Eleven villages within the Northwest Arctic Borough will soon decide how to better their infrastructure through yearly payments from Teck Alaska, the operator of Red Dog Mine.
This year, $11 million of profits from Red Dog Mine will be invested into a Village Improvement Fund (VIF), as well as between $4 and 8 million annually for the next nine years. Although it is unclear how the VIF will be used at this time, Northwest Arctic Borough’s Chief of Staff, Patrick Savok, assures that each community will have a say.
“We are needing to come up with an advisory council of one individual from each community to have a say on how this money will be spent in the communities. The two main stipulations of the agreement, after establishing this Village Improvement Fund, are targeted at critical infrastructure and programs for the eleven villages,” summarized Savok.
In accordance with the Borough Assembly’s policy, a new 10-year Payment in Lieu of Taxes (PILT) agreement between Teck Alaska and the Northwest Arctic Borough was voted on and approved during a public meeting last month. Savok says the general consensus in the room was positive:
“We did receive three phone calls and one visitor to comment on this acceptance, and they were in agreement. One was former mayor Reggie Joule, who was integral to the Borough severance tax.” Savok continued, “Also, former mayor Martha Whiting called in and expressed her appreciation for moving forward.”
Besides Teck Alaska and Northwest Arctic Borough, the NANA corporation will continue to receive benefits from Red Dog Mine. Senior Director of Corporate Communications for NANA Amy Hastings says the corporation currently gets a certain percentage of the mine’s net profits, but not through the PILT agreement.
“It’s 30%. That’s part of our agreement with Teck, and so, that 30% would only become greater as their profits rose,” stated Hastings.
Both Savok and Hastings commented positively on the sustainability and longevity of Red Dog Mine. Hastings suggested that the zinc being mined at Red Dog is reliable right now, in spite of its fluctuating market prices.
“Even now, even with zinc being at a nice level in terms of market value, currently, it’s a very volatile market; we have a very small window of opportunity to get the zinc concentrate out of Alaska and to the various factories where it is processed,” explained Hastings. “This high that we are currently experiencing has been expected for quite a few years; we are also expecting, again, significant dips based on market conditions.”
For the Northwest Arctic Borough, Red Dog Mine is one of, if not the main source of, funding at this point in time, in addition to State grants. Savok says that has been more of a recent change in the Borough’s revenue.
“Well, we’ve always looked to Community Revenue Sharing, however, with the shift over to a Community Assistance Program, and we know that the Governor has stated they are cutting back by 50% already; that is our other main source. I know we’ve got some permitting fees, but those are very very small compared to some of these other ones,” said Savok.
It is unclear when the advisory council will be formed with representatives from each Borough member village: Buckland, Kivalina, Kotzebue, Noatak, as well as Kiana, Noorvik, Selawik, Deering, and then Ambler, Kobuk, and Shungnak.
However, Savok says the administration and the Borough Assembly are looking forward to putting the funds towards village projects in the near future.