Donlin mine promises revenue for all Alaska Native corporations, but critics point to environmental risks

Mine worker Justin Andrew examines and core samples at the Donlin mine camp on Aug. 11. Outside is the hillside that would be dug for its gold if the huge mine is developed. (Photo by Yereth Rosen/Alaska Beacon)

In the rolling uplands of Southwest Alaska’s Kuskokwim River basin is a massive deposit of gold that poses some profound questions about the future of the region’s Yup’ik people and Indigenous people elsewhere in the state.

The Donlin Gold mine, which is on the cusp of being constructed after two decades of exploration and planning work, would be one of the largest open-pit gold mines in the world. A project being pursued by a partnership that includes one of the world’s largest mining companies, Donlin would produce 39 million ounces of gold, operate for nearly three decades and employ hundreds of workers a year, according to the partnership’s plan.

Donlin is especially exciting, say supporters, because of its location — on Alaska Native land, with Alaska Native ownership of the mineral rights, and in a predominantly Native region long plagued by economic woes and public-service deficits.

“That region happens to be one of the places suffering the most significant poverty and infrastructure deficit of any place in America,” Matt Singer, an attorney for the Yup’ik-owned Calista Corp., the Bethel-based regional corporation that owns site’s subsurface minerals, said at a state court hearing this week on a dispute over the mine plan. The Kuskokwim Corp., the Yup’ik-owned village corporation for the area, owns the surface rights.

But Indigenous opponents in the region say the costs of the mine to fish, wildlife and culture, in the form of damaged habitat and long-term pollution, outweigh any potential dollar gains.

“While this area of Alaska is one of the lowest in cash income, it is the highest in community harvest of fish and game resources not only for basic nutrition, but as the bedrock of identity and cultural values for the people of the region,” the Orutsararmiut Native Council, a Bethel-based tribal government, says on a website devoted to opposition to the Donlin project.

While there is much debate over the environmental impacts of the project — which Donlin Gold LLC, the developer, insists can be minimized — a key point of contention is the role that Donlin could play in the economic well-being of all Alaska Native corporations.

The Donlin Mine airstrip, with the camp at the far end, is seen from the air on Aug. 11. The mine site is in the hilly terrain near the Southwest Alaska’s winding Kuskokwim River. (Photo by Yereth Rosen/Alaska Beacon)

Should Donlin go into production, all regional and village Native corporations would be entitled to some of the revenues. That is because of a provision in the 1971 Alaska Native Claims Settlement Act that directs 70% of the profits from natural-resource development by one corporation to be shared among all the 12 regional Native corporations. Related to that profit-sharing provision, called 7(i) after its legal nomenclature, is another provision called 7(j) that mandates redistribution of shared profits from regional corporations to the smaller corporations representing Alaska’s approximately 200 villages.

The profit-sharing is unique among Indigenous institutions in the world, and it is intended to reflect Alaska Native values of sharing and community.

The revenues are critical to some corporations to “keep their lights on and their doors open,” Kristina Woolston, external affairs manager for Donlin Gold LLC, said during a tour of the mine site last summer. “This is really the project on the horizon that could have the biggest impact on the intent of ANSCA.”

But Beverly Hoffman, a tribal elder in the region, contends the promise of wealth distribution is giving false hope.

“It sometimes hurts my heart, sitting here in my home in Bethel, Alaska, to know that there’s revenue sharing and the way corporations are set up,” she said in a telephone interview. Her view, after collecting what she characterizes as paltry corporate dividends over decades, is that 7(i) revenues tend to wind up concentrated in corporate offices rather than in the regions where shareholders have needs.

“Turn around and look at the corporate salaries,” she said. “Who’s really going to benefit? Me, my people, the shareholders? Absolutely not,” she said. “

Donlin’s potential role as a profit-sharer is highlighted by the case of another mine: the Red Dog Mine, which began production in 1989. Long one of the world’s biggest zinc producers, Red Dog operates on property owned by NANA Corp., the regional Native corporation for the Inupiat people of Northwest Alaska.

Through 2021, Red Dog had produced a cumulative $1.6 billion in 7(i) payments to other Native corporations, along with the more than $1 billion in revenue that went directly to NANA. That is aside from payments to the state and borough in taxes, shareholder wages and other economic benefits.

A group photo from a “No Donlin” march held in Bethel in 2018. (Photo provided by Mother Kuskokwim coalition)

Red Dog profits are among the dominant sources of 7(i) revenues, though Native corporations’ North Slope oil profits have been the top contributors, according to a 2018 study conducted for the ANCSA Regional Association. Red Dog’s role has grown over the years. Until about 2004, total 7(i) profit sharing was usually under $50 million a year, but the total jumped in the years following to four to six times that amount, thanks in part to the way increased zinc prices boosted Red Dog’s profitability, according to the study.

