The Yukon government has arrived at an agreement in principle with the Municipality of Skagway for construction of and future access to a marine services platform at the community’s ore dock.
In a March 7 interview, Michael Prochazka, assistant deputy minister in operations for the Yukon’s Department of Economic Development, said the deal will ensure access to tidewater for the territory’s mining industry as well as the import and export of goods for other industries.
“It’s a long-term foothold for Yukon’s economy,” he said.
The ore terminal in Skagway, Alaska was at risk of being demolished to make way for a new port for large cruise ships. Minto mine relies on that ore terminal. The mine’s website outlines the path the minerals take from the mine via trucks headed for the ore terminal. The concentrate gets stored at the ore terminal until there’s a sufficient load to ship to Japan.
The copper-gold mine, which is owned and operated by Minto Metals Corporation, is located 240 kilometres northwest of Whitehorse and has been producing since 2007.
Ranj Pillai, now the Yukon’s premier and minister of Economic Development, previously said the mine employs hundreds of workers and the economic potential down the line could be in the billions of dollars.
Pillai said the Yukon government had been trying to figure out a solution so Minto mine can continue to export minerals. He said conversations between the territorial government, the Alaskan municipality and the mining industry date back to 2018.
In a March 2 meeting, the borough assembly of the Municipality of Skagway voted in favour of the general terms for an export cooperation agreement with the Yukon government. The vote included a resolution to allow its staff to continue negotiating with the Yukon government to come to a conclusive deal and execute the agreement.
Prochazka said this is a step towards the Yukon government making a financial investment in ore dock construction to the tune of US$17.65 million (approximately C$24 million).
Now the fine details can be worked out over the next two months, he said, noting that the port redevelopment is a large project involving improvements to the cruise ship dock and ore dock.
This will mean access to markets by providing a transportation link in addition to the highway, Prochazka said. He said being able to get bulk ore onto ships is of “great importance” to the mining industry and it acts as an “investment attraction.”
“That’s huge,” he said.
A line in the terms of the agreement stipulates: “[The Yukon government] designates mining companies to benefit from preferential access and a fee discount.”
Any number of mining companies will be able to take advantage of the industrial port as part of “creating that balance between what the industry feels it needs to have available over the longer term and what fits in with the broader redevelopment plans for the port in Skagway,” Prochazka said.
The proposed terms start at a 35-year initial term with the option to renew for another 15 years.
Prochazka said construction could begin in the fall.
“This type of cooperation agreement that Yukon is working towards really represents a strengthening of ties between Yukon and Alaska, particularly in Skagway. You know, there’s been a real effort to understand each other’s needs and collaborate and try and come towards an agreement that works for both sides,” he said.
Prochazka commented on a transition to critical minerals around the globe.
“Yukon is fortunately home to many of those minerals that the world markets are demanding,” he said.
“This type of investment in a port with a critical transportation link will really present an opportunity for Yukon to capitalize on that generational shift towards these green technologies and really provide the access for industry to get those critical minerals to market.”
The critical decision on the future of the ore terminal was made by the Skagway assembly at its March 2 meeting. The six-person assembly voted nearly unanimously to approve the agreement in principle with Sam Bass offering the only dissenting vote.
Bass cited the reduced flexibility the lengthy term of the agreement left Skagway with. He also broached the possibility of the municipality financing the marine services platform itself rather than striking the bargain with the Yukon or including a clause allowing Skagway to buy the Yukon out of its investment in the port facility if they find it advantageous to put the ore terminal to another use.
Bass’s fellow assembly members spoke up about benefits including a diversified economy for the port town that plays host to numerous cruise ships each summer. The assembly also discussed other concerns including the increased truck traffic that the use of the ore terminal facility is likely to bring.
Amendments to the wording of the municipality’s agreement with the Yukon government were passed prior to the final vote clarifying the amount and rough location of land to be made available for ore storage among other concerns.
Yukon Party Leader Currie Dixon told reporters in the foyer of the legislature March 7 that he is pleased the Yukon government is taking the access issue seriously.
“The fact that they’re using this agreement to guarantee access for Yukon is really important because that port is very important to the mining industry and having access to tidewater is critical for the ongoing development of the mining industry.”
However, Dixon raised concerns about the functionality of the infrastructure, what happens for the next couple of years during construction and where the money is coming from.
Both opposition leaders have questions about the criteria for preferential access.
“I think we really need to make sure that we focus on, you know, companies that are like good stewards, and we have quite a few examples of companies that have not been good stewards,” said Yukon NDP Leader Kate White.
Ultimately, she said it’s a positive relationship the Yukon government is getting into with Skagway.
Contact Dana Hatherly at dana.hatherly@yukon-news.com