Donlin promises economic development if mine goes through

The proposed mine could be one of the biggest in the world — if completed. (Photo by Katie Basile/KYUK)

Donlin Gold says that it will bring money and jobs to the Yukon-Kuskokwim Delta with its proposed mine.

The company wants to build one of the biggest gold mines in the world, and it promises to employ hundreds of local people to build and operate it.

The mine will bring 3,000 jobs to the region during construction, and 800 jobs annually to operate it. The total payroll is $375 million for the construction phase of the mine which, according to Donlin spokeswoman Kristina Woolston, would last roughly four years.

The Kuskokwim Corporation, a village corporation, and Calista Corporation own the land and mineral rights, and leased them to Donlin Gold two decades ago. In return, Donlin promised that their shareholders will get preference for jobs.

“We’ve had drilling programs at the site in the past, and we actually have a drilling program at the site this summer that will give us the opportunity to further train and hire local employees and folks at the project site that can be transferred to future operations,” Woolston said.

Communities in the Y-K Delta are some of the most remote in Alaska, and among the poorest. Jobs are hard to find in the villages and usually come from government, school districts or health care. Food costs are exorbitant, and fresh fruit and vegetables are hard to find in village stores. People in the region often rely on subsistence gathering of food like berries, fish and game meat, but practicing subsistence requires money too.

Andrea Gusty is the chief of staff for The Kuskokwim Corporation.

“We’re hearing from some of our shareholders in the smaller communities like Red Devil, where they don’t have any economic opportunities at all right now, and they’re finding it hard to continue that subsistence way of life,” Gusty said.

TKC oversees 10 villages in the Upper Kuskokwim area closest to the Donlin mine site. They own the surface rights to the proposed mine.

Gusty said that jobs are not the only form of economic growth for the region to come from the proposed mine. Donlin has promised a contracting preference with Calista and TKC subsidiaries to build the mine’s infrastructure. That’s a legal agreement that says that Calista and TKC subsidiaries get preference if they meet bidding requirements.

“We have a number of contracts that were negotiated in the surface mine agreement. One of the largest ever for TKC is that we will own and operate the upriver port site. And so there will, of course, be a shareholder hiring preference for that,” Gusty said.

Calista says that the Red Dog mine further north is an example of one that benefited Native corporations and nearby communities.

Rosie Barr is the vice president for lands and natural resources at Calista. Before that, she held a similar position at NANA Regional Corporation, which owns the mineral rights for the Red Dog mine. She grew up in Kivalina and Kotzebue, surrounded by the promise of jobs that Red Dog would bring these communities.

“I didn’t go to work at Red Dog, but my older brother David did. They had a fantastic apprenticeship program, and he worked his way up through the electrical program,” Barr said.

2015 report written by Robert Loeffler, a professor at the University of Alaska Anchorage’s Institute of Social and Economic Research, says that 57% of the mine’s employees were NANA shareholders. But less than half of those shareholders lived in the nearby villages; the rest commuted from Anchorage or elsewhere.

Then there’s the revenue Donlin could bring into the region. Donlin has two separate revenue sharing agreements with Calista and TKC, which are confidential. Those agreements are in addition to the revenue-sharing requirements under the Alaska Native Claims Settlement Act, or ANCSA. The ANCSA agreement requires Calista to share 70% of the revenue from resource development from their land with the other regional corporations that own land. Calista gets some of that money back, then it shares some of that with village corporations in the area.

Donlin’s opponents say that the mine is not the best economic choice for the Y-K Delta.

Peter Evon is the executive director of the Orutsararmiut Native Council in Bethel. ONC led the first march against Donlin Gold last summer. Evon said that he knows the region needs jobs, but he thinks that there are other ways to create them.

“There are a lot of opportunities that haven’t been tapped into, but I think Donlin was the wake-up call for some people to start looking into different avenues. There’s a lot of different areas. We’re not robust. We’re not the North Slope,” Evon said.

Initial funding for these projects can be hard to find, but Evon said that Y-K Delta communities shouldn’t give up. Some communities, like Kwigillingok, have invested in renewable energy projects that create jobs, but the question is whether more communities will prefer to try out these more localized projects over the promise of hundreds of jobs from a mine.