Minerals emergency would turbo-charge US mining, Alaska Energy Metals CEO says | Hotter Commodities

Speaking in a recent interview with Fastmarkets, Greg Beischer said that a similar situation in the energy sector in the 1970s led the US to rapidly develop its oil sector to minimize the effects of a supply crisis.

“In an emergency, one can get a lot done,” he told Fastmarkets. “While I fear some sort of metal supply emergency, in some ways I think it might be the best thing to happen in the US – and it could happen.

“China has considerable leverage and control of critical minerals supply chains, and has shown that it’s prepared to weaponize metals. It would be an emergency if a trade war began and China cut off a lot of the metals on which our country relies,” he said.

“I honestly think that America needs to wake up and realize what it’s done to itself, by driving its mining industry away and abdicating metal supply chains all over the world to China and other countries. The country just seemed not to think it was important, and maybe that wake-up call will come during a trade war when metal supplies are cut off,” he added.

Beischer is working to develop the Nikolai nickel sulphide project in the interior of Alaska. It is located a couple of hours south of the US state’s second-biggest city, Fairbanks, which is central to the state and accessible by paved road.

There, the company has discovered what Beischer described as an exceptionally large deposit of nickel sulphide, with accessory amounts of copper, cobalt, chromium, platinum and palladium.

The contiguous, homogeneous deposit would support a profitable large-scale mining operation at the right nickel price, he said. “I view it as a very permittable project, and it would be a very large-scale mine if it were to be put into production,” he added.

Beischer envisions a mine life of more than 35 years for the project at a normal mining rate, based on current internal studies.

Alaska was the focus of an executive order by new US President Donald Trump earlier this week. The order called for the unleashing of the state’s potential for natural resources, including oil, gas and minerals, along with plans to expedite permitting for projects there.

According to Beischer, the executive order is “far more forceful and far reaching than I’ve seen before,” which he attributed in part to the pro-natural resources stance of the Alaskan state governor, Mike Dunleavy.

Aside from Dunleavy being a Republican who has a good relationship with Trump, his wife comes from a major mining region in Alaska, and his daughters work in the mining sector, Beischer noted.

Yet while the state of Alaska is mineral-rich, there are very few mining projects up and running. A key one is Teck Resources’ Red Dog mine, one of the world’s largest zinc operations and a huge contributor to the state’s economic growth.

Beischer was still concerned that projects could become caught up in lawsuits opposed to their development, dragging out the timeframe for approvals.

“My fear is that while the executive orders are positive changes, a new government will come in four years from now and [could] undo them all. If the orders can’t be implemented quickly, and project developments fail to begin quickly too, that could happen,” he added.

Beischer cited Ambler Road as a good example of an infrastructure project designed to dramatically improve logistics in a key potential mining district in northwest Alaska which has never been developed.

The project, he said, was approved under the first Trump administration in 2017-21, then remanded for further investigation before being ultimately rejected by the later administration of former President Joe Biden.

Beischer called for timeframes to be set on permitting approvals to speed them up. “Hand in hand with any kind of permitting reform, there has to be litigation reform as well. That’s the bigger hold-up, really,” he said.

Nikolai project

Beischer’s own journey to the Nikolai project began 30 years ago when, as a young geologist, he was sent to explore at the site for another nickel firm. At that time, the project was completely untouched, and his employer was working on a hunch that the rocks looked the right type to host nickel, with a system like the giant deposits seen at Norilsk in Russia.

Exploration work led to the discovery of nickel in 1995. The company continued for five years until nickel prices fell and work on the project ended. Another company picked up the project in 2003 and worked for around a decade, Beischer said, advancing the project until nickel prices fell again.

Several years after the claims had once again lapsed, Beischer in 2023 decided to restake them himself, and work on the project began once again.

“In the 1990s, we discovered random thick intersections of nickel sulphide but never knew whether or not they were contiguous,” he told Fastmarkets. “But over the past two years we have proved that’s exactly the case. The deposit goes for miles, in fact. It’s a layer of rock that is about 900 feet thick, and so far we’ve proven that it’s more than three miles long – and it’s probably longer.”

The company has already completed an internal preliminary economic analysis, and plans to seek investment to build on this with an independent assessment over the next six-to-eight months.

Energy supply to the project is not yet decided. Beischer noted that Alaska’s electrical grid runs within 50 miles of the project and is currently extending to within 25 miles. But the project would need more electricity than the current grid could supply, with natural gas and hydroelectric power being other possibilities, he added.

In the future, nuclear power could also feed the mine, given that there are plans for a modular reactor at a nearby US Air Force base in the region, Beischer said.

Financing

The main stumbling block to taking the project further at the moment is the price of nickel, because a sustained cyclical weakness is deterring investors, he said.

“It’s really difficult for geologists to find a brand-new mineral deposit of size and scale, but you also have to find it at the right time, especially for a junior company,” he said.

“When nickel is a ‘hot’ commodity, like it was two years ago when we started the company, things are good – we were able to raise capital quite readily. Then we had to raise capital again last year, which was more difficult. But now, it’s going to be quite difficult because people simply aren’t interested in nickel. The price is low, and speculative investors want the ‘hot’ commodity,” he added.

The company is nonetheless in early exploratory talks about partnering with other miners as well as end-consumers such as automotive original equipment manufacturers (OEMs) and battery manufacturers, Beischer said.

“Mining companies have a much longer-term view than speculative investors, so that’s where we’ll initially look to get our capital. We’d also be very interested in strategic investments from processing companies, especially ones that have expertise with hydrometallurgical-type nickel processing,” he said.

“We’ve initiated discussions with some end-consumers, especially battery manufacturers, knowing that in two or three years from now they might be prepared to invest as a partner,” he added.

According to Beischer, there has previously been money available from the US administration to finance projects via the reconstitution of the Defense Production Act, and the company is optimistic this will still be the case in future. Alaska Energy Metals has proposed $56 million in non-dilutive grant financing from the US government, toward which it would also contribute.

This would, Beischer said, allow the company to embark on a three-year plan envisioned to take it through feasibility and mine plant design to tendering permit applications for mine development.

“I am optimistic that we have an excellent chance of getting that grant or some other appropriation in the next 12 months. It would be completely transformative for the company,” he added.

While there is uncertainty around the financing of projects under the US Inflation Reduction Act, the bipartisan realization of the vulnerability of the US to supply chain disruptions will keep funding mechanisms in place, and possibly reinforce them, he said.

“I think that recent executive orders show the mindset, if nothing else, that the Trump administration really will be very, very supportive of domestic mining projects,” he concluded. “I think that has changed overnight, and I believe that funding will come through strongly.”

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