Anglo American’s pullout from Pebble is hardly a death knell for the promising but beleaguered mineral prospect in Southwest Alaska. But the move increases the chance of an important shift in the project, one that could lead to a less environmentally risky design than the massive, open-pit option that has sparked widespread opposition.
That’s the opinion, anyway, of Paul Metz, a longtime mineral economics expert from the University of Alaska Fairbanks.
With Anglo departing, Rio Tinto is now the only major mining company invested in the project. Rio Tinto, headquartered in London, holds 19.8 percent of Northern Dynasty Minerals, the junior mining company from Canada that has long led efforts to develop the prospect.
Rio Tinto has said it would support an underground mine at Pebble, while rejecting the open-pit approach that many believe will play a large part of Northern Dynasty’s eventual plans.
The Pebble Partnership, once owned half by Anglo American and half by Northern Dynasty, is now working on a transition plan as Anglo backs out, as was publicly announced earlier this week, an official with Pebble said.
The partnership has not yet submitted a mine plan for permitting to state and federal officials. That was expected to happen by the end of this year, and the state was expecting to see an open-pit proposal based on past documents submitted by the companies, a state official said.
Northern Dynasty, whose only asset is the copper, gold and molybdenum prospect that could be worth $300 billion, will need a company the size of Rio Tinto to get the project into development, said Metz.
With Rio Tinto now the sole major partner — over the years Teck Cominco, Mitsubishi Corp. and now Anglo have pulled out — it’s possible that Rio Tinto will play a more prominent role.
If so, and if it pursues the underground approach, that could improve the public perception of the mine, Metz said.
Anglo did not cite public resistance as the reason it was backing out. Instead, it said it wanted to focus on lower-risk prospects. But opposition from environmental groups, commercial fishermen, politicians and others — not to mention a potential shutdown by the Environmental Protection Agency — increased the project’s risks. Observers expected that numerous lawsuits would be filed at every step of the permitting process, delaying efforts for years.
Large-scale underground operations are environmentally safer than open-pit mines, though they’re costlier, said Metz. Because extraction takes place beneath the ground, they result in far less surface disturbance and in part because of that, less chance of toxic runoff, Metz said.
That’s important because the prospect is located near the headwaters of tributaries of two of the largest rivers — the Kvichak and Nushagak — draining into Bristol Bay. Many fear open-pit mining in particular will devastate the bay’s valuable wild salmon fishery, in part by destroying salmon spawning habitat.
The environmental lobby believes the Pebble prospect will be an open-pit project no matter who is involved, in part because of the huge capital costs that must be paid up front to build infrastructure in the remote region, said Tim Bristol, Alaska program director for Trout Unlimited.
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