But Red Dog is aging, and the mine’s NANA-owned resources are expected to be depleted by 2031.  Plans are for the mine to live on and continue producing revenue for the region and its employees; NANA and the company’s corporate partner, mine operator Teck Resources, are seeking to extend operations to different zinc deposits located farther inland. However, those deposits, called Aktigirup and Anarraaq, are on state land, where production would yield no 7(i) or 7(j) revenues to be shared.

Donlin, if developed, would do much to fill in the gap expected to be created by the loss of NANA’s Red Dog distributions. Not only that, but it would also provide enough revenue to fund a level of local government in the region, which currently lacks any borough-level structure, according to a report from the University of Alaska Anchorage’s Institute of Social and Economic Research.

Like some other development projects that affect Alaska’s indigenous people, the Donlin debate has exposed a schism between corporations, many of which favor the project, and tribal organizations, many of which oppose it. Some organizations are addressing the schism by being officially neutral, including the Bethel Native Corporation, where Hoffman won a board seat last May.

The relationship of money to the traditional subsistence lifestyle comes up in the debate.

Even in its exploration phase, the mine has been an economic boon in the region and “one of the most successful Alaska Native-hire businesses in Alaska,” said the ISER report. It said that 90% of those hired at the 200-person Donlin camp are Native corporate shareholders.

Yago Jacob of Napaskiak, one of the Calista shareholders employed at the Donlin Mine, holds up a sliced piece of a geological core on Aug. 11. About 90% of the workers at the mine’s camp are shareholders of the Native corporation that owns the mineral rights, a high rate of hire that has won praise. (Photo by Yereth Rosen/Alaska Beacon)

Generating such personal income is important even to those pursuing traditional subsistence lifestyles, mine supporters argue.

One Alaskans who is looking favorably at Donlin is Willie Hensley, an architect of the Alaska Native Claims Settlement Act and a longtime leader from the NANA region that has benefitted from Red Dog. He said he is impressed with Donlin’s planning and outreach, and that it is unrealistic to dismiss the economic payouts that Donlin could provide, even from a traditional perspective.

“It takes money to be on subsistence,” Hensley said. “You can’t take a boat trip up and down the river for moose and not pay $10 a gallon.”

Opponents see the promise of Donlin money as destructive.

“This is a make-or-break deal for the Yup’ik culture as a whole and goes against every ounce of our culture,” said Sophie Swope, the director of an anti-Donlin coaltiion called Mother Kuskokwim and a newly elected member of the Bethel City Council.

Among those who say the mine’s costs are overlooked is the Yukon-Kuskokwim Health Corp., which in 2016 passed an anti-mine resolution that acknowledged the promised revenues but cited the “extreme hazards and excessive risks it would pose to the health and welfare of the people of the Yukon-Kuskokwim Delta Region.”

Beverly Hoffman, far right, poses with fellow opponents of the Donlin Mine in Bethel. The mine is proposed for development in the hilly terrain near the Kuskokwim River. (Photo provided by SalmonState)

Positions are also mixed among elected officials who are highly regarded by Yukon-Kuskokwim residents. U.S. Sen. Lisa Murkowski favors the mine, for example, while Tiffany Zulkosky, a former Bethel mayor who represented the region for two terms in the state House, is an outspoken opponent, as is her successor, newly elected state Rep. C.J. McCormick.

Some people and organizations have changed their positions over time, like the Association of Village Council Presidents, a consortium representing 56 tribes in the Yukon-Kuskokwim Delta. The association in 2006 announced its support for the mine but in 2019 passed a resolution rescinding that support.

Even within families and among close friends in the region, Donlin is a divisive subject. That includes Beverly Hoffman’s family.

Pete Kaiser, who in 2019 became the first Yup’ik musher to win the Iditarod Trail Sled Dog Race, is related to Hoffman by marriage, for example. He is sponsored by Donlin — support that is in addition to the mining company’s role as one of the main sponsors of the race — and that makes for some awkwardness reminiscent of the way national political polarization has affected personal relationships.

“His mother and I are close friends,” she said. “We don’t really talk about Donlin. It’s like Trump for some people.”

This story originally appeared in the Alaska Beacon and is republished here with permission.

Alaska Beacon

Alaska Beacon is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Alaska Beacon maintains editorial independence. Contact Editor Andrew Kitchenman for questions: Follow Alaska Beacon on Facebook and Twitter.

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