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Vol. 16, No. 13 Week of March 27, 2011
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining News: Can mining and Alaska co-exist?

Anglo American CEO says benefits from Pebble would be felt worldwide; a premature veto of the project also would reverberate

Shane Lasley

Mining News

Can mining and Alaska co-exist? This query was the crux of Anglo American plc CEO Cynthia Carroll’s message to Alaskans attending a March 3 gathering in Anchorage sponsored by the Resource Development Council.

Carroll, whose company owns a 50 percent stake in the Pebble Project, said economic benefits from developing the enormous copper-gold-molybdenum project would emanate from Southwest Alaska and extend around the world, a message that resonated with the pro-development crowd that filled the room to hear the early morning speech.

“The United States of America and the State of Alaska has a world-class ore-body in its territory. An ore-body on state land designated for mining, whose development would bring billions of dollars of investment and help generate many hundreds, perhaps thousands of much-needed jobs for many decades. The USA and the wider world depend increasingly on the kinds of minerals that lie underground, north of the villages of Iliamna and Newhalen and west of Nondalton,” Carroll said.

Opposition groups assert that the Bristol Bay region, where the deposit is located, is not suitable for large-scale mining, and have petitioned the U.S. Environmental Agency to use its authority to strike down the possibility of developing Pebble, even before its 50-50 owners, Northern Dynasty Minerals Ltd. and Anglo American, submit applications for operating permits – an option the federal agency has yet to rule out.

Addressing the potential threat to development at Pebble, Carroll said, “The EPA has an important role to play in the permitting process. The intervention of the agency at this stage, however, introduces great uncertainty for anyone engaged in economic activity in the region. Uncertainly deters investment at a time when the United States and the State of Alaska need the revenue and jobs that major projects such as Pebble bring to the table.”

She said the Pebble Partnership should be afforded a chance to see if it can develop a mine plan that belies the concerns of those that are against developing the mammoth mineral deposit.

“The federal government has put more than a third of your state into protected areas where development is unlikely ever to take place. On the other hand, the State of Alaska has received lands that Alaskans assume will be used to support your economy. Pebble is located on just such lands,” Carroll said. “We have been invited in to see whether we can develop those lands. We should be given the opportunity to prove we can do it right.”

Financial rollercoaster

The Anglo American CEO prefaced her remarks with an overview of the global economic scene since she last visited Alaska in 2007, characterizing the financial events of the past three years as a “roller-coaster ride.”

“Following the collapse of several major financial institutions in late 2008, there was widespread fear of a global economic depression. The world economy suffered a severe setback with a contraction in world GDP, most notably in the advanced economies,” she said. “The (United States) and China led a massive coordinated policy stimulus – these interventions helped to stabilize the financial system and support economic activity, particularly in the emerging economies.”

Carroll told the audience that growth in emerging economies such as China and India, coupled with the green revolution in developed countries, will help drive up the demand for copper and the need to develop world-class deposits such as Pebble.

“This is what is driving our business today: The world needs metals and minerals now more than ever. The products that Anglo American produces are absolutely vital to fuel growth in developing economies and to support the ongoing technological revolution in developed countries,” she said, adding, “For some advanced economies, such as the U.S., the domestic mining industry is central to creating economic growth – from sparking investment in critical infrastructure, to providing the critical minerals for a sustainable, green economy.”

The economic benefits of a mine at Pebble, Carroll said, would center in Southwest Alaska.

“What we have heard over and over again is that large parts of the state still lack basic energy, communication, and transportation services because Alaska has not yet benefited from the infrastructure development that transformed the Lower 48 last century. As a result, the cost of basic necessities like milk and diesel are excessively high. These high costs combined (with) a lack of job opportunities place the very existence of many (Alaska) Native villages at risk,” she said. “Pebble can help spur the construction of modern transportation, communication, and energy infrastructure that places like Southwest Alaska desperately need to reduce their cost of living.”

Fish and mining

Pebble opponents argue that developing a mine at the colossal deposit would put world-class wild salmon runs in the Bristol Bay region at risk, an assertion Carroll categorically disputes.

