Graphite One listens to concerns at meeting in Nome
By Diana Haecker
In a series of meetings in Teller, Brevig Mission and Nome last week, Graphite One Alaska updated the public on their plans to develop a graphite mine on the northern slopes of the Kigluaik Mountains and to hear people’s concerns and input.
Old St. Joe’s Hall was packed on Thursday evening for the meeting that lasted over three hours.
After ten years of conducting baseline studies, drilling programs and preliminary work, Graphite One has finished a feasibility study in March, which now allows the company to go on the U.S. stock exchange to get investors for the project and approach banks for loans to bankroll the projected $949 million cost to build the mine.
Graphite One Inc., a Canadian company, is currently traded at the Toronto Venture Exchange, with an ownership of 50/50 Canadians and U.S. shareholders. The company owns Graphite One Alaska, the subsidiary that aims to bring online the proposed graphite mine north of the Kigluaiks, about 50 miles north of Nome. A second subsidiary plans the development of an advanced graphite manufacturing facility in Ohio.
Presenting for Graphite One Alaska were Vice President of Operations Mike Schaffner, Vice President Mining Kevin Torpy, Environmental and Permitting Manager Ed Fogels and Project Manager Loren Prosser.
On the outset, Schaffner stressed that Graphite One welcomes input and that previous meetings have “significantly changed how we’re building this project. So, continue to give us your ideas,” he said.
And comments were flowing. In passionate but respectful tone, community members expressed concerns about the proposed access road, about spoiling a subsistence-rich area for profit that won’t be shared with the communities most affected by the mine, Teller and Brevig Mission. Other comments welcomed the mine and drew a comparison to the economic boon that the Red Dog zinc mine brought to the Kotzebue and NANA region.
But before the floor opened to comments, Graphite One offered information on the proposed mine. With the feasibility study in hand, a few things have changed compared to Graphite One’s pre-feasibility plans that were presented in prior meetings. For one, due to changing market conditions and greater demand, plans were adjusted for a much larger throughput of material through the mill, from 2,800 tons a day as envisioned in the pre-feasibility study to 10,000 tons. To make this happen, larger equipment will be put to work with the same amount of people working on the project. Another significant change has to do with employee housing. At first the company proposed a camp at the mine site but now they plan to create a subdivision in Nome, assisting employees with financing, co-signing their mortgage and after a number of years granting the land to them. There would still be camp style housing in Nome for those employees from the villages, who would travel home on their days off. With the bigger output, more traffic, bigger trucks and larger ships are necessary to move the graphite from mine to port.
Big Picture
Mike Schaffner said that the main use for graphite these days are electric car components. Each electric vehicle, he said, contains 10 kilograms (about 22 pounds) of graphite. China supplies 100 percent of graphite used in electric cars and since no graphite is produced in the U.S., the government through a $37 million Dept. of Defense grant financially supported the feasibility study, citing “national security” reasons. As demand for graphite is growing, the mining plans call for a much greater output than initially forecasted.
The mine
According to Vice President of Mining Kevin Torpy, the mine is designed as an open pit mine, with a drill and blast program, material will be loaded into large mining trucks, hauled to the processing plant, where the graphite is separated from the rock. The product leaving the mine would be a fine, 95.5 percent graphite concentrate, which is then put into 20-ft containers.
The tailings will be dewatered and put in a dry stack facility, which does not require a dam structure.
A power plant is on site, as is a fuel storage facility holding 850,000 gallons of fuel. The entire fuel consumption is estimated at 8 million gallons per year, requiring five tanker ships delivering fuel to Nome and additional storage capacity.
The mine’s life is expected to be 20 years. Aside from work force development, additional creation of housing in Nome, the fate of the mine hinges on significant infrastructure development.
Infrastructure
Two things need to happen to make the proposed Graphite One mine a reality as the company envisions it. First, road improvements and road building. In order to access the remote mine site, it would be necessary that the State of Alaska reconstructs 30 miles of the Kougarok Road and then builds a 17.3-mile access road across state land to allow industrial truck traffic between the mine site and Nome. Graphite One projects 12 tractor-trailer trucks transporting containers of the graphite concentrate from the mine to the port of Nome for shipping during the ice-free season.
Asked about the currently pot-holed Kougarok road, Schaffner said, “The one thing I can guarantee you is, we could not drive equipment on the road in the condition it’s in. It would break down. I mean, the road you guys have is right now would not be sufficient for equipment to run across.” He said that the Kougarok Road is a state highway and Graphite One is not allowed to maintain it. He said Graphite One is in negotiations with the State DOT to see if it’s permitted to help make payments to keep the road maintained or “if we could help them with a contractor to maintain that road.”
The access road would be a private road, not open to the public. No details were discussed as to how that road would be paid for. Vice President of Mining Kevin Torpy said that he has flown the route with the Commissioner of the DOT and is in talks with the local DOT Superintendent Calvin Schaeffer on how to improve and “cap” the road to support the traffic they anticipate.
