A joint venture led by the Canadian mining company Kinross wants to turn poritons of the Richardson, Steese and Alaska highways into a round-the-clock 250-mile industrial route for big mining trucks.

“In today’s gold price environment, Peak Gold (since renamed Manh Choh) is an attractive, high-margin project that is expected to generate robust returns,” J. Paul Rollinson, Kinross Gold President and CEO said when the company bought 70 percent of the project in 2020 for $93 million.

The company expects it will cost a total of about $750 an ounce to extract and process gold, leaving a profit of about $1,000 per ounce in free cash flow. That’s about $1 billion over five years.

The big trucks will be running to or from the mine every 7.5 minutes.

A big reason for the “robust returns” is that the company won’t have to build a mill at Tetlin that could cost $400 million or $500 million. Plus, it will be using public highways nearly all of the way and doesn’t have to worry about paying for road maintenance, bridge repairs or the impact on other drivers using the highways.

Those are real costs, which will be borne by the public, not by the shareholders of Kinross and its joint venture partner Contango ORE, the company that has received a $10 million from the Alaska Permanent Fund.

As veteran mining promoter Rick Van Nieuwenhuyse beamed in 2020, “I don't have to get a 200-mile-road or a 300-mile-gas pipeline built like at Ambler and Donlin. The Peak deposit just needs a driveway.”

In other words, Kinross builds a driveway and then uses existing public infrastructure to get millions of tons of rock to its underutilized mill northeast of Fairbanks. It doesn’t have to get permits for a mill or a place to dump tailings.

It’s a great deal for Kinross/Contango, which will save hundreds of millions by not having to build facilities to process the ore at or near Tetlin and keeps the mill in operation. It’s a great deal for the Tetlin tribe, which will collect a royalty because the proposed open pit mine is on its land.

It will be a public safety nightmare for people who will be traveling along the Alaska, Richardson and Steese highways from just beyond Tok.

The state transportation department has next to nothing on its website about the impact on Alaskans, just a little information about additional passing lanes that were under review years before this plan popped up.

The state website says there are six passing lanes envisioned on the Alaska Highway and 10 on the Richardson Highway. The state also is planning to build a turn lane for the Tetlin mine site.

All of this state and federal spending is a factor in inflating the free cash flow of the project to $1 billion.

Gov. Mike Dunleavy and Transportation Commissioner Ryan Anderson, a Dunleavy cheerleader, need to stop acting as if the state is a partner with Kinross/Contango in this venture and consider the broader public interest.

The Permanent Fund is a $10 million partner in Contango, but there are key issues that must be faced:

1. How many more traffic accidents and traffic deaths can be expected with ore trucks running either direction every 7.5 minutes from now until Kinross abandons the Fort Knox mill? Where is the state traffic study? What does candidate Dunleavy believe is an acceptable increase in traffic accidents and deaths?

2. The first Tetlin project is supposed to last 4.5 years, but there are hundreds of thousands of additional acres that could be mined in a similar fashion for decades, so this has to be looked at as a long-term transformation of state highway usage. Van Nieuwenhuyse said in November, “we expect to expand the current 5-year mine plan.”

3. What is the expected damage from running the mining trucks on the roads and bridges? What is the plan to repair the roads and expand maintenance? How does Dunleavy plan to pay for the work and why has no one described the full details?

4. What will the impact of the Kinross plan be on Alaskans who drive the Richardson and Steese highways on a regular basis? How much RV traffic in the summer is likely to be lost as drivers opt to head for Anchorage from Tok instead of continuing to Fairbanks?

5. The state has long had a proposal to add more passing lanes between Delta and Fairbanks, but it was not a priority. The state is now saying the passing lanes will be a priority and it will ask the Legislature for funding. The state response to the Kinross plan appears limited to adding passing lanes that had already been in the works.

6. What is the overall economic impact of this proposal, not just on Kinross and Contango ORE, but on Alaska? That analysis has to include jobs, taxes, public safety and the costs of maintaining and policing state highways and bridges. Where is the Dunleavy plan that outlines the pros and cons?

7. Kinross and the Dunleavy administration are planning a “Manh Choh Ore Transportation Meeting” Tuesday from 5:30p.m. to 8 p.m. “Hear directly from the Kinross Alaska team and the Alaska Department of Transportation on the Manh Choh trucking plan,” Kinross says. To increase public access, Kinross and the Dunleavy administration should make this session available online. They have yet to take steps to do so.

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