The Alaska Industrial Development and Export Authority (AIDEA), the owner of the Skagway ore terminal recently announced that approval of a $7.5M expansion of the ore terminal. Yet the project is on hold as the proponent Eagle Industrial Minerals disputes the financial conditions.
Eagle Industrial Minerals Corp., a privately held corporation, proposes to reprocess tailings from the old Whitehorse Copper Mine to extract magnetite and reclaim the site. The project has completed a land lease with the Yukon government and has completed the YESAB portion of the permitting process, with the water license portion pending. The project currently expects to begin producing magnetite in 2Q 2013. The magnetite will be shipped as iron ore to Far East steel makers through the existing ore terminal in Skagway, Alaska.
The Alaska Industrial Development and Export Authority (AIDEA) is a public corporation of the State of Alaska. It was created by the Alaska Legislature to “promote, develop and advance the general prosperity and economic welfare of the people of Alaska, to relieve problems of unemployment, and to create additional employment”. AIDEA accomplishes this through its Credit and Development Finance Programs.
Mr.Chuck Eaton, the President of Eagle, stated that negotiations with AIDEA have ‘broken down’ on the agency’s insistence that that the financial aid (loan) be repaid within 4 years, the length of the project, rather than over 50 years the expected life of the asset. He stated that the terminal expansion is essential for the Whitehorse Copper Tailing project to proceed.
At risk are 75 good paying jobs in Whitehorse and Skagway. Financing the asset over its 50 year life makes sense in this case. AIDEA is owner of the ore dock and seems to be adopting a hard line stance by insisting on a 4 year repayment based on the available information in the press.