The first being the concentrate shipment out. The plan is to truck the approximately 7,000 20-ft. containers year-round from the mine site to the port of Nome, translating to 12 double tractor trailer trucks making the round trip a day. Also, on a daily basis, two double trailer trucks would deliver fuel to the mine. Adding to the daily traffic would be four busloads carrying workers back and forth for each shift, plus other miscellaneous supply trucks going to the mine. Currently, the DOT only does snow removal to Banner Creek. With year-round trucking, even through the winter months, the operation would need to be supported by significant road maintenance and snow removal efforts.
The second crucial infrastructure component would be the timely expansion of the port of Nome. In order to ship the containers out, the Port of Nome expansion and its deep draft access would allow container ships to dock and take on the projected 7,000 containers with graphite concentrate for shipment to a plant in Ohio. “We need to be able to bring in 40-foot depth draft, self-loading container ships,” said Torpy. One of these ships is capable of carrying 1732, 20-foot containers per load, and Graphite One anticipates needing nine of those per summer.
If the draft is not deep enough for the ships to dock, the containers would need to be lightered from port to the ship anchor in deeper waters. Currently, there is no container crane at the port of Nome.
Torpy said that they will not contemplate shipping through Grantley Harbor, Tuksuk Channel and into Imuruk Basin, mostly for subsistence reasons. However, he said, there may be the possibility that they will explore shipping materials and equipment via this route. He talked about “perhaps staging a bit of equipment on the shore at the beginning of construction and taking up a winter trail that wouldn’t have any surface disturbance, just to get us going.”
Local impact
As is common in pitches for mine development, economic upsides, local engagement and the desire to help train a local workforce was pointed out. Schaffner stressed the desire to have 100 percent local hire and highlighted financial support given to Teller and Brevig to the tune of $50,000 per year to use as they please, provided it’s benefiting the community as a whole. According to Schaffner, Graphite One has donated $30,000 in 2023 to the NEST shelter in Nome. Bering Straits Native Corporation invested in Graphite One and although they own only 1 percent of shares, Graphite One made an agreement with the regional Native corporation which gives BSNC a seat on the advisory board and the promise to give preferential hiring to BSNC shareholders and descendants as well as local hire and preferencing local suppliers.
Graphite One has stood up subsistence councils that advise the company on the traditional uses of the land around Imuruk Basin.
What’s the revenue and what’s in it for Nome, asked an audience member. Schaffner said that at 175,000 tons, worth about $980 per ton, the revenue is about $160 million in revenue. The biggest expense is paying wages to employees, next biggest subcontractors. Trucking from mine to port, security on the proposed access road and snow removal, all those would be local jobs. On the operating side, paying for the diesel is biggest cost. He estimated that 20 to 30 percent of revenue goes to communities. Torpy added at one point that it is Graphite One’s sincere desire to establish a local workforce. One of the reasons being, that graphite has a small revenue margin and “we cannot afford to fly people from all over the country to work here.”
Field seasons past and present
Loren Prosser, former Nomeite and former banker, now Graphite One project manager, said that the project site is located where the Cobblestone River drains out of the northern Kigluaik Mountains and overlooks Windy Cove at the Imuruk Basin, three miles to the north. Having hunted and fished there himself, he said, “I love that area.”
He described the deliberate process of Graphite One’s preliminary work and drilling. For the past four years drills were collecting core samples, using 600-ft long drills, producing about 8,000 feet of samples last year. In lower grounds, they did geotechnical drilling to determine where and how deep the permafrost is, to inform engineers designing infrastructure and buildings.
He said in total, there were 90 employees working in the field season last year, with 30 repeat hires; 10 were from Nome, nine from Teller, five from Brevig Mission and two from Shishmaref and a couple from the Kobuk area and the YK-Delta. Payroll impact of these 30 regional employees was $550,000 for the seasonal work.
As for the economic impact for last year’s season, he said, Graphite One spent $1.2 million, spread out over 54 businesses, ranging from pizza delivery to renting of heavy equipment and trucking.
This summer will see no drill program and no further drilling will be done during the permitting phase. However, they will continue the baseline work of surface and groundwater sampling, fish studies and meteorological studies. In July there will be some helicopter traffic, as they will run a fish survey.
Permitting
With the feasibility study completed, the next step is to begin the permitting process. “This is where the engagement with you starts to happen,” Schaffner said. “That is why it’s important why we listened to you all along to get those concerns addressed before permitting and if you still have concerns, that’s where you can voice them.”
Ed Fogels, former regulator of mines with the Alaska Department of Natural Resources, spoke on the required permits. A slew of federal and state permits is needed, but the most important information that he shared was that Graphite One expects that the application for the federal U.S. Army Corps of Engineers 404 wetlands permit will trigger a full-blown Environmental Impact Statement, not just an Environmental Assessment, as part of the National Environmental Policy Act, or NEPA, process. An EIS analyses environmental impacts of a proposed mine plan and alternatives. The requirements for an EIS are more detailed and rigorous than for an Environmental Assessment. In comparison, the Army Corps required only an Environmental Assessment for the Rock Creek gold mine that was built, started up in 2008 to fail and shutter its operations just a few weeks after startup.
