presence" of lithium, the mineral used in rechargeable, lithium-ion batteries for everything from iPhones to electric vehicles.

Whether the lithium can be profitably extracted won't be known for a while, said Jerko Zuvela, the company's director "A lot more exploration needs to be done," he said.

But the hunt for the mineral highlights the world's growing interest in the so-called critical minerals used in the solar panels, wind turbines and electric vehicles that increasingly power the global economy.

Geologist Kurt Johnson

The nation's recently passed $370 billion climate law, called the Inflation Reduction Act, is ramping up that interest in Alaska, and focusing attention on the state's mining prospects as a possible source for many of those minerals.

The law, passed last month without Republican votes, provides tax breaks that industry observers say could lead to more mining in the U.S., and Alaska. They include a 10% tax write-off of operational costs for U.S. companies producing critical minerals.

Brett Watson with the University of Alaska Institute of Social and Economic Research said the new law could potentially bring a "renaissance" to Alaska mining.

But that is only if the state can overcome the many hurdles that often slow or stop mining projects, including a lack of roads and ports, high energy and development costs, and exploration and construction timelines that can take 20 years.

"We have the rocks here in Alaska, but the question is whether or not we can capitalize on the opportunity," he said.

Opposition to mining proposals from people in the region or environmental groups is also a factor. While conservation groups on a national level celebrated the climate law as a huge victory, they are concerned about what it could mean for Alaska.

Rachel James, SalmonState

"A short-sighted chase for critical minerals in the name of climate change is not an excuse to rush to build mines everywhere, with reduced oversight and less public engagement," said Rachel James, public lands and water lead for SalmonState.

"If there is to be an increase in mining in Alaska, it needs to be done in a way where Alaskans are in the lead, and our rules and regulations reflect the fact we live much closer to our lands and waters than almost anyone, anywhere," she said. "As part of the decision-making process, some places will be identified as inappropriate for large scale mining."

Alaska leaders see opportunity

Since the act passed, Alaska political leaders have wasted no time arguing that mining in the state could help meet President Joe Biden's goal of net-zero carbon emissions by 2050.

Specifically, the Biden-backed law encourages U.S. development of 50 minerals labeled as critical by the U.S. Geological Survey earlier this year. They're considered vital economically and strategically, and at risk of supply disruption, with many controlled by China and other potentially adversarial countries.

The critical minerals in Alaska include the graphite and cobalt that join lithium and other minerals to make the lithium-ion batteries; the tin and indium used in touchscreen coatings so fingertips control apps; and zinc at Red Dog Mine, one of the world's largest deposits of the metal, used to prevent rust in solar panels and wind turbines.

Red Dog Mine Port

At a critical minerals conference at the University of Alaska Fairbanks last month, coincidentally held days after the climate law passed, Alaska politicians and others touted the state's mineral attributes and what they described as unparalleled environmental oversight. They also pressed for streamlined federal permitting.

"If you care about the environment we need to produce resources in Alaska," Gov. Mike Dunleavy said. "If you care about social justice, we need to produce resources here in Alaska. If you care about enriching people, and not dictators, we need to produce resources here in Alaska."

Conservation groups weren't on the summit's agenda, but attended it. They're concerned that the interest in more domestic minerals could lead to irresponsible mining. They're calling for stronger mining laws.

Andrea Feniger, head of Sierra Club's Alaska chapter, said she worries Alaska will be "sold out" for mining in the wake of the climate law.

"It's exciting that the (Inflation Reduction Act) has tackled a lot of climate issues, but there's a lot of scary possibilities in it for Alaska," she said.

She said the U.S. should focus on making products more efficient and recycling renewable energy components and materials — also encouraged by tax credits in the law — to reduce reliance on new mines.

Mineral diversity in Alaska 'outstrips' most other states

Under the climate law, renewable energy could support the national economy by creating more opportunities in manufacturing, said Jane Nakano, a senior fellow at the Center for Strategic and International Studies.