Red Dog Mine is down to one pit, with zinc output expected to fall by nearly half

Teck Resources has finished mining one of the two remaining pits at Red Dog Mine, leaving the Northwest Arctic zinc mine with a single source of ore as its production is expected to fall by nearly half by 2028.

Mining in the Qanaiyaq pit ended between July and September, Teck said in its third-quarter report this week. The Aqqaluk pit is now the only one left, and NANA Regional Corporation has said it will be exhausted by 2031.

Red Dog, about 80 miles north of Kotzebue on NANA land, employs about 600 people, roughly 60% of them NANA shareholders. NANA says the mine funds more than 80% of the Northwest Arctic Borough's budget.

Under the Alaska Native Claims Settlement Act, NANA also shares 70% of its net resource income with the state's other Native regional corporations. Red Dog has supplied roughly 70% of the money shared that way statewide for more than a decade.

The mine produced 462,700 tonnes of zinc in concentrate last year. Teck expects 375,000 to 415,000 tonnes this year and 230,000 to 270,000 tonnes in 2028.

The ore is getting poorer as the mine nears the end of its life, Teck said. Above-average precipitation also caused ground to slip along a known fault in the Aqqaluk pit, forcing crews to mine lower-grade rock.

Higher prices more than made up for it in the third quarter. Zinc averaged $1.74 a pound, up 36% from a year earlier, and Red Dog's gross profit before depreciation rose to 462 million Canadian dollars from 390 million. Teck credited higher zinc prices and by-product sales across its zinc business.

Royalties rose with profits. Teck's Red Dog royalty costs climbed to 440 million Canadian dollars in the quarter from 400 million, and the royalty it owes NANA, to be paid early next year, grew.

"There will be a drop as the mine plays out," Randy Ruaro, executive director of the Alaska Industrial Development and Export Authority, which owns the mine's road and port, told the agency's board in Kotzebue last month. He said he hopes it is "very short-term" because nearby deposits are being developed quickly.

Teck is exploring those deposits 10 to 20 kilometers from the mine. Because they are on state land rather than NANA's, the corporation and the borough would collect less from them than they do now.

On Sept. 1, Teck's mine extension project qualified for FAST-41, a federal program that puts permit reviews on a published, coordinated schedule. Teck says a study due in December could support a decision in the second half of 2027 on building an underground ramp to explore them, and it expects to spend 200 million to 250 million Canadian dollars on the project this year.

Teck's merger with Anglo American, which would put Red Dog under a new company called Anglo Teck, has not closed.