After a borough meeting Tuesday night, a new payment in lieu of taxes, or PILT, agreement has been struck between the Northwest Arctic Borough and Teck Alaska, the operator of Red Dog Mine.
For the next 10 years, the borough will receive annual payments from Teck Alaska based on a fixed asset value of Red Dog mine, which is estimated to be between $14 million and $18 million per year.
Wayne Hall, superintendent for environment and community relations with Teck Alaska, said the annual payments to the borough have increased since the previous agreement.
“There was a previous PILT agreement that was for five years, which expired a year and a half ago, and we’ve been under a severance tax until this new agreement has come into effect with the approval of the ordinance on Tuesday.”
The borough previously received $11.6 million annually, but now, the new PILT agreement has an estimated value of $20 million-26 million per year over the course of its 10-year duration.
Hall said it’s also a retroactive agreement, dating back to Jan. 1, 2016.
In addition, Teck Alaska will create a village improvement fund to be distributed by the borough towards community services and infrastructure, with input from its 11 villages. The fund will be opened with $11 million and will receive $4 million-8 million per year based on a certain percentage of Red Dog’s gross profits.
Red Dog Mine sits on land owned by the NANA regional corporation and has been in operation since 1989. According to the corporation’s website, during the mine’s existence, NANA has received $1.3 billion in net proceeds payments from the mine and distributed $820 million of that to other shareholders and corporations.
The Northwest Arctic Borough Assembly approved the new PILT agreement on Tuesday night following a public hearing.
