Alaska state agency and developers plan to spend nearly $60 million on Ambler Road and mining prospects this year

Mine developers and the leaders of Alaska’s development bank plan to spend nearly $60 million advancing a pair of mine prospects and a long, contentious road to get to them next summer.

The Alaska Industrial Development and Export Authority board of directors approved a $15.4 million budget for the 2022 work season on the Ambler access project in late January. That amount is being matched by Ambler Metals LLC, the joint-venture firm leading exploration work on the multi-metal Arctic and Bornite mine prospects in the upper Kobuk River drainage under a cost-share development agreement.

The state agency is now pushing for a final investment decision on the 211-mile Ambler Road in 2024 after nearly a decade of studying and debating the industrial access route, according to board chair Dana Pruhs.

Last year, AIDEA and Ambler Metals had a combined $70 million budget for engineering, design and other work on the road alone.

Ambler Metals will be able to use its predevelopment investments as credits against the tolls and other use fees the company would pay once the road is developed under its agreement with AIDEA.

The work will provide a range of jobs for nearly 50 local residents, according to AIDEA. Much of the work will build on the field studies and permitting work done last year, Pruhs said when the budget was approved.

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Officials with AIDEA and Gov. Mike Dunleavy’s administration have emphasized the road’s potential to access numerous other less-delineated mineral prospects in the region as well, despite significant opposition from tribal and village governments in the area, particularly those near where the road would connect with the Dalton Highway north of Fairbanks.

From there, it would run largely along the southern flank of the Brooks Range to the expansive Ambler mining district. There has been preliminary exploration conducted for decades in the area, but the isolated location has so far precluded meaningful development.

Local opposition to the road stems from fears it will disrupt caribou migrations and attract additional sport hunters in a large area of the Interior used predominantly for subsistence purposes.

AIDEA leaders insist use of the road will be actively monitored and restricted to mining traffic only, with exceptions for local uses.

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They are modeling their plan for an industrial toll road after the 52-mile haul road to the Red Dog zinc mine in Northwest Alaska that the authority financed in the late 1980s and has successfully generated toll revenue for decades.

The Northwest Arctic Borough passed a resolution backing the Ambler Road last October.

Other opposition stems from skepticism the road will pencil out for the state. Estimated in 2017 to cost between $280 million and $380 million for basic gravel construction, the final environmental impact statement, or EIS, for the road pegged the total construction cost at approximately $520 million in 2020.

AIDEA has yet to publicly detail its plan to coordinate road financing and construction, with development of the mineral prospects needed to support the road beyond a conceptual plan. However, officials with the authority note that aligning the financing for the road and mine is complex, but something that was achieved with Red Dog and the road there.

AIDEA leaders tout the possibility of upward of 3,900 jobs being created by the Ambler district once several mines are active.

While there are more than a dozen early-stage prospects in the Ambler district, only the Arctic and Bornite deposits being worked by Ambler Metals have been drilled extensively.

Ambler Metals is a joint venture of Australian mining firm South32 Ltd. and Vancouver-based explorer Trilogy Metals, which conducted the early work on the prospects. Trilogy and South32 are also funding a $28.5 million work program this year that will focus on engineering studies at Arctic, the more advanced of the two prospects; submitting a Clean Water Act wetlands permit application for the Arctic project to the U.S. Army Corps of Engineers early this year; and drilling Arctic and other targets in the area.

Trilogy leaders expect permitting the open-pit mine prospect will take between 24 and 36 months, a timeline that could seemingly put the mine on schedule for development concurrent with the road, if it pans out for the companies.

Representatives for AIDEA and Trilogy did not respond to questions about the financing plan by publication time for this story.

Authority officials have said road construction would likely be funded with long-term revenue bonds, though the Arctic mine currently has an expected life of just 12 years.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.