Analysis

Expansion of Alaskan ore terminal approved

The Alaska Industrial Development and Export Authority has approved a 7.5Mn project to expand the Skagway Ore Terminal, construction of which is to begin late this summer, with project completion expected in 1Q14.

AIDEA Executive Director Ted Leonard said, "This expansion of Skagway Ore Terminal is another sign of our commitment to grow the facility in partnership with the community, and have it used in the long term as the Gateway to the Yukon. We are very pleased that AIDEA has the financial tools to expand the capability of the terminal. New jobs and economic growth for Skagway will result."

AIDEA, which owns the terminal, has a contract with Minto Explorations Ltd. and its parent, Capstone Mining Corp., to use the ore terminal. Eagle Whitehorse will be a second customer using the facility to export magnetite.

Eagle Whitehorse has a contract to sell the magnetite to Glencore Xstrata, and plans to ship 360,000tonnes/year 105 miles by truck to Skagway for five years, which will require the ore terminal to be expanded by 240 feet to create an additional 50,000tonnes of storage space.

To facilitate the deal, Glencore has offered to pay for the first 160,000tonness once the ore has been placed in stockpile at the Skagway terminal.

Expansion of the Skagway terminal is significant as it will make storage and ship-loading capacity available for Yukon mines, which are now in the advanced stages of exploration. Skagway officials have been promoting the concept of "Gateway Skagway" with a long-term plan for port improvements.