FAIRBANKS – Alaska’s vast stores of critical and strategic minerals pose a enormous potential for development, for thousands of new jobs and millions of dollars into the state, but there are number of challenges before that potential can be realized.
That was the message at the second annual Strategic and Critical Minerals Summit on Friday in Fairbanks, a gathering of state and industry officials to discuss the emerging field of rare earth mineral development.
The first summit last year promoted Alaska’s potential to become a new domestic source of minerals like yttrium and cobalt, which are critical in developing everything from military grade weapons to clean-energy technology and cellphones.
This year’s summit shifted the focus toward the issues that stand between a growing number of discovered stores of resources and the market.
Curtis Freeman, the president of Alaska-based Avalon Development Corporation, said Alaska may have plenty of minerals but said businesses need to see a profit before they will invest.
“We are endowed with an awful lot of potential and an awful lot of elements. There are some very good places to go look, and there are other places that are not worth my time,” he said. “The main thing in the private industry is to make a profit. If you can’t make a profit then you’re not going to do it.”
Freeman was joined by other speakers in outlining several challenges, including the difficult federal permitting process, the high cost of doing business in Alaska, difficult access and energy issues as well as the difficulty of entering the rare earth minerals market.
Other countries with lower environmental standards and cheaper labor have largely controlled much of the market. China produces nearly all of the world’s rare earth elements.
Another problem is that the world demand for some minerals is relatively small and any new production would send prices plummeting.
“If you are a would-be producer putting too much of a good thing on the market is not too much of a good thing any more,” he said.
However, he said that doesn’t mean Alaska will have to miss out on the increasing demand of rare earth elements. It means that developments in technology and policy changes will be critical in making investment more profitable. Developers will also have to seek out denser formations.
“This is a very well-endowed state, and we’re going to have to look for higher unit rock,” he said.
One example of that is in the Bokan Mountains mining development in Southeast Alaska. That’s being pursued by the Canadian UCore Rare Metals Inc.
Ken Collison, the Chief Operating Officer of UCore, spoke at the summit and said the Bokan Mountains could be an incredible investment because of its high concentration of valuable heavy rare earth elements.
Where most deposits have just 2 or 3 percent of heavy elements in rare earths, the Bokans have nearly 40 percent. Heavy elements can sell for thousands of dollars a kilogram, where light elements will sell for less than $100.
That, paired with new developments in technology, mean the mine has an estimated return on investment of 43 percent.
“It’s a heck of a project,” Collison said. “We’ve got a deposit with a high percentage of heavier earths, we have a project with very robust economics, a small foot print, no tailings above ground and technology results in production on site and a new opportunity for Alaska.”
Contact staff writer Matt Buxton at 459-7544 or follow him on Twitter: @FDNMpolitics.