Last month, the state of Alaska’s investment authority agreed to put $35 million towards pre-development work on the Ambler Road project.
The private access Ambler Road would run roughly 211 miles from the Dalton Highway to the Ambler Mining District in the Northwest Arctic Borough.
The funding from the Alaska Industrial Development and Export Authority, or AIDEA, was matched by Ambler Metals, the company that hopes to use the road to access mineral deposits in the Ambler Mining District. The company’s most promising deposit is referred to as the Arctic project.
Ambler Metals will not be an operator of the road. That falls solely with AIDEA.
AIDEA executive director Alan Weitzner said that as part of the contract with Ambler Metals, the company wanted an opportunity to get some of their investment back.
“For their contribution of that $35 million, what they’ve requested is that they get a credit against what would be toll or use volume charges for activity on the road,” Weitzner said. “And we have agreed to that.”
Basically, Ambler Metals would get a credit towards any fees for using the road. They would only get that credit if the road actually gets built. Weitzner said AIDEA hasn’t officially decided to invest in the construction of the road yet. That’s still a few years away.
“We are currently in feasibility and permitting activity,” Weitzner said. “We look to complete this, by latest, by the end of 2024.”
Weitzner said while the financing is still up in the air, it’s not totally clear how much Ambler Metals stands to get back in toll fees, but he said it’s very unlikely that it’ll get the entire $35 million investment back.
“[I] don’t believe that would be the case because of the capital costs of the road itself,” Weitzner said.
Throughout the Ambler Road’s development, AIDEA has drawn a lot of comparisons between this project and the Delong Mountain Terminal. That’s a roughly 52-mile road that leads from the port site near Kivalina to the Red Dog Mine. The zinc and lead mine is owned by the NANA Regional Native corporation and operated by Teck Alaska, formerly known as Cominco.
Weitzner said that Teck and NANA worked together on the pre-development work for the access road, and that ended up lowering the amount of money that the mine needed to make to break even. He said the investment from Ambler Metals for work on the Ambler Road is similar.
“They’re the initial party, the initial user we believe with the Arctic Mine development,” Weitzner said. “And they’re contributing to the final feasibility permitting activities that gets us to the construction of that road as our partner in that case. And ultimately they’re lowering the amount of capital that needs to be financed.”
The Ambler Road has been a lightning rod for controversy for years, with environmentalists concerned over potential impacts to caribou migration from the road’s construction. They also are concerned that the road goes through the Gates of the Arctic National Park and Preserve.
Weitzner sees investment in the project as a benefit to the state economically. He pointed to Red Dog Mine again, which provides a massive percentage of the Northwest Arctic Borough’s revenues.
“What I would highlight is that there’ve been, through three generations, 500 people working at the Red Dog Mine, generating revenues within their communities,” Weitzner said. “It’s that example which is what we’re looking to develop across multiple mines in the Ambler Mining District.”
Weitzner said Ambler Metals will likely be the first commercial user of the road, considering its financial contributions and existing deposits in the Ambler Mining District. However, he said the road will be open to other commercial interests who want to access the mining district, and they will have to pay full fees to use the road.
Editor’s note: A previous version of this story said that Red Dog is a zinc and cobalt mine. It’s a zinc and lead mine. The story has been corrected.