Canadian Pebble Mine partner pulls out

Northern Dynasty Minerals Ltd. and First Quantum Minerals Ltd. announced Friday they have terminated an agreement under which First Quantum would have become a partner in Northern Dynasty’s large Pebble copper/gold project in Alaska.

Pebble Partnership Ltd., Northern Dynasty’s operating subsidiary, appears to be taking it in stride. “For me, today is business as usual,” company CEO Tom Collier said. “I have meetings in Washington, D.C. and I have kept every one of them because we are continuing to press forward.”

Northern Dynasty Minerals and First were unable to reach an agreement on the option and partnership transaction contemplated in the December 15, 2017 framework agreement between the parties, Northern Dynasty said in a press release issued May 25.

“As such, the Framework Agreement has been terminated,” the press release said.

Pebble is large, undeveloped accumulation of copper, gold and molybdenum near Lake Iliamna southwest of Anchorage.

While the resource, which is confirmed by drilling, is very large, the project has been dogged by controversy and opposition from Alaska Native groups in the region because of the proximity of the proposed mine to sensitive salmon streams.

Vancouver, B.C.-based Northern Dynasty has been engaged in exploration and mine-planning over several years, but two previous major mining companies that took a stake in Pebble as Northern Dynasty’s partners, Rio Tinto and Anglo American, withdrew earlier. Over $700 million has been invested in the project over the years in exploration, environmental monitoring and engineering.

Pebble Partnership, the project operator, has filed applications for federal permits to build the mine with the U.S. Army Corps of Engineers and is in the early stages of preparing a Draft Environmental Impact Statement for the project.

The company has also planned additional drilling at the site this summer.

It is unclear just what impact First Quantum’s withdrawal will have on Northern Dynasty’s ongoing work program.

Despite First Quantum’s departure, Collier is still optimistic about the project.

“I believe we will secure the necessary funding to continue the permitting and review process for Pebble under the National Environmental Policy Act. This will result in an Environmental Impact Statement for Pebble,” Collier said in a statement.

“Pebble remains one of the nation’s most important undeveloped mineral resources. It is on state land and is an important economic asset for Alaska. Our project is well defined and we are going to continue communicating with Alaskans about why we believe in the opportunity it represents.”

Opponents to the mine were quick to celebrate.

“Today is a victory of Bristol Bay’s Tribes,” said Robert Heyano, Board President of the United Tribes of Bristol Bay.

“Our voices are being heard everywhere from our villages to the boardroom at First Quantum. Quyana (thank you) to First Quantum for listening to reason and divesting from this toxic project.”

“No project is worth more than a culture or a way of life. It’s fitting that this announcement comes right on the cusp of fishing season, where Bristol Bay will once again harvest millions of salmon for the world,” Heyano said.

While many Bristol Bay residents see the mine as a threat to fisheries, the Pebble project, if built, would also provide high-paying, year-around jobs in villages in the region and much-needed tax base to the Lake and Peninsula Borough, an economically depressed region.

In contrast, many of the economic benefits of Bristol Bay salmon harvests go to out-of-state commercial fishermen who hold most of the more valuable salmon fishing permits in the region, according to University of Alaska studies.

Alaska’s producing mines, in contrast, are staffed mostly by Alaska residents who work year-around, based on the experience of mines like Red Dog, near Kotzebue, and Fort Knox, near Fairbanks. Mining jobs, on average, pay $108,000 a year in Alaska, according to McDowell Group, a Juneau-based consulting firm.

Pebble has meanwhile reduced its project scope to a smaller mine from a large project planned earlier. The company submitted permit applications to the Corps of Engineers late last year. The corps deemed the application complete and has initiated the draft EIS process. If built, the mine would be connected by road to a new port on the west side of Lower Cook Inlet.