Ucore: Bokan Mine plans moving forward

The Canadian company exploring the potential of a rare-earth mine in southern Southeast Alaska has completed the project’s scoping document, and it appears promising that Ucore will develop the Bokan Mine on Prince of Wales Island.

Randy MacGillivray, community relations director for Ucore, gave an update about the project during a recent Ketchikan Chamber of Commerce lunch.

All numbers are estimates, and are subject to change. That cautionary note kicked off MacGillivray’s presentation, which was otherwise upbeat about the economic viability of the Bokan Mine, located on the western end of Kendrick Bay on Prince of Wales.

And what would the mine produce? Rare earth elements: a group of difficult-to-pronounce metals used in constructing high-tech products such as cell phones, hybrid vehicles, wind-power generators and Department of Defense projects.

China now produces about 95 percent of rare-earth elements, but keeps most of it for production needs within that country.

“A critical thing about rare earth elements is there are two sub-classifications: Light versus heavy,” he said. “The Bokan project is skewed toward the heavy rare-earth elements. That’s significant from an economic standpoint because of the relative value of heavy rare-earth elements versus light rare-earth elements.”

MacGillivray pointed out that most rare-earth elements aren’t all actually rare. The heavy ones are, though, which makes them about 200 times more expensive than the most valuable light rare-earth element.

That means the return on investment is expected to be high, about 43 percent. The capital costs of the mine will be about $221 million, and investors should get their money back in less than three years once production begins.

And when will that be? Well. Ucore is about to start the permitting process with the U.S. Forest Service, so it’s unclear. The company also needs to start a more definitive feasibility study, which will include agreements with potential future customers.

Once it does start, though the mine will produce 1,500 tons of unprocessed rock per day, employing between 170 and 200 people. MacGillivray said they are committed to local hire, and for selfish reasons, too. He said there’s a lot of turnover in the mining industry, which can cut into profits.

“So as opposed to us bringing people from Nevada and Montana who are excited about coming to Alaska and seeing what Alaska’s all about and working here for a while, we want to make sure that we get local people who have families here who know the climate and the situation and are well adapted to staying and becoming long-term employees,” he said.

The mine won’t just extract rock. The processing facility also will be on site. Crushed rock will go through two sorting lines, one using X-rays to separate waste rock from pieces containing the desired metals; and one using magnets to further separate the rock. That’ll bring the amount to be chemically treated down from the 1,500 tons mined to about 350 tons.

The big question in any mining venture is what about the tailings: The stuff left over after the elements have been chemically separated from the rock?

“This is a very unique project, in that all of our milled tailings will be put back underground,” he said.

The processed tailings, mixed with some of the unprocessed waste rock, will be blended into a cement mixture, and used to backfill the mine shafts. That means no tailings left on the surface.

An audience member asked whether any underground streams could carry contaminants to the ocean. MacGillivray said there is groundwater, but Ucore has plans to channel and treat that water.

But, Guy Archibald of the Southeast Alaska Conservation Council said the safety of such a process is unknown.

“This is very new technology and it has not withstood the test of time,” he said. “How that weathers underground, given groundwater conditions, has yet to be determined. So how safe this technology is in the long run, nobody knows yet.”

Archibald said a study shows that groundwater can leach contaminants such as heavy metals, just like any other tailings. In addition, he said, the waste rock that hasn’t been processed also is potentially dangerous.

“Some of this rock is going to be radioactive, because we’re near the old Bokan Mountain uranium mine, the Ross Adams mine,” he said. “They’re not saying at all how they’re going to handle this material.”

Archibald said that while there are concerns, SEACC isn’t necessarily opposed to the potential mine. He said the group just hopes that any development will be done in a responsible manner.

Ucore does have a “community plan” in the works. MacGillivray said he wants to write that plan with input from area business owners, to make sure the mine can be built and managed to maximize local benefit. He expressed appreciation for Ketchikan’s interest in the project.

“I lived in Juneau from ‘96-‘99, and worked at Kensington from 2002-2006, and it’s pretty nice to come to Ketchikan,” he said.

Once up and running, the Bokan Mine would need between 4 and 6 megawatts of power. That would be generated on-site, although if a road to the mine is approved, a hydroelectric power line is possible in the future. Sen. Lisa Murkowski has introduced a bill in Washington, D.C., to allow such a road, which would go through designated roadless areas.

Rare-earth mining also is on the minds of state lawmakers. The Alaska Senate just approved a resolution that calls on the state to identify deposits, develop an informational database and promote development of the industry through a streamlined permitting process. That resolution still needs to pass the state House.