Northwest Arctic Borough to receive almost $200 million over 10 years from Red Dog Mine

The Red Dog Mine in 2010. (Alaska Public Media file photo)

After a Borough meeting Tuesday night, a new payment in lieu of taxes (PILT) agreement has been struck between the Northwest Arctic Borough (NAB) and Teck Alaska, the operator of Red Dog Mine.

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For the next ten years, the borough will receive annual payments from Teck Alaska based on a fixed asset value of Red Dog mine. The payments are estimated to be between $14 and $18 million per year. Previous payments were $11.6 million annually. Wayne Hall, superintendent for environment and community relations with Teck Alaska, explains the annual payments to NAB have increased since the previous agreement.

“There was a previous PILT agreement that was for five years, which expired a year and a half ago and we’ve been under a severance tax until this new agreement has come into effect with the approval of the ordinance on Tuesday,” Hall said.

In addition, Teck Alaska will create a Village Improvement Fund to be distributed by the Borough towards community services and infrastructure, with input from its eleven villages. The fund will be opened with $11 million and will receive $4-8 million per year based on a certain percentage of Red Dog’s gross profits.

The total payment will be $20 to 26 million per year. Hall said it’s also a retroactive agreement, dating back to January 1st of 2016.

Red Dog Mine sits on land owned by the NANA regional corporation and has been in operation since 1989.

According to the corporation’s website, during the mine’s existence NANA has received $1.3 billion in net proceeds payments from the mine and distributed $820 million of that to other shareholders and corporations.

The Northwest Arctic Borough Assembly approved the new PILT agreement on Tuesday night following a public hearing.

Davis Hovey is a news reporter at KNOM - Nome.

Hovey was born and raised in Virginia. He spent most of his childhood in Greene County 20 minutes outside of Charlottesville where University of Virginia is located.

Hovis was drawn in by the opportunity to work for a radio station in a remote, unique place like Nome Alaska. Hovis went to Syracuse University, where he graduated with a Bachelor’s of Science in Broadcast Digital Journalism.

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