Red Dog Mine owners sue borough over severance tax

The Delong Mountain Transportation System, financed by AIDEA, was opened in 1990 to serve the Red Dog Mine. It includes this 52-mile gravel industrial haul road from the mine to the port facility. (Photo: AIDEA)
The Delong Mountain Transportation System, financed by AIDEA, was opened in 1990 to serve the Red Dog Mine. It includes this 52-mile gravel industrial haul road from the mine to the port facility. (Photo: AIDEA)

A world-class zinc mine operating in northwest Alaska is suing the Northwest Arctic Borough, claiming the municipality has enacted an unfair severance tax.

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Teck Alaska Inc. claims the tax will double or triple payments by the Red Dog Mine to the borough.

Messages left with the borough mayor’s office today were not immediately returned.

The company seeks a court order for borough officials to negotiate in good faith.

The tax would replace a “payment in lieu of taxes” system set up before the borough developed a tax code.

Teck Alaska paid $11.6 million to the borough in 2015. The company estimates the severance tax would increase that to as much as $40 million.

Teck says the tax falls on just one taxpayer for a product sold exclusively in foreign commerce.