Australian mining firm explores potential vanadium deposit near Juneau

An Australian mining company has applied to the U.S. Forest Service for a round of exploratory drilling for a rare element about 35 miles southeast of Juneau.

Northern Cobalt, Ltd. is looking for vanadium in Southeast Alaska. It’s a rare mineral that has commercial value for use in steel alloys and state-of-the-art rechargeable batteries used in industrial plants and power grids.

A recent promotional video by the mining company touts the economic potential for a “vanadium bearing magnetite system” it says is consistent with many of the economic vanadium deposits currently in production around the world.

The project site is on Snettisham Inlet in the Tongass National Forest southeast of Juneau.

The mine claims are near Snettisham southeast of Juneau in the Tongass National Forest. Recent filings with the Forest Service say the land has no active federal mining claims.

The company’s managing director Michael Schwarz says that makes the site “free ground.”

“I guess the obvious question is, well, if it’s in a vanadium project, why was this free ground?” he said in a video shared on the company’s site, “and the answer to that is that this has in the past been looked at as an iron ore project.”

Exploratory drilling for iron ore occurred in the area as recently as 2012. But a collapse in iron prices scuttled those efforts and the claims were abandoned.

Northern Cobalt flew aerial magnetic surveys in February. Schwarz says an iron ore mine wouldn’t pencil out.

“But if you look at the value of the vanadium in the system, you can see that there is a lot of potential in this project,” he said.

The promotional video touts the region’s access to deep water shipping. And Schwarz says the proximity to a power station would be key for any future mine.

“We are very lucky in this position in that there is a hydroelectric power station within kilometers of the project,” he said. “And the main transmission line runs within one and a half kilometers of the project itself.”

He’s referring to the Snettisham Hydroelectric Project. It’s a state-owned power plant that’s operated and maintained by Alaska Electric Light & Power which buys and resells its electricity to supply Juneau’s grid and other customers including Hecla Greens Creek, a metals mine on Admiralty Island.

The private Juneau-based utility says it wasn’t aware of any interest to tie-in in that region.

“AEL&P has not been contacted about the potential development of a mine in Snettisham Inlet,” company spokeswoman Debbie Driscoll wrote in a short statement.

Now, the U.S. Forest Service is reviewing an application for a drilling permit. Northern Colbalt envisions three bore holes in August. The deepest would be about 1,400 feet.

Agency officials in Washington D.C. declined CoastAlaska’s request for an interview with regulators reviewing the permit application.

But in a statement, the Forest Service said a reclamation bond would be required before drilling is allowed.

“Our biologists and other specialists will analyze the scope of activities to ensure the well-being of involved ecosystems, and require changes or additional mitigation measures to the proposal as necessary,” wrote Forest Service spokesman Paul Robbins, Jr. in Ketchikan.

The Forest Service is accepting public comment on the drilling permit application through July 26.

Jacob Resneck is CoastAlaska's regional news director in Juneau.

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