Matanuska-Susitna Borough

Gravel at Port to generate revenue

Mat-Su | Patty Sullivan | Friday, August 18, 2006

PALMER—In its first large gravel sale from Port MacKenzie, the Matanuska-Susitna Borough will generate about $550,000 the first year of a three-year contract. The contract allows for extensions, which if exercised could mean up to eight million tons would be mined having a value to the Borough of about $16 million.

The MAT-SU Assembly gave Manager John Duffy approval Tuesday night (July 18) to enter into a contract for sand and gravel with Alaska Interstate Construction, LLC, the prime contractor for the Port of Anchorage. The Port of Anchorage will use the gravel to expand its port.

The gravel deal also will add another customer to the Port and a second commodity to a privately-operated conveyor system there. In 2005, the conveyor loaded six ships. A combined 145,337 short tons of wood chips were shipped to South Korea and Japan. Nana Services/NPI, LLC owns the conveyor. Now gravel will be moved across the conveyor and loaded onto a ship for the first time.

AIC said in a letter that the company plans on extracting six to eight million tons of sand and gravel beginning in late July or early August. If six to eight million tons are eventually mined the revenue for the Borough could range from $14 million to $16 million. The contract fixes the rates for the high quality gravel at $3.61 per ton.

The contract is significant. Selling the gravel not only brings in revenue but also makes lands in the Port district useful for future commercial and industrial sites by reducing the grade of a gravel moraine. The site for mining is more than a 100 acres and west of the Don Young Road, the road that leads to the Port.

For more information contact Community Development Director Ron Swanson at 745-9631.