Mine trucking study says key bottleneck is number of trucks per day; that's a public relations issue
How many 82-ton ore-hauling trucks per day will Kinross run between the proposed Tetlin Mine and the Fort Knox Mine?
The shifting estimates from the company show that this is, at least in part, a public relations matter.
It is easier to sell the plan to the public by lowballing the estimate about truck traffic.
When the project first surfaced, the company estimated it would run from 2 trucks per hour to 4 trucks per hour all day, every day. It said the loaded trucks would carry about 45 tons of rock and be up to 120 feet long.
The “base case” was to haul 3,900 tons of rock a day to Fort Knox.
Because the trucks have to run both directions, 4 trucks per hour translates into a truck running either way every 7.5 minutes for nearly five years, about 192 trucks per day.
Now the company says the trucks will run every 24 minutes, which translates into a truck running either way every 12 minutes, about 120 trucks per day. The loaded trucks would carry about 50 tons of rock on each trip.
The “base case” has been reduced to 3,000 tons per day.
There is nothing stopping Kinross Gold, 70 percent owner of the project, from running more than 192 trucks per day or from hiking its goal toward the old 3,900-ton target.
It has a powerful economic incentive to run as many trucks as possible because the ore from Tetlin contains about 8 to 10 times more gold, on a per ton basis, than the ore from the vicinity of Fort Knox. The more Tetlin ore that can be processed, the higher the profit.
In addition to public relations, driver shortages and equipment shortages are most likely at play here.
Kinross plans to process the Tetlin rock four times a year in large batches. Kinross and its minority partner, Contango, hope to recover more than 900,000 ounces of gold in 4.5 years, earning about $800 per ounce at today’s prices. That comes to $720 million in net profits.
The language used by Contango consultant John Sims in a new feasibility study on the economics of the project backs up my claim that the Kinross-Contango statements on truck frequency are simply strategy, a matter of choice.
The announcement by Kinross that it will haul 3,000 tons per day—60 truckloads at 50 tons per truck—is what Sims identifies as the “downstream bottleneck.”
“Considering the chosen highway transport rate (3,000 short tons per day ore) is the downstream bottleneck, ore stockpiles must be maintained to disconnect the ex-pit ore mining rate and ore delivery rate, as there are periods in the LOM (life of mine) plan with more or less than the requisite 3,000 stpd day,” wrote Sims, a geologist and former Kinross employee.
The highway delivery rate to For Knox “is the limiting bottleneck,” Sims wrote elsewhere in the report, and that the “selected highway transport rate” requires the stockpile plan.
It’s a matter of choice, a “downstream bottleneck” that can be eased without asking anyone for approval. All the company has to do is find drivers and trucks.
Here is the technical report from Sims. He says the internal rate of return on the project after taxes is about 23 percent.
In his work for Contango, Sims wrote dismissively and condescendingly about former Sen. Gary Wilken and others who have created Advocates for Safe Alaska Highways, a volunteer group that has challenged the trucking plan on safety grounds.
Sims said that despite “efforts at early and transparent community outreach” by Kinross and Contango, the safe highways group opposes the project, though “the plan is legal and requires no special permits.”
“Although not considered material to operating permits,” Sims said, the state Department of Transportation has started an analysis of the corridor and created a committee.
Sims, Contango and Kinross act as if the safety issues are imaginary. But they have financial reasons for claiming that 82-ton trucks running every 7.5 minutes on every hour of every day for years to come is safe and sensible.
The Dunleavy administration is slow walking the study and the committee, both of which were created to help the governor in his 2022 campaign.
The Dunleavy administration has ignored investigating all major safety questions and the governor has made it clear he wants the trucking plan to be approved.
The best thing to do now is to get behind the petition drive of Advocates for Safe Alaska Higways, gathering signatures of those opposed to the project.
The project “will endanger the safety of the driving public, our health, our children’s lives and our way of life in Interior Alaska.” The petition asks for a review of alternatives, including processing at Tetlin, which a 2018 study found would be highly profitable.
“We respectfully request that appropriate state agencies stop the ore haul plan until all safety concerns, especially those pertaining to the 280 daily school bus stops,” the petition says.
Here is a copy of the petition background.
Here is a copy of the petition.
The group asks that those collecting signatures scan the signed sheets and email the pages to info@Safealaskahighways.org.
Or email the group at the same address with your phone number and someone will call back to arrange to pick them up.
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