mining

A new paper by ISER faculty, Professors Matt Berman, Bob Loeffler, and Jennifer Schmidt, describes some of the long-term effects of the Red Dog Mine on local workers and communities.  The researchers used a unique data set to follow workers at the Red Dog Mine from local villages for 14 years.  The research focused on these questions:  what percentage of the mine workers live within the region, and what percentage of the total payroll do local workers receive?

A new report by Bob Loeffler and Jennifer Schmidt of ISER looks at jobs and income residents of small Bristol Bay communities received during exploration at the proposed Pebble mine site from 2009 through 2012. That proposed mine is enormously controversial, because of its proximity to the world-class Bristol Bay salmon fisheries, and there has been no exploration since 2013. The authors emphasize they are neither endorsing nor opposing the proposed mine. Rather, they assessed the economic effects of Pebble exploration on local communities as a case study in how small, remote communities can capture more of the benefits of rural resource development.

They found that about 43% of the workers at the Pebble exploration site from 2009 through 2012 were residents of 18 small Bristol Bay communities. That totaled about 300 Bristol Bay residents over the four-year period. Residents of the seven communities closest to the exploration site got the most jobs and income, averaging 100 jobs a year and bringing nearly $1.5 million into their communities annually. Almost all the jobs were seasonal, and pay averaged $19 an hour.

Download the summary (PDF, 454KB) or the full report (PDF, 2MB). If you have questions, get in touch with Bob Loeffler at rloeffle@alaska.edu or call 907-250-4621. You can also contact Jennifer Schmidt at jischmidt0@gmail.com or call 907-786-5497.

How do taxes and other revenues the state government collects from the commercial fishing, mining, and tourism industries compare with what the state spends to manage them? That’s the question the Alaska Division of Economic Development asked ISER researchers Bob Loeffler and Steve Colt to answer. In a new study, the researchers report their findings, but they first emphasize that their study is not a broad analysis of all the benefits and costs of these industries, which would also weigh many other factors—including the substantial income and thousands of jobs the industries generate for Alaskans. The researchers also point out that the state’s management goals for these industries include many things besides collecting taxes, and that their study does not say anything about what taxes on these industries should be.

The authors found that commercial fishing, mining, and tourism all generate combined state and local revenues in the same ballpark—averaging about $120 million to $135 million annually in recent years. All three industries pay more in combined state and local taxes than the state spends to manage them, with revenues from tourism and commercial fishing particularly important to local governments: 60% of the revenue from tourism and 40% from fishing goes to local governments. Counting only state revenues (excluding local revenues), the state spends more to manage fishing than it collects from the industry. State revenues from tourism roughly equal what the state spends for management. Mining brings in about six times more than the state spends to manage it.

Bob Loeffler is a visiting professor of public policy at ISER, funded by a grant to the University of Alaska Foundation from the Council of Alaska Producers. Steve Colt is a professor of economics at ISER. The report findings are those of the authors, not ISER, the University of Alaska Anchorage, or the research sponsors.

Download the summary (PDF, 734 KB) or the full report (PDF, 2.6 MB), Fiscal Effects of Commercial Fishing, Mining, and Tourism. If you have questions, get in touch with Bob Loeffler at bobl@uaa.alaska.edu or 907-250-4621.

A recent issue of the Economic Development Journal is devoted to articles about Alaska’s economy and includes three by ISER faculty members Gunnar Knapp, Bob Loeffler, and Mouhcine Guettabi. The journal is published by the International Economic Development Council (IEDC), and this issue was released ahead of IEDC’s annual conference, held in Anchorage in October. The articles by ISER faculty are now available on the ISER website, with permission of the publisher.

Resource Revenues and Fiscal Sustainability: Lessons of the Alaska Disconnect (PDF, 522.9KB), by Gunnar Knapp, ISER director and professor of economics

Mining and Sustainable Communities: A Case Study of the Red Dog Mine (PDF, 482KB), by Bob Loeffler, ISER visiting professor of public policy

The Determinants of Small Business Success in Alaska: A Focus on the Creative Class (PDF, 240.6KB), by Mouhcine Guettabi, ISER assistant professor of economics

Read more to find summaries of the articles.

Jason Prno, a PhD candidate at Wilfrid Laurier University in Waterloo, Ontario, will discuss why mineral developers today need “social licenses to operate.” A social license is society’s broad approval and acceptance of a mining project, and developing such a social license can help companies avoid the substantial problems that can result from community protest and disapproval. But there are complexities in establishing social licenses, and Jason Prno will discuss those in the context of mining case studies from the Yukon, Alaska, Peru, and Papua New Guinea. 

A new paper by Bob Loeffler, visiting professor of public policy at ISER, examines whether valid assessments of the ecological risks posed by mining projects can be done at the pre-design stage—that is, before a mining company submits a detailed mine design to government regulators. The author draws conclusions by analyzing three existing ecological risk assessments for mining projects in Alaska: post-design assessments for the Kensington and Red Dog mines and a pre-design assessment for the proposed Pebble mine.

As part of the Alaska Miners Association convention, on Tuesday November 8th, Bob Loeffler is teaching a 1-day short course labelled "Mining 101: An Overview of the Mining Industry." It is designed to provide a basic overview of the industry — what a mine is, property rights, permitting, environmental issues, economics, etc.

If you are interested, check out the flyer announcing the course. You may sign up on the website indicated on the flyer. The cost is $150 (or $175 if you register after October 15th), or $25 for students. 

*Note: Look for "SHORT COURSE #3."