Alaska-owned corporation asks Legislature to borrow $300 million for mining projects

The Graphite Creek deposit near Nome is the largest identified deposit of graphite, a critical mineral, in the United States. (Photo by George Case/U.S. Geological Survey)

Alaska’s state-owned development bank is asking state lawmakers for permission to borrow up to $300 million that could be spent to support mining projects statewide.

To date, officials at the Alaska Industrial Development and Export Authority have not provided legislators or the public with a precise spending plan. 

Randy Ruaro, the authority’s executive director, said that’s partly by design: The agency wants to stay flexible as it prepares for the possible need to provide state dollars to match billions in federal loans available for mineral projects.

“We’ve got this window of time in the next couple of years when there’s going to be some really good federal funding available. It will require a match of some level,” he said. 

The bonds could also be used to make a direct investment in a mining project, Ruaro said, or it could involve AIDEA paying to build supporting infrastructure, such as a road to a mine site, a port to serve a mine, or a processing plant. 

Josie Wilson, the authority’s communications director, said AIDEA officials are operating under non-disclosure agreements with mining companies, and those make it impossible to say which projects could receive financial support from AIDEA.

The request is part of a broader national and state push to develop American sources of “critical minerals” used in electronics, green-energy projects, and weapons.

Rep. Kevin McCabe, R-Big Lake, is a cosponsor of the bill containing AIDEA’s proposal to the Legislature. He cited the need for antimony, a metal used in artillery shells, among other uses.

Nova Minerals, a company developing a gold prospect west of the Susitna River, recently announced the discovery of large amounts of antimony during exploratory drilling.

Nova Minerals has said it intends to use an AIDEA-financed road through the Matanuska-Susitna Borough to explore the project, and McCabe said he believes part of the road could be financed with the bonds.

AIDEA is empowered by state law to issue bonds, but if its borrowing exceeds $25 million, the Alaska Legislature has to approve its plans. The bonds would be repayable with revenue AIDEA earns from loans it issues during the normal course of its business.

“These bonds are not a moral obligation or a promise of the state of Alaska to pay,” Ruaro said.

AIDEA’s request was inserted March 14 by the House Transportation Committee as an amendment to House Bill 122, a measure originally written to allow the Alaska Railroad to borrow money for renovations to the cruise ship port in Seward. The move was first noted by Fairbanks writer Dermot Cole, a skeptic of the idea.

Rep. Frank Tomaszewski, R-Fairbanks, is sponsoring HB 122 and said he was surprised by the amendment.

He’s unsure about how the money will be used and said that if he’s not satisfied with AIDEA’s answers to his questions, he’ll remove the provisions from the bill when it arrives at the House Finance Committee. The Seward cruise ship port is too important to risk, he said.

The amendment also surprised Rep. Genevieve Mina, D-Anchorage and a member of the House minority who sits on the transportation committee.

“That was an amendment that was sent to us the morning of us voting on those amendments,” she said.

When it came to the railroad’s borrowing plan, legislators first received plenty of reports and briefings about the topic.

“That makes me feel comfortable to vote for the original bill on hand. And we did not have any of that at all for that AIDEA bond amendment,” Mina said.

AIDEA’s request, contained in HB 122, has been referred to the House Finance Committee, which has not yet scheduled it for a hearing.

Correction: McCabe’s role related to the bill was incorrectly described in the original version of the article.

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