• Forecast
  • News Tip
  • Categories
Temperature Precipitation
Estimated read time
2m 22s

Operators of Alaska’s Red Dog Mine sue Northwest Arctic Borough over new tax

By Alexis Fernandez 1:41 PM January 15, 2016

Alaska’s only Arctic mine claims a new tax from the Northwest Arctic Borough (NAB) could put its operation out of business.

Teck Alaska, which operates the Red Dog Mine, has filed a legal complaint in Alaska’s Superior Court over what it says is a severe tax hike.

For more than two decades, Red Dog Mine and NAB have held a partnership through a cooperative agreement known as Payment in Lieu of Taxes. NAB receives 70 to 80 percent of its general fund through PILT. Red Dog Mine, one of the world’s largest zinc producers, is the only taxpayer in the Northwest Arctic Borough.

To date, about $140 million has been paid to the community for schools and government services, according to Wayne Hall, a spokesperson with Teck Alaska.

“Up until recently, it’s been very good. We’ve worked very cooperatively to come to a negotiated agreement that allows benefits for not only the region, but helps support the mine as well,” Hall said in an interview with KTVA.

Hall says it has been trying to negotiate with the borough for the past six months with no success.

“They’ve refused to tell us why they feel that they need this extra increase and why they think it is fair and reasonable,” said Hall.

Borough Mayor Clement Richards said they “tried in good faith” to negotiate with Teck, but that they are now done trying to negotiate.

Located 106 miles of the Arctic Circle, the mine employs 750 people in the Borough, totaling about $75 million in wages, according to Hall.

The borough says an increase in the amount of money they receive from the mine is long overdue; they claim to need funding for schools, ambulances and other services.

“Times change. The needs of our people have increased. I believe the severance tax is the appropriate step we need to take,” said Richards.

Hall says a new severance tax by NAB starting in 2016 could triple the mine’s average annual payments by $40 million. For the past five years, Red Dog has paid an average of $11.6 million every year to the borough.

“This is going to make the mine less competitive, and it’s going to increase uncertainties around the longevity of the mine and jobs, and economic opportunities in the area,” said Hall.

The borough claims the tax would make a relatively small dent in the mine’s profits.

“I don’t think it would basically affect the operations of Teck by any means,” said Richards.

The severance tax is a tax assessed on the extraction of the ore being mined from the ground.

The complaint requests an injunction of the severance tax and requires NAB to meet with Teck to resolve the matter.

Latest Stories

  • Weather

    Hello spring? Anchorage may get 5 to 9 inches of snow overnight

    by KTVA CBS 11 News on Mar 28, 16:41

    The National Weather Service says Anchorage residents should expect between 5 and 9 inches of wet snow through Wednesday morning. The NWS issued a winter weather advisory that will be in effect from 10 p.m. Tuesday to 10 a.m. Wednesday. Watch the entire KTVA Weather forecast at 5, 6 and 10 p.m. “Periods of snow […]

  • Weather

    KTVA Weather Lab: Aquarian Charter School

    by Melissa Frey on Mar 28, 15:56

    In this week’s KTVA Weather Lab, I visited Aquarian Charter School in Anchorage, where the second and third graders in Ms. Sarah and Ms. Stacy’s classes have been tracking the weather all year. I also answered the question of the week: What do meteorologists do on an average day? Every Tuesday, Melissa Frey will take the KTVA […]

  • News

    Multiple agencies searching for missing seal hunter in Western Alaska

    by KTVA CBS 11 News on Mar 28, 15:38

    Last updated at 4:46 p.m. on Tuesday, March 28 Multiple agencies and search and rescue groups are working together to find a Newtok seal hunter who was reported overdue Monday morning. Alaska State Troopers received word that 59-year-old Tom John was overdue around 11:45 a.m., more than 24 hours after he left the village of […]

  • Politics

    Meet the candidates: District 5 – Seat I – East Anchorage

    by Daniella Rivera on Mar 28, 15:21

    KTVA invited every registered candidate running in the upcoming Anchorage municipal election to an on-camera interview at our studios to discuss the following topics: Balancing the budget Public safety Introducing new taxes Addressing homelessness in Anchorage Plans for the future We also asked each candidate to submit a 300-word biography, each of which has been […]

  • News

    Anchorage police respond to report of gunfire between 2 vehicles in Northeast Anchorage

    by KTVA CBS 11 News on Mar 28, 12:11

    Anchorage police officers were called to Northeast Anchorage Monday evening shortly before 7 p.m. after witnesses in the area reported hearing gunshots. One witness told the Anchorage Police Department that multiple shots had been fired between two vehicles near the intersection of 11th Avenue and Turpin Street, according to a release from APD spokesperson Renee […]

  • Sports

    GCI Great Alaska Shootout: Same tournament, different marketing strategy

    by Dave Goldman on Mar 28, 11:56

    This November, the GCI Great Alaska Shootout has a big anniversary — it turns 40. The tournament’s look has changed over the years. Now, University of Alaska Anchorage’s athletic director, Keith Hackett, is marketing it that way too. For decades the tournament featured some of the biggest programs in college basketball. But the days of the […]

  • News

    Trump signs order rolling back Obama-era environmental efforts

    by Associated Press on Mar 28, 11:42

    President Donald Trump has signed an executive order that will roll back many of former President Barack Obama’s efforts to curb global warming. The order is aimed at helping spur American energy jobs. The president signed the order at the headquarters of the Environmental Protection Agency. Trump says this is “the start of a new […]

  • Lifestyle

    Power outage leaves Juneau skiers dangling on chair lift

    by Associated Press on Mar 28, 9:29

    JUNEAU, Alaska (AP) – A weekend power outage at Juneau’s Eaglecrest Ski Area left 200 skiers temporarily dangling. The Juneau Empire reports three chairlifts that use power from Alaska Electric Light & Power shut down Sunday morning during an outage. Alaska Electric Light &Power spokeswoman Debbie Driscoll says a squirrel made contact with energized and […]