Fogels said, the NEPA review could take two to three years. The EIS has three opportunities for public comment and requires two rounds of public meetings. In addition, several state permits are needed, including a water discharge permit from the Dept. of Environmental Conservation and several DNR permits relating to the mining plan of operations and the reclamation plan. “There’s going to be a lot of public involvement process coming up once we apply for our permits,” Fogels said. “Essentially, the government takes over the public involvement process. We will no longer be conducting these meetings, the state agencies and the federal agencies will be. We will be sitting in the back and participating, but it will essentially be a discussion between you and government agencies from here on out, and there’ll be a number of opportunities to do that.”
Fogels said this summer, Graphite One will be working on a visual impacts assessment, noise impact evaluations, land use evaluations and wildlife studies. “We need to do more work on subsistence resources. We want to clearly understand where folks in the area get their subsistence resources and what they what they get, so we can better avoid impacting those, those subsistence resources,” he said.
Fogels spoke on their findings on fish surveys. “We’ve done salmon surveys, where we’ve flown over the rivers and counted salmon. Most of the salmon are in two creeks, the Cobblestone River and the Canyon Creek. Cobblestone river has all five species of salmon. The Canyon Creek has four of the five species of salmon.”
Comments
The public then began peppering the Graphite One representatives with questions and comments. Hold on, said Keith Conger. Having lived in Brevig Mission and having paddled and kayaked Imuruk Basin and the streams of the area with is daughter he pushed back on the notion that there are only two streams with salmon. “We have not been on a single stream where we did not find salmon. So the way you guys put it earlier, didn’t work with me, because there’s salmon in all places up there,” he said.
Conger also spoke on the constant helicopter noise last summer as they were flying directly over cabins on the Kougarok, in disregard of people trying to enjoy their remote camp.
Then conversation turned to the proposed road. The area is not accessed by road, but mostly by boats in the summer or snow machine in the winter. “If you guys put a road in there, that’s a game changer,” Conger said, and he didn’t mean it in a positive way. He challenged the idea that it would be closed to the public as in other area roads people find their ways around gates.
Jim Hansen, local miner and bush pilot, pointed to the Red Dog mine as a fabulous example and stated that Graphite One could be the Red Dog for Nome. He said that America needs this mine, and without it, “America may wither on the vine.”
Others disagreed and were concerned with the impact this mine could have on the environment. Kerry Ahmasuk said that while Nome may see benefits from the mine, Teller and Brevig Mission will not but they will hear the booms and see and feel the destruction of the ecosystem. “I urge you to genuinely listen to our concern for taking the true impact your mine will have on our region, not economically, but environmentally, spiritually, how this affects our day to day lives, our people, land, waters and marine life and mammals.”
Jason Omedelina said he’s finding the plans unrealistic and spoke on the eye sores of “dirty mining” going on out there. Schaffner responded saying, “Don’t feel defeated. Look at how many mines have tried to go to Alaska and how many have success.” Schaffner encouraged people to continue to speak up so that concerns can be heard and addressed.
Keith Conger conjured up the image of a lone dissident standing in front of a tank in the protests at Tienanmen Square. “That’s kind of how it feels here.”
Maggie Miller addressed a group of high school students who attended the meeting and lauded their attendance. “It’s beautiful night. I know this is not something that you probably want to be doing, but thank you for coming because this is your future and this is my future.”
Joseph Nashalook cast his look to the future. “The people we have today here will not see what will happen 50 years from now. These people in Brevig Mission, Teller and Mary’s Igloo are being asked to swallow the double-edged sword and we will never know what will happen to the future descendants. The people in heaven will see their descendants hunting in poor lands, in place that used to be rich with salmon, berries, caribou, moose and musk ox. None of us will know what will be going on 100 years from now and the future descendants will be affected by this one dollar that you guys are trying to earn.”
Dan Holmes asked about the effects of the tariffs threatening trade, and he wanted to know if there is a guarantee that the graphite would be processed in the U.S., not a Canadian processing facility. No, was the answer, the goal is to have 100 percent U.S. chain of natural graphite processed in the U.S.
Arlene Soxie spoke on the cycle of subsistence. “When I was growing up, we went picking greens. We went fishing. We had an abundance of fish that we put away when I was small, because what we picked and what fish that we put away and other animals was supposed to last all through the year. When springtime comes, we repeat that cycle of subsistence. And it really scares me when I think about people ruining our land, our rivers, our oceans. It scares me because the food will deplete. Animals depend on the food from the land, too, and so do people, and the one that you love, that money, it won’t feed you. You can’t eat money, but you can eat the food that you put away.”
An edit was made to reflect the actual throughput numbers of material going through the mill, as updated from the pre-feasiblity study to the feasibilty study.