$420 million (US) Cominco project Grade makes Red Dog viable

About 100 miles north of the Arctic Circle and just a short flight to Alaska’s border with the Soviet Union, Cominco Ltd. (TSE) is rapidly developing its Red Dog mine, the largest and richest zinc discovery (in terms of proven reserves) since Broken Hill in Australia.

In the next few months, dozens of barges will arrive at Red Dog’s port facility on the Chukchi Sea, carrying equipment and infrastructure for the massive $420-million(US) mining project.

Reflecting proven construction techniques in the north, the concentrator will consist of 11 modules (all assembled in the Philippines) while 300 accommodation modules are being put together in Boise, Idaho.

To finance the development, Cominco Alaska has signed agreements with a consortium of banks for a $200-million construction loan and a $100-million revolving line of credit. At full production, 750,000 tons of concentrate will be produced annually at Red Dog, 50% of which will go to Cominco’s smelter at Trail, B.C.

As you can well imagine, the scope of the project is enormous, and so are the problems servicing the isolated port and mine facility. As an example, one contractor had to use a military munitions transfer centre in Puget Sound near Seattle to load a huge shipment of ammonium nitrate (a commercial explosive) onto a barge for the long trek to Red Dog. What makes Red Dog fly, given its location and lack of infrastructure? Tonnage and grade mainly (85 million tons averaging 17.1% zinc, 5% lead and 2.4 oz silver, to be exact) — but several other factors are important too. With a low strip ratio (0.9:1) and just 900,000 yards of pre-production stripping, the deposit will be relatively easy to develop and mine; and the flat, half- mile road haul to the plant will only require 3-4 haulage trucks (85 ton) to feed a 6,000-ton-per-day milling operation.

The 54-mile access road from the port to the mine site is 95% completed, The Northern Miner learned first hand on a recent visit to Red Dog. Underlying it is a thick geotextile which is used to distribute the load of the road over the tundra. The roadway traverses state- owned land and land owned by NANA Regional, a native corporation which is Cominco’s partner in the venture. The drive to the port facility is quite impressive and, at this time of the year anyway, the terrain doesn’t look inhospitable. Indeed, much of the area resembles prairie farmland, with green vegetation covering most of it. The availability of wild blueberries to man and bear alike probably explains the warning signs at the mine site to watch out for Grizzlies.

Willie Hensley, the native president of NANA who is also a state senator, said that NANA was formed in 1972, at which time it began to pursue native land claims with the federal government. As things turned out, NANA ended up with the land hosting the Red Dog deposit which Cominco had acquired by staking. In the end, however, Hensley said that NANA chose Cominco to develop the deposit because of “its northern experience” and also because “its numbers were good.”

The native organization has many business interests throughout Alaska and annual revenues of $25-40 million, he claimed. Native “shareholders” are paid dividends and Red Dog will provide a source of income and jobs for native peoples well into the next century, he emphasized. (Present reserves are sufficient for over a 50-year mine life and there is plenty of additional potential in the region.)

With operations scheduled to begin in early 1990, the pace of activity has increased drastically in recent months, especially at the port facility where ice conditions make for a limited shipping season. Primary contractors are currently installing the offshore conveyor supports, the concentrate storage building, and three 2.3-million-gallon, double-walled fuel storage tanks. One such tank was installed last year.

Because of ice conditions, concentrates can only be shipped out over a maximum 110-day period. So about 10 months’ production will be stockpiled in the concentrate storage building until the port is ice free. Shipments will be made from the mine site to the port throughout the winter, the exception being a short period during the caribou migration period.

Meeting construction deadlines and design parameters for the various components of the project has certainly been “challenging,” Duane Gingrich, Cominco’s project engineer, explained to The Northern Miner. But he conceded that’s all part of doing business in the north. Gingrich said the mine site is located on “warm permafrost” which is very sensitive because it’s “just below freezing.”

Slate in particular has caused problems, he noted. As long as it is kept frozen the rock is stable enough but when it’s thawed the slate almost turns to slurry. So the material becomes too unstable to build on, he said. In some instances, the slate has to be replaced with other rock fill which is very costly.

Two buildings will require what he describes as a “natural cooling system.” Underlying material will have to be exposed to the outside elements to prevent thawing. Thermostatically-controlled fans will blow cool air down vent ilation ducts to the unstable ground keeping it frozen, he noted.

About 8,000-10,000 yards of concrete will be needed for foundation work and most of the cement will be shipped in from Seattle, Wash. The majority is for foundation work at the mine site; consumption at the port facility will be negligible. Finding suitable aggregate for concrete has been difficult and Gingrich emphasized that they have to use “the materials available.”

A lubricant is added to improve the “flow characteristics” of the concrete and air is entrained in the mixture to allow for expansion and contraction under extreme temperature conditions, he added.

Port construction began in June, 1986, and work at the mine site a year after. With permanent road access established, heavy equipment has been moved into the mine site and the pace of development has increased dramatically. The transportation system, which includes the 54-mile road, a shallow water dock and offshore concentrate loading facility, plus associated site facilities, is being financed by the Alaska Industrial Development and Export Authority (AIDEA).

Offshore loading conveyor supports should be installed by October and the service and accommodations complex will be finished by December. Work on the 35,000- ton concentrate storage building will commence this August and site preparation for the tailings and water supply dams is under way.

Up to $175 million has been authorized by the state government for this work. Under the agreement, Cominco will guarantee AIDEA a 6.5% return on its investment, pay an annual toll fee of approximately $12 million over the life of the project, pay operating and maintenance costs, and make the system available to other companies wishing to use the facilities.

The Red Dog deposit was discovered by the late Bob Baker who brought it to the attention of Dr Irving Tailleur at the U.S. Geological Survey. What Baker saw from the air was a gossan or color anomaly — and not a particularly good one at that given the extent and richness of the orebody beneath — The Northern Miner observed.

The main deposit, a nearly flat elongated stack of mineralized lenses extending for about 4,400 ft along strike, varies in width from 200 to 1,400 ft and higher grade portions of the deposit reach 450 ft in thickness. The stratabound accumulation of silica rock, barite rock, and sulphide rock, hosts several mineral types, most prominent of which are: sphalerite, pyrite, marcasite, and galena with trace chalcopyrite. The sulphides are generally fine grained.

The deposit was probably formed close to a vent and by a combination of sediment replacement and deposition on the sea floor. Some of the silica rock was formed on the sea floor as evidenced by delicately preserved worm tubes, Cominco notes.