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MINING NEWS: Mining and the law: Rio Tinto and the Pebble project
J.P. Tangen For Mining News The author, J.P. Tangen has been practicing mining law in Alaska since 1975. He can be reached at [email protected] or visit his Web site at www.jptangen.com. His opinions do not necessarily reflect those of the publishers of Mining News and Petroleum News. Kenai Peninsula College Anthropology Professor Alan Boraas is a frequent op-ed contributor to the Anchorage Daily News. One of his regular targets for criticism is the Pebble copper project in southwest Alaska. Most recently, on April 14, the brunt of his criticism was the involvement of Rio Tinto in the project.
In Prof. Boraas’ words, news of the Rio Tinto buy-in is “not good for those concerned with environmental and community impacts of the proposed mine.” He notes that Rio Tinto is also involved in the Oyu Tolgoi copper project in Mongolia. He goes on to comment critically on other projects around the world in which Rio Tinto is or has been involved.
The Boraas commentary is worth noting, not because of its accuracy or lack thereof, but rather because it underscores a critical point. The Pebble project is so big that only the heftiest of the world’s mining companies can contemplate taking it on. Of course, we are all concerned about the environment and the social contract that whoever undertakes to develop Pebble must implicitly enter into before it can get the go-ahead to begin construction and ultimate production, but the far greater point is that Pebble, like Oyu Tolgoi, is among the largest known copper deposits in the world. Some would classify them as the two largest.
Copper needed for essential purposes Copper is not an insignificant commodity: We need it for wires to distribute electricity and for pipes to distribute water and for a long laundry list of other essential purposes. The major question that is clearly always before us is where to obtain the copper that allows us to embrace our standard of living.
Like the many other commodities that make our every day life possible, copper must be mined. Contrary to Prof. Boraas’ implication, however, one does not wander into the nearest hole in the ground and start digging it up by the shovelful. The steps and stages of progression from a prospect such as Pebble to a producing mine are long, tortuous and expensive.
The permitting alone will undoubtedly cost hundreds of millions of dollars. Everything from baseline environmental studies to the preparation of socio-economic reports will have to be done and done again. Infrastructure will have to be constructed. An operation of the magnitude that the Pebble project may attain will need to engage perhaps 1,000 full-time workers, most of whom will be drawn from Southwest Alaska, and virtually all of whom will have to be trained. There are also a few small engineering problems that will have to be worked out.
Costs require strong company The costs that will have to be incurred and the long-term commitments that will have to be made cannot be borne by a small group of prospectors sitting around a campfire on a summer night. Only the strongest companies, companies like Rio Tinto, need apply.
These hurdles that must be cleared prior to production are not necessarily bad things. If there is going to be a multi-billion pound copper mine constructed anywhere in the world, it is probably far better to have it here in Alaska than almost anywhere else.
First, we have a dedicated corps of volunteers standing at the ready to point their fingers — indeed, to fire off a lawsuit — at the first misstep. Next we have some of the most stringent environmental laws found anywhere in the world. Alaska and America are well prepared to regulate and oversee a project of this magnitude. Environmental laws are not the end of the story however: There are also the bevy of health and safety laws as well as wage and hour protections that must be observed. In brief, building a mine is a major chore and building a copper mine of this size and duration can only be done by the biggest and the best global companies.
Perhaps Prof. Boraas would join those who yearn for the day when we could put together an all-American mining project; or perhaps he just doesn’t want mining to take place in Alaska. It is hard to tell where he stands by just looking at his comment. Reality teaches, however, that we need copper and that we must mine it where it is found. We should celebrate the fact that we have such an opportunity within our state, and we should take pleasure in knowing that perhaps Rio Tinto will be willing to submit itself to our laws and regulations in order to bring this project to life.
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