Skagway dock upgrades leave Yukon mining company searching for an alternative

As the Yukon government commits millions to upgrade an Alaskan dock, the mining company that relies on it for international trade is rushing to find a temporary alternative.

Yukon's Minto Metals Corp. has shipped materials out of Skagway's ore dock since 2008. It's the only mine currently using the dock. But the company says that upcoming construction will interrupt shipping there for at least two years.

This month, Skagway accepted the terms of an agreement with the Yukon government on upgrades at its ore terminal. If finalized, the territory would spend more than $17 million (US) to modernize and expand equipment that stores and loads copper ore there. 

Minto declined requests to speak with CBC, but in a news release last week the company said it's now considering other locations for shipping until that work is finished.

The Minto mine is located off the Klondike highway between Carmacks and Pelly Crossing, about five hours north of Skagway.

Minto's copper concentrate is trucked to Skagway, where it's stored until there's enough to fill a shipment. The ore is then sent to a Japanese smelter and refinery, processed and delivered to the Sumitomo Corporation.

Minto needs another way to reach tidewater to keep those deliveries going.

Trucking down the coast 

The second closest port capable of shipping and storing ore is in Stewart, B.C., which Minto identified in its release.

Mining companies in the southeastern part of Yukon already use that port, but it would essentially triple the trucking distance for Minto.

Lewis Rifkind analyzes mining at the Yukon Conservation Society. He said Stewart's still likely the best short-term alternative, but it'll be costly for the company — and the environment.

"They're traveling a much greater distance, so more care and maintenance on the highways are going to be required. And there's also of course the whole aspect of greenhouse gas emissions," he said. "Every time one of those trucks moves it's [belching] a bunch of diesel contaminants and greenhouse gas emissions."

Distance is likely to be an issue anywhere outside Skagway though.

Haines, Alaska, might be the closest alternative. A private company even made an unsuccessful bid this month to buy Skagway's old ore loader so it could move it to Haines and build another ore terminal there. 

But that failed. And Haines would still need to build infrastructure to suit Minto's shipping needs. That's something that conservationists have recently opposed.

When the borough of Haines hosted a meeting with Yukon mining executives last year to discuss a potential ore terminal, Lynn Canal Conservation's executive director said residents didn't want Yukon ore in their town. She pointed to a history of environmental problems in Skagway.

Ore-loading from the Faro mine contaminated Skagway's basin from the 1960s to the 1990s. Bits of zinc and lead ore spilled from the dock's open conveyor-belt system over the years and remediation is still ongoing. 

The old ore loader system will be replaced as part of Skagway's upgrades.

Those upgrades will ultimately increase the amount of ore that can be stored and shipped from Skagway. The majority of the 31 critical minerals listed by the federal government have been found in the Yukon – including large copper, nickel, tungsten and zinc deposits – and the Yukon government has said access to Skagway's port is essential for the future of the mining industry.

But the government is leaving it to Minto to find access to shipping in the interim.

Premier Ranj Pillai said this month that while his government has discussed alternative ports for Minto while Skagway's dock is under construction, finding one is ultimately up to the company.

Cruise ships take priority at Skagway

Upgrades at Skagway will be about more than just mining. They will also increase cruise ship capacity, something Minto was critical of in its release last week.

"Despite Minto's best efforts to reach a mutually beneficial agreement," it said, "the town of Skagway recently came to a decision to shift the focus of its port towards cruise ships and tourism." 

Skagway mayor Andrew Cremata says the town tried to accommodate Minto through the project, but the company never proposed how it would continue shipping ore once work started.

"I know the assertion has been made that we chose cruise ships over Minto. That's short-sighted at best," Cremata said last week. "Ninety-six per cent of our economy is from cruise ships. So cruise ships, by default, have a priority."

Cremata said despite that, Skagway has still agreed to reserve part of its dock for the mining sector and give Yukon mines preferential access.

"I understand lots of reasons why Minto might be frustrated, but I think they should look internally at their issues and not point the finger at Skagway."