The Yukon government has revealed the proposed Skagway, Alaska ore dock project could now cost the territory as much as $44 million.

Meanwhile, questions remain about whether it will actually meet the needs of the Yukon’s mining industry or if more money will be needed for further upgrades.

The planned expenditure is a roughly $20-million increase from spring cost estimates.

NDP Leader Kate White pointed out this increase – shown in the recent fall supplementary budget – is about exactly equal to cuts to the Yukon Housing Corp. and the Departments of Highways and Public Works, and Community Services.

“There is no pretending that those cuts are not financing this government’s new project,” White told the legislature Monday.

All three parties have acknowledged the need for some form of access to an ocean terminal for the Yukon’s mining industry to thrive, but they all have different ideas of how much should be invested, how it should be invested and when it should be invested.

A plan is needed for continued shipping out of Skagway after the 54-year lease allowing for the loading of Yukon ore at the Skagway port ended this year.

The municipality initially sought to end ore shipments altogether and convert the old dock into a cruise terminal until the Yukon government committed to paying to upgrade the facility.

The old dock was mainly being used by Minto Metals, but the Minto Mine was abandoned last May.

The development of several other large mining projects that might need the dock, such as Casino, are far off in the future.

“We don’t have any mines in the Yukon that are going to use it at the moment,” said the Yukon Conservation Society’s mining analyst, Lewis Rifkind. “We’re talking many years away,” he told the Star.

But Premier Ranj Pillai wanted to act now to protect the future of Yukon mining.

“People are looking to invest in the mineral sector and they want to know that if they find something, it potentially can become a mine, they can work with the community hand-in-hand, and then whatever is in that critical mineral can then be exported,” he told reporters Tuesday.

White questioned whether this is the investment that the mining industry actually wants.

“Casino, Kudz Ze Kayah, and Fireweed Zinc,” White said, “they had indicated that they were maybe interested, but we were told that there was no specific commitment from those prospective operators.”

At this point, the government has a non-binding agreement with the municipality and has spent more than $700,000 on initial designs for the dock.

The timeline on the build is about two years, according to Pillai.

Even though the high-end estimate for the expected cost is now $44 million, that may not be the end of the spending.

New local rules mean that different loading equipment will also be needed, and that money only pays for the concrete dock itself.

The Municipality of Skagway passed an ordinance that was signed by outgoing Mayor Andrew Cremata on Oct. 5 mandating that any ore shipped out of Skagway must be transported in sealed containers.

For many years, Yukon ore – including zinc and lead from the Faro mine – was trucked through Skagway and loaded onto ships in the open air.

Rifkind said the new ordinance is something that was clearly a possibility for quite a while.

“There’s been discussions of whether there should be a closed form of shipping the ore out for quite a while,” he noted.

The ordinance also requires a yet-to-be-determined amount of revenues related to the ore shipments to be set aside for environmental cleanup should there be a spill.

Yukon Party Leader Currie Dixon said in the legislature Monday that as a result, all the Yukon is getting for the money is a “blank slate” dock, with none of the infrastructure needed to actually ship ore.

He criticized Pillai for pushing ahead with the project despite uncertainty around what infrastructure will be needed for the terminal.

Pillai countered that the required shipping containers and loaders likely won’t be paid for by the Yukon government.

“You’d be buying containers; you would also be buying a mobile crane unit that would actually move that container onto a ship, and you’d also probably be looking at some trucking solutions,” Pillai told reporters on Tuesday.

“That’s not necessarily the role of the Yukon to be in that business.”

Dixon said there were reports the government had conversations about the new ordinance with the municipality, and that the Yukon government had told them they were in favour of it.

But Pillai said this was a misrepresentation, saying only that he had an “ongoing dialogue” with Skagway officials about the ordinance.

Though he acknowledged the concerns of the people in Skagway, he would not fully validate the history of contamination in the area.

“Many people in Skagway feel there is a tremendous amount of contamination in their community, in their harbour,” Pillai told the legislature.

“A lot of that, they feel, is directly connected to Faro mine operations.” (That mine closed in early 1998.)

According to the Alaska’s Department of Environmental Conservation, it is not just a “feeling” that there is contamination in their community linked to the Faro mine.

“The polluting effects of historical operations at the SOT (Skagway Ore Terminal) left elevated concentrations of lead and other metals and petroleum polyaromatic hydrocarbon (PAH) chemicals of concern (COCs) in harbor sediments under the ship loading dock, extending outward into the basin,” reads an entry on the department’s website.

The Alaskan regulators also found contamination in the soil along the route to and from the ore terminal.

The type of ore being delivered in recent years is different than that from the Faro mine. Most of it was copper ore from the recently abandoned Minto Mine.

Dixon said the ore coming from the Minto Mine did not contain the same contaminants, and that no contamination from Minto ore had occurred.

This suggested the containerization may be unnecessary.

“I’m not aware of any contamination coming from Minto Mine, period,” Dixon said.

This is disputed by information from Alaska’s Department of Environmental Conservation. It documented a violation that was issued to the ore terminal operators in 2015 as a result of a complaint from the municipality that contaminated sludge was being released at the site.

“If contaminated discharges are occurring, they add additional contamination to areas where institutional controls are currently in effect as a result of impacts from historical terminal operations,” reads an entry on the department’s website.

According to Rifkind, spilled copper ore does pose risks to the environment, particularly for salmon populations.

“Let’s use the word ‘poisonous,’” Rifkind said. “I mean, it’s either lead, or it’s going to be copper, which can have very serious impacts on salmon fisheries and things like that when it gets into water.”

Rifkind was hopeful the new containerization ordinance could lead to better practices industry-wide for ore transport, saying in the past the Yukon has been innovative in transportations solutions.

“Maybe the Yukon would then be innovative in sort of how to package ore,” Rifkind said. “So, this might be another innovation that could spread around the world.”

Whatever happens with the containerization issues, Pillai is committed to ensuring Yukon mining has access to an ocean port.

Mining is the biggest private sector employer in the territory, he said, and it adds to employment in many other areas such as hotels and environmental assessment.

But Rifkind made the point that this amounts to a subsidization that could mask unhealthy and unsustainable businesses.

“If the mine is marginal enough that they can’t afford to pay for its own docking facilities, what does that say about the mine?” Rifkind asks.