Placer Mining Big Business in Alaska, Report Finds

Placer mining operations bring in over $100 million a year in Alaska. (Photo: Alaska Mining Association)
Placer mining operations bring in over $100 million a year in Alaska. (Photo: Alaska Mining Association)

Most placer mining operations in Alaska are small, but combined they bring in more than $100 million a year. That’s according to a new study from the Alaska Miners Association looking at the economic impact of placer mine operations across the state.

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In 2013 alone, the report finds placer mining—or the mining of streambeds and other deposits carried by water or erosion for minerals—was active in nearly 300 operations around the state, about 30 percent of which are in Nome. Alicia Amberg, the deputy director of the Alaska Miners Association, said it can be difficult to describe a “typical’ placer operation, but many have elements in common.

Placer mining operations in 2014. (Image: Alaska Miners Association via the McDowell Group)
Placer mining operations in 2014. (Image: Alaska Miners Association via the McDowell Group)

“Most of our placer mining operations in the state mine for gold,” Amberg said, referring to the new report. She added most are “in remote locations” not accessible by road, with miners relying instead on plane or ATV. “Our average amount of employees on the placer operations in the state are around four,” with many family-run operations, she added.

For years, placer mining has been a steady trade for small-scale operations, but exact numbers as to how many people engage in placer mining, and just how much money placer operations generate has been hard to know. The new study commissioned by the AMA from research firm the McDowell Group combines a statewide survey of miners with data from the Department of Natural Resources to shed light on just how big of an economic engine placer operations truly are.

“The big takeaway from this report is that there is a significant economic impact of placer mining in the state of Alaska,” Amberg said. “That’s jobs, revenue, money that is spent in our state, and that … placer mining truly is the seventh ‘large mine’ in the state of Alaska.”

The reports finds placer operations directly employ up to 1,200 workers every year. Most are seasonal jobs, and more than 70 percent of workers are Alaska residents. And the report says the operations pay well, too, with more than $65 million in goods and services spent keeping the operations going, of which nearly 90 percent is spent in-state.

Sale tax revenue from the City of Nome. (Image: City of Nome)
Sale tax revenue from the City of Nome. (Image: City of Nome)

Barb Nickels with the Nome Chamber of Commerce said that is consistent with what they see on the ground in Nome during the busy summer mining season.

“The economic impact of mining to our Nome economy is certainly positive,” Nickels said, reading from a prepared statement. “Jobs have been created for many local residents. Multiple local businesses that provide goods and services have reported increased sales and income during these months. Even the businesses that offer the daily needs such as our grocery stores and restaurants have reported increased sales.”

That’s partially borne out by the City of Nome’s own figures, which shows a peak in collected sales tax during the summer, with the numbers generally peaking higher every summer for the last five years.

Deantha Crockett, the Executive Director at AMA, said even as placer mines disappear elsewhere in the country, the report shows they are still a viable mining option in Alaska.

“There are far fewer placer miners today in the United States than there were three or four decades ago, and frankly, 99 percent of them are in Alaska,” she said. “We’ve got this vibrant industry that, there’s a perception out there should be a historic practice … that’s not the case here in Alaska. It’s a healthy industry and it has really important economic impacts.”

The State of Alaska also makes money of active placer minds through royalties, taxes, claim rentals, and other fees, but the AMA cites “confidentiality issues and other data restrictions” as keeping an exact dollar estimate for that state revenue out of the report.