January 24, 2013 | Volume 43, No.3

Mining trip: Necessary or junket?

Some Haines Borough officials are questioning whether the borough is spending its time and money wisely by sending three public officials to a Canadian mineral exploration conference.

Borough Manager Mark Earnest, executive assistant to the manager Darsie Culbeck and assembly member Steve Vick are scheduled to travel to Vancouver, B.C., Jan. 28-31 for the Mineral Exploration Roundup conference.

Assembly member Debra Schnabel and Mayor Stephanie Scott have expressed reservations about the usefulness of sending borough officials – especially three – to the conference this year.

Last year, Schnabel and Culbeck attended Roundup, an annual trade show attended by government officials, organizations, and mining companies. Attendees gather information about the mineral development and mining industries, observe technical demonstrations, and make business contacts.

During their 2012 trip, Schnabel and Culbeck gave a PowerPoint presentation describing the attributes of the Lutak Dock, such as its location and potential as a deep-water port.

They also gathered information on prospective mineral developments in the Yukon, what transportation systems potential developers would use, and what kind of ports mining industries normally go for. Using information gathered from the trip, the borough decided to contract with Northern Economics, which conducted a comprehensive study of the Lutak Dock, including potential customers, and released its report last fall.

“If you read (the report) carefully it says, ‘Yes, do whatever you need to do to the Lutak Dock to make it stable and make sure that it’s good for the users. But don’t start talking to AIDEA (Alaska Industrial Development and Export Authority) about building an ore terminal, because there’s no point in it,’” Scott said.

Earnest said he interpreted the report’s recommendations differently. In the short-term, the borough should focus on improving the existing infrastructure, but that is not exclusive of planning for any future of mid-term developments, he said.

Schnabel said she was surprised the administration chose 2013 as a strategic year to send three borough officials to Roundup, especially after the Northern Economics report was released.

“All the players are currently known. Anybody who reads that report doesn’t read it and say, ‘I need to get on a plane and go to Roundup’... It seemed to me in a reading of the report that we don’t have to be very aggressive about marketing because the mining industry will identify us with plenty of time to do the development work,” Schnabel said.

Schnabel said the administration’s move to send three people “looked like a junket,” although she acknowledged something productive could possibly come of it.

Chief fiscal officer Jila Stuart estimated the trip will cost the borough $4,680. It will be paid for by the borough’s Lutak Port Development Plan grant, she said.

“I am not convinced that going to Roundup is the best use of our grant money,” Scott said.

Earnest said he thinks the trip is a wise use of resources because it keeps Haines in the loop on potential mines in the Yukon. “I would say of all of our potential opportunities for economic diversification, this is probably the one that has the greatest potential to do the most good in the short term,” he said.

“We’re faced with state and federal budget cuts. They’re happening now. And I can’t see the situation reversing any time in the short or long term... people like the Chilkat Center, they like the pool, they like the library, they like the museum, they like education funding. That money has to come from somewhere,” Earnest said.

When asked why the borough had to send three officials instead of just one, Earnest responded, “Because it’s that important.”

Vick said the three would probably split up frequently to attend events scheduled at conflicting times. Vick said he is looking forward to gathering information and asking questions, and that attending Roundup is key to Haines “keeping its hat in the game.”

“I think it’s important for Haines to at least be in the conversation so we know what the potentials are and the direction things seem to be going. Especially in the Yukon, because there’s so much resource development going on there,” Vick said.

Culbeck was out of town and could not be reached for comment.

Instead of sending three public officials to Roundup, Scott said the borough should be posing the question to itself, “Under what conditions or circumstances, if any, should the Haines Borough promote the development of an ore terminal?”

Scott speculated answers could include if the terminal is built on public property, if the mining company finances it, or if the ore is only going to be shipped in closed containers. “But there isn’t a mine. So we’re putting all this energy into an economic sector that doesn’t exist,” Scott said.