Kinross drops ore haul volume by 20 percent; Contango blames bridge restriction near North Pole

UPDATE: The Department of Transportation released the final Tetlin corridor study today, more than a year after the state shut down the committee that was supposed to prepare it.

I haven’t had time to go through all of it, but one of the alarming findings is that the state never made any plans to weigh all of the ore-hauling trucks, assuming that the intermittent schedule of weigh station openings was all that was needed to monitor the situation.


Contango Ore claims new weight restrictions on the Chena River flood control bridge will mean a 20 percent cut in the amount of ore hauled to the Fort Knox mine.

Contango and Kinross had intended to haul 50 tons of rock per load. A 20 percent reduction means the trucks will only carry 40 tons per load.

But something about this doesn’t add up. The new 80-ton bridge limit on the Richardson Highway should not have led to a 10-ton reduction for each truck unless the trucks were carrying a lot more weight than has been reported.

It’s possible that the joint venture is planning to increase the number of trucks on the road and this will be the justification.

After failing to set a gross vehicle weight limit on the bridge for more than a year, while the heavily loaded Kinross trucks rolled north, the state Department of Transportation and Public Facilities decided this fall to limit the trucks to 80 tons.

Instead of explaining the situation to the public, the transportation department has chosen to stonewall. The DOTPF PR employees are telling the public to figure all of this out on their own because the state will not do so.

Click here to see the document that the “say yes to everything” Dunleavy administration claims is sufficient to understand what’s happening.

Perhaps someone in the Legislature will decide to look at the 3,300 pages above and ask the department for a report in English.

Contango President Rick Van Nieuwenhuyse blamed the 20 percent cut per truck load on the state bridge decision in a call with investors Friday.

“The bottom line is the mine plan really revolves around the reduction in bridge weights that was imposed by the, recently imposed by the state of Alaska, the Department of Transportation. And it pertains to one particular bridge that’s really kind of in the middle of the road route between, between mine site Manh Choh and the processing site at Fort Knox, the Chena River flood plain bridge,” he said.

“So that reduction is basically resulting in a net 20 percent fewer tons that can be delivered. And thereby restricting the number of tons that can be delivered to the Fort Knox mill,” he said.

“So that’s really what’s driving the new, the new revised plan. I shouldn’t say it’s revised. It’s revised from what the original feasibility study plan was, but it now updated . . with the recent meeting we had with our joint venture partner,” he said.

“We think it’s a worst-case scenario plan in the sense that this is new information. So we haven’t tried to look at what other things can be done to help mitigate the reduction in tons,” he said. “Kinross is working on that. There’ll certainly be updates on that as we go through the year here. But this was important information to get out to our shareholders,” Van Nieuwenhuyse said.

Investors asked Contango various questions on what might happen: Will the joint venture add more trucks to the hauling operation? Will the company pay to help increase the capacity of the bridge? Can the company revise operations to take one trailer at a time over the bridge and station tractors on both sides?

Van Nieuwenhuyse said Kinross is looking at many options, but he said he had no details.

He also responded to a question about whether this weight reduction by the state “could have been foreseen?”

“No. Not really at all. These are annual reviews that the, the state of Alaska DOT does. And again we didn’t really have any heads up on, you know, on, on the weight limits, that’s relatively recent. Very recent. And then the implications are the other things. So once you get weight limits you have to go through, and this obviously is, Kinross is the manager is doing this and understanding what the effects are going to be on the overall mine plan,” he said.

Van Niewenhuyse is incorrect. The problem could have been foreseen. Had the transportation department done its duty, there would have been a weight limit on the bridge before the trucking operation began.

The know-nothing attitude taken by the Dunleavy administration is on full display here, with the department claiming it has no idea of what led Contango to announce a 20 percent cut.

The Dunleavy administration shut down a committee that was working on issues related to the ore haul plan a year ago.

Van Nieuwenhuyse said Kinross is “talking a conservative view and I think that’s the right view to take. And then you’re going to look at mitigation strategies, what can we do to change things, adjust things, to make the mine plan more effective from a transport, a transportation standpoint,” he said.

Van Nieuwenhuyse did not mention higher-than-expected moisture levels in the ore as a weight issue until he was questioned about it.

“It was not something that was anticipated in the feasibility study,” he said.

“We had a very wet year this year and that’s, so that’s a consequence of that,” he said.

But it was not a very wet year. The Tok weather station reported that rain this summer was 2 inches below normal.

It’s not clear how much of a weight reduction per truckload is due to the bridge and how much is due to wet rocks. It’s also not clear how much of the increase in moisture stems from stockpiling the rocks in the open at Fort Knox for months at a time. He said that Kinross may be able to cover the stockpiles at Fort Knox.

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