Skagway and the Yukon have a long, common history when it comes to mining. After a decades-long lease to a private entity, the ore transfer dock will come under the Skagway municipality’s control. The facilities will be upgraded over the coming year. The Yukon government is negotiating with the municipality to secure access for Yukon mining companies to Skagway’s deep water port. The Skagway Borough Assembly Thursday voted to approve the general terms for an export cooperation agreement with the Yukon government.
Yukon government representatives are offering Skagway a deal: they’d contribute over $17 million to Skagway’s marine services platform at the ore dock. The Skagway municipality would retain ownership of the facilities. In return, the municipality would give preferential treatment to some mining companies. Companies in good standing with the municipality and the Yukon government would benefit from a 25% discount for 20 years on all fees imposed by the municipality.
In addition, Skagway would make four acres on the ore dock available for mining companies, plus an additional two acres somewhere else in the municipality. This land would mostly be used for storing ore containers.
Skagway Borough Manager Brad Ryan has negotiated the agreement for the municipality.
Ryan: “I’ve probably argued with -argued? Negotiated?- with the Yukon group for hours about the 35 years. And I’ve gotten comfortable with it for a number of reasons. One is the relationship. I think that is very very important to us. Two, if I do the math, it totals about $13 million for four acres. And the fact that we will be able to yield the revenue off of the dock if stuff is coming across it, and if ore is going out.”
Mayor Andrew Cremata said he’d also like to move forward. He spoke of the need for a diversified economy.
Cremata: “Taking this land and setting it aside for use by industry with an agreement where an entity is making an investment that exceeds the money we could get for it and insuring at the same time that we will have a diversified economy in the face of what appears to be unrestrained cruise ship growth over the next 35 years is very appealing to me.
Cremata said the cruise industry has become dominant in Skagway. He says the agreement with the Yukon government ensures land remains available for ore exports.
Cremata: ‘My fear is that that real estate could quickly be absorbed by entities that are in the cruise ship industry or benefit from the cruise industry. It could be more shops, more restaurants that are open for six months out of the year. And closed in the winter.”
The agreement would last 35 years, with a review after 20 years. There would be no possibility for the municipality to unilaterally terminate the agreement.
That was a sticking point for Skagway Assembly Member Sam Bass, who spoke against the proposal.
Bass: “The idea that we are going to cede control of the ore peninsula to Yukon mines is unacceptable. We cannot develop the ore peninsula as we determine, instead, we must insure that Yukon mines have an area to lay down containers and stockpile their ore for the next 35 years. What if we want to do something different? We can’t, it has to be ore storage until 2058,”
Bass said he wants to consider possible liabilities, and take more time to consider a deal.
Bass: “Let’s also not forget that we are carrying the burden of stockpiling this ore on our waterfront and in our backyard. Now I’m not opposed to that risk, and the containerized system is supposed to be the most environmentally sound method available. But there is still a risk, we can’t ignore that. Now again I am in favor of ore transshipment through Skagway, but the deal has to be good for Skagway.”
Bass argued that it would be a better deal for Skagway to come up with the funds for developing the marine services platform and retain control of its waterfront. He said alternatively, a clause could be included whereas Skagway could terminate the agreement by buying back the Yukon government’s investment.
After debate, the assembly voted to amend the proposal. They voted to guarantee between three and four acres made available to the exporting entities on the ore peninsula, instead of a firm four.
They also voted to have a review of the agreement after 15 years instead of the original 20.
The Assembly then voted 5-1 to approve the general terms of the agreement. Assemblymember Sam Bass was the sole ‘No’ vote.