“I want to make one thing absolutely clear: Fish and mining can co-exist,” the Anglo American CEO avowed. “Much of what I hear from the opposition to Pebble claims that this is not possible. They are purely and simply wrong. With the proper protections, copper mining can co-exist with a healthy salmon fishery.”

Carroll cited Red Dog, Fort Knox and Greens Creek as examples of contemporary Alaska mines co-existing with downstream fisheries. She also cited 2010 record salmon runs in British Columbia’s Fraser River as a striking example of mining and salmon sharing the same watershed.

“This major river system does not just have one or two copper mines in its headwaters – it has several mines and a whole host of other industries from logging to gravel, agriculture, and extensive urban development. These are industries that have been active for many decades. For example, the Highland Valley mine is the largest copper mine in Canada and has been operating for nearly 40 years. Yet the Fraser River supports a vigorous salmon run. Better still, in 2010 the Fraser River system saw a sockeye salmon return of 34 million (fish) – the highest since 1913,” she said.

Despite the mining industry’s recent success in co-existing with nearby fisheries, Carroll said the Pebble Partnership must remain diligent in developing a mine plan that ensures the protection of the Bristol Bay fishery – a proposal that will be vetted by a world-class permitting process.

“Over the years, a permitting process has been built up which applies among the most rigorous environmental standards in the world. Your standards can ensure co-existence of a healthy mining operation, and a healthy salmon fishery,” she said.

A choice looms

Pebble opposition groups have employed myriad tactics to stifle development of the primarily copper-gold-molybdenum deposit, the latest of which could stop the project before it enters the permitting process.

“There have been multiple attempts to block Pebble – through a ballot measure, through the Alaska Legislature, and more recently through federal agencies,” Carroll observed.

Though Alaskans rejected the ballot proposition in 2008 and Pebble-targeted legislation has gained little traction in the Legislature, the possibility that the EPA will exercise its authority under Section 404(c) of the Clean Water Act to prohibit the discharge of material from Pebble looms over the project. This would prevent development of the proposed mine.

The EPA is currently conducting a year-long study on the Bristol Bay salmon fishery and the potential effects of large-scale development on the Southwest Alaska watershed where Pebble is located.

During an opening statement at a U.S. Senate Appropriations Subcommittee hearing March 16 on EPA’s 2012 budget proposal, U.S. Sen. Lisa Murkowski, R-Alaska, pressed EPA Administrator Lisa Jackson on the agency’s motives in conducting the Bristol Bay study.

“I’m concerned by the process that the EPA is using to conduct a watershed assessment for Bristol Bay. This assessment is in response to a petition from the environmental community to block the proposed Pebble Mine under the Clean Water Act. This is a controversial and very complex issue. I have not taken a position on the mining project itself because I believe it is premature to do so before the company has even submitted a permit application,” Murkowski told Jackson. “For this same reason, the EPA should be completely transparent in conducting this watershed assessment – not simply use it as cover to support a later decision to veto the mine.”

Alaska’s senior senator previously forewarned, “Any effort by the agency to block responsible development before a project has even been proposed would be unprecedented and would have a chilling effect on the state’s economy.”

A sentiment echoed by Carroll during her presentation in Anchorage.

“Investors such as (us) look to the regulatory framework of the United States of America as (being) rigorous but reliable. I hope and trust that the EPA will commit to refraining from exercising any premature veto over development in Bristol Bay, and, instead, play its well-established role during the consideration of permit applications,” she said.

Carroll called on Alaskans to hold their judgment on Pebble until the partnership presents a plan that can be evaluated by stakeholders and vetted by a rigorous permitting process.

“So I say to you that you face a choice: To grasp this opportunity; reinforce the United States of America and Alaska as a jurisdiction that is open for responsible business; allow due process to continue; leave open the opportunity to reinvigorate an entire region, helping protect, not destroy, (Alaska) Native culture that is critically at risk; open up a major new revenue stream for the Alaska treasury, potentially for many generations of Alaskans; and make decisions on all this only once the information has been made fully available through the most transparent development project that Alaska has ever seen; or, to listen to disingenuous propaganda that seeks to force you into a false choice, between mining and fish,” Carroll concluded.

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