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3/22/2014
SB99 holds millions for Southeast area

By NICK BOWMAN

Daily News Staff Writer

A bill in the Alaska Senate includes the potential for $270 million in state funding for two proposed mining projects in Southeast Alaska.

Senate Bill 99 would allow the Alaska Industrial Development and Export Authority to issue bonds to finance infrastructure and construction costs of the proposed Bokan-Dotson Ridge rare earth mine and the proposed Niblack mine.

AIDEA, which owns the Ketchikan Shipyard, may issue $145 million in bonds to support the Bokan mine and $125 million for Niblack.

Sen. Bert Stedman, R-Sitka, added the amendments to SB99.

"I’m proud of the Legislature for doing everything it can to promote economic development opportunities in Southeast," Stedman said in a statement on Friday. "We need these important projects to move forward so our residents have good, livable wage jobs."

The amendment concerning the Niblack project includes infrastructure on Gravina Island, where Heatherdale Resources, the Canadian firm behind the mine, has considered processing the copper, silver and gold ore from Niblack.

The former Gravina saw mill site has been identified as potential processing plant. The Ketchikan Gateway Borough signed an agreement with AIDEA and Heatherdale in 2013 laying the groundwork for work on the neighboring island.

However, Heatherdale has put the project on hold while it decides whether the economics of the project will pencil out.

Bokan’s amendment also states that AIDEA would own and operate the surface complex or finance it from the state’s revolving economic development fund.

China controls most of the world’s rare earth mineral supply, and has been ratcheting down production in recent years.

"As China continues to withdraw its supply of rare earth elements from the world market, we need to be ready to fill those supplies or we will see devastating economic consequences," said Sen. Lisa McGuire in a statement.

SB99 was passed out of the Senate Labor and Commerce Committee, with Stedman and Sen. Peter Micciche, R-Kenai, recommending passage. Sen. Donald Olson, D-Golovin, had no recommendation, according to state records.

The bill was referred to the Senate Rules Committee on Friday.