Environmentalists and economists can agree on one thing- if opened, Graphite One’s planned mine on the Seward Peninsula would be a big deal. The deposit is the largest known source of high-grade graphite in the United States. According to the company’s new feasibility study, the graphite could help generate over 43 billion dollars in revenue for the Canadian mining company.
Taking into account infrastructure costs, taxes, and other expenses, Graphite One has placed the net present value of the project at $5 billion. Despite the eye-watering numbers, the company’s Senior Vice President of Operations, Mike Schaffner, said it's not that big of a deal.
“So in terms of mining, this isn't a huge mine. It'd be similar in size to Red Dog when it started out,” Schaffner said.
But there will be some big changes to Nome and the surrounding region, that’s if the project earns the nearly 20 permits it needs to enter operations.
Graphite One plans to mine year-round, meaning it will need to plow and maintain nearly 50 miles of road linking the remote site to Nome through rain, snow, and sleet.
During the winter when sea ice shuts the Port of Nome down, graphite hauled into town will rest in one of nearly 11,000 specialized containers Graphite One plans to custom-build for transporting the graphite. The company plans to build a sprawling, 24-acre yard near the port to store the material.
“At the start of the fall they would be all empty, and by the spring when you're shipping they'd be all full,” Schaffner explained. “You just continually rotate those out with the site, and fill them up and bring them back.”
The Port of Nome has long-sought to deepen and expand its facilities but has run into challenges affording the over half a billion dollar project. Once complete, it would allow large container ships to dock in the port, reducing complexity and time spent loading containers.
Amidst the uncertainty, Graphite One has made plans to use self-loading ships. If the port isn’t ready for deep draft traffic, the ships will float offshore and pluck containers from barges making numerous round trips a day.
Powering the project
The feasibility study suggests that once operational, the proposed mine would draw 12.5 mW of power – over twice the amount of power the entire city of Nome draws. The leading proposal for generating the power is a trio of diesel generators, with one running on standby.
Graphite One is still exploring alternatives to the diesel generators, including wind, solar, and even a nuclear microreactor.
“You get a lot of wind up there… but it's a long term investment. Solar energy, surprisingly enough, is one of the cheapest, but that doesn't work well at Nome six months of the year," Schaffner said. "The nuclear is very favorable because it's got no carbon footprint, but they’re not far enough along yet, and they've got to be socially acceptable.”
Big changes to the environment
The proposed mine will span nearly two miles along the Kigluaik Mountains, although graphite has been detected along an almost 10 mile swath.
“I can't foresee a situation where we would mine the whole deposit,” Schaffner said. “But the good news is there's definitely, as long as there's a need for graphite, this deposit would be able to supply that.”
Graphite One envisions an open pit mine for the site with massive, 100-foot-wide concentric circles lapping around the pit. Aided by gassed-emulsion explosives, the mine would grow deeper and wider as material is scooped out and processed. Four rotating crews would work two 12-hour shifts a day year-round, with just 13 days in the schedule for weather delays.
Between the diesel generators and the steady hum of processing, some noise pollution is expected. While it won’t be noticeable in Nome, the study suggested that nearby communities Teller and Brevig Mission may experience “some level of noise impact” from the mine.
Once mining is complete, reclamation work would begin. A plastic liner would be laid down to prevent oxygen and water from reaching any potentially acidic materials exposed by the mine. A specialized growth media would be placed on top to help domestic plants return to the area.
Schaffner said he ran a mine for 15 years before leading its reclamation plan and felt confident in the industry's current best practices to restore the land.
“I can assure you some of the best hunting in that area is on what we reclaimed,” Schaffner said. “Because when you reclaim it, you set it up for success for the animals and the shrubs and the berries."
The entire reclamation process, according to the feasibility study, would take about a year to complete.
What’s in it for the region?
30 miles of the Kougarok Road would be plowed and maintained year round and open to the public. A determination has not been made on whether to open up the new, 17 mile access road winding through Mosquito Pass to residents.
Schaffner said a Subsistence Advisory Committee convened by Graphite One weighed in on the matter.
“Based on the feedback we've got from the SAC committee and the local residents we can make a recommendation, and the recommendation we've got so far is that they would like it to be private,” Schaffner said. “We can deal with it either way on our side, but we'll roll with the recommendations from the local residents.”
The City of Nome would enjoy an influx of revenue from sales and property taxes by way of 200 new residents working the mine. But with the project operating outside of city limits, the city is left without a way to tap into the project’s profits like a borough could. Meanwhile, the study said the project will generate over $4.5 billion in taxes for state and federal governments.
Schaffner confirmed that the 20-year project expects to pay $1.6 million in port fees to the City of Nome. The company also expects to award a contract worth $5.6m to a local trucking company.
Graphite One also launched a partnership with Bering Straits Native Corporation, with the corporation investing $2 million into the project. The deal gives preference to BSNC-owned businesses for service contracts and materials. Graphite One also launched annual scholarships for BSNC shareholders.
Steps to operations
Following the completion of its drilling program last summer, Graphite One has scaled back plans for this summer with just three weeks of work planned. Schaffner said the company will focus on collecting additional data needed for its upcoming permit application process.
The process is expected to take several years, although the U.S. Department of Interior announced last week plans to fast track critical mineral permit decisions down to just 28 days. State and local permits may still take years to acquire.
The company also needs more capital to bring the project to fruition, with the mine itself carrying a billion dollar price tag. Its planned processing facility near Niles, Ohio is expected to cost nearly $4 billion.
Schaffner said the company has a verbal commitment for a $325 million loan from EXIM Bank. As Graphite One builds capacity at the Ohio facility, it hopes automakers like Tesla and GM sign on to contracts for the mineral essential to building electric vehicle batteries. Graphite One signed a deal with EV maker Lucid Motors last year, although its for synthetic graphite produced at the Ohio plant.
The feasibility study envisions the mine will begin construction in 2029 with mining activities ramping up to full production in 2030.
Graphite One will update the communities of Nome, Teller, and Brevig Mission on the status of the project in May. The community meeting in Teller is set for May 20 at the Bingo Hall, Brevig Mission's on May 21 in the Multipurpose Building, and at Old St. Joe's in Nome on May 22.
