It’s been 25 years since the opening of the Red Dog zinc and lead mine, created through an operating agreement between Teck Resources Limited (Teck) and NANA Regional Corporation Inc. (NANA), an Alaskan native corporation, to develop mineral resources on its territorial land. That agreement is still in effect today and has resulted in approximately $1 billion in royalties being paid to NANA.
“We have been operating the Red Dog Mine since 1989,” explains Wayne Hall, manager, communications and public relations at Teck’s Red Dog Mine. “There is a long history associated with the mine which began in the early 1980s when NANA began looking for a mining company to partner with that had experience mining in northern latitudes and cold climates.” That company turned out to be Cominco Limited, which eventually became part of Teck Resources, Canada’s largest diversified resources company.
NANA, owned by the Iñupiat people of Northwest Alaska, is the landowner of a region that measures 38,000 square miles, most of which is above the Arctic Circle. The region includes 11 communities that range in size from 122 to more than 3,500 residents. Of the $1 billion in royalties received to date, NANA has paid $608 million to other Alaska Native corporations under revenue-sharing provisions of the Alaska Native Claims Settlement Act and $199 million in dividends to its own shareholders.
“We are the only tax payer in the Northwest Arctic Borough Region,” states Hall, who adds that Red Dog pays approximately $11 million to the region in lieu of taxes annually. The Red Dog Mine provides 60 per cent of the Borough’s total revenue.
Terms of agreement
NANA places a very high priority on the traditional subsistence way of life for its people. As such, there were several factors inherent in that ground-breaking mining agreement, which was officially signed in 1982. The first of these called for NANA to participate in a net royalty return once the initial capital needed to develop the mine had been recouped. The rate of the net royalty would increase by five per cent every five years to a maximum of 50 per cent. NANA currently receives a 30 per cent net royalty.
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