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Vol. 17, No. 46 Week of November 11, 2012
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining Explorers 2012: Pebble prepares for permitting

With US$107M budget, partners advance toward project description in 2012

Shane Lasley

Mining News

The Pebble Limited Partnership is spending some US$107 million to advance the enormous Pebble copper-gold-molybdenum project in 2012, with the objective of initiating permitting under the National Environmental Policy Act in 2013.

Work programs include environmental studies focused on fish and marine resources, water quality and groundwater hydrology; continued engineering analysis to finalize a project description; geotechnical and exploration drilling; and workforce and business development initiatives.

Pebble Partnership CEO John Shively underscored the employment opportunities these ongoing work programs bring to Southwest Alaska.

“Our site work program is where our local and regional opportunities are realized. This is all about putting people to work and potentially the significant socioeconomic benefits this project could bring to the region, which struggles with elevated unemployment numbers, a lack of year-round jobs and outmigration to urban areas” said Shively.

The Pebble Partnership was established in July 2007 as a 50-50 partnership between Vancouver B.C.-based Northern Dynasty and London-based Anglo American plc.

Under the terms of the Pebble Limited Partnership Agreement, Anglo American is required to invest US$1.5 billion in order to retain its 50 percent interest in the Pebble project. These funds are being spent on the comprehensive exploration, engineering, environmental and socioeconomic programs toward the future development of Pebble.

From the time that the Pebble Partnership was established through the end of 2012, the London-based global miner will have invested some US$500 million to advance engineering, environmental and socioeconomic studies at Pebble.

“We will continue our work to develop a responsible plan for Pebble that meets our commitment to co-existing with the fish resources,” said Shively.

During a meeting with legislators in Juneau, Pebble Partnership Vice President of Environment Ken Taylor said engineers are putting the finishing touches on the project design. He indicated to the lawmakers that the engineering and environmental teams may be ready to submit permit applications for Pebble by mid-2013.

“We are working on trying to get the last pieces of a mine plan put together right now – that is what the engineers are focused on. On the environmental side we are looking at putting together a project description and I think our goal is that within the state’s next fiscal year we would be ready to go into a permitting process,” he said.

Prior to initiating project permitting, the Pebble Partnership plans to undertake a broad-based public engagement program to consult Alaskans and other project stakeholders about the current status of project planning. This public consultation initiative is scheduled to begin in the fall of 2012.

“As part of the process of developing a proposed project description, the Pebble Partnership will be meeting and consulting with the people and communities of Southwest Alaska and throughout the state to allow Alaskans and all interested stakeholders to gain a better understanding of how this project will be built and operated to provide significant benefits to the state and country, while protecting fish, water and other important natural resources,” said Northern Dynasty Minerals Ltd. President and CEO Ron Thiessen.

The project description is expected to include details of the Pebble mine plan, transportation corridor linking the deposit and Cook Inlet some 85 miles (137 kilometers) to the east, deep-water port-site at Cook Inlet; and power generation for the some 400 megawatts of electricity expected to be needed to power the mill and other facilities at the enormous copper project.

According to the most recent resource calculation, the Pebble deposit contains 80.6 billion pounds of copper, 107.4 million ounces of gold and 5.6 billion pounds of molybdenum. That is enough copper to supply the United States’ current total consumption for about 15 years and as much gold as held by Germany, which has the world’s second-largest national gold reserve.

EPA weighs Pebble’s fate

In the meantime, U.S. Environmental Protection Agency is fast-tracking its Bristol Bay Watershed Assessment – a study intended to determine whether to ban the development of Pebble – one of the largest accumulations of copper, gold and molybdenum on the planet.

Under Section 404 of the Act, the Army Corps of Engineers is charged with issuing permits for dredge and fill discharge into navigable waters, including wetlands. EPA was granted veto authority to prohibit, restrict, or deny a discharge that poses an unacceptable adverse impact to fisheries or other water uses.

EPA initiated the Bristol Bay Watershed Assessment in response to concerns from Alaska Native groups, fishing organizations and others who petitioned the agency to exercise its Section 404(c) authority to pre-emptively deny the Pebble Partnership discharge permits that would be needed to build a mine at the world-class copper-gold-molybdenum deposit located in the study area.

Though EPA emphatically denies it has predetermined whether to exercise this authority, a draft assessment published by the regulatory agency in May surmises that development of Pebble and other promising copper deposits in this vast expanse of state-owned land in Southwest Alaska may pose a threat to a world-class salmon fishery found there.

Despite widespread calls to slow down the assessment process, the environmental agency is holding to a timeline aimed at making a determination on the fate of Pebble by the end of 2012. This has many speculating on the rationale for the rushed study. Some propose EPA wants to finalize the process under the current Obama Administration.

Alaska officials say they believe the EPA’s insistence on completing the assessment “in a timely fashion” is a race to finalize a CWA 404(c) determination before the Pebble Partnership has an opportunity to apply for permits under NEPA. By doing so, the federal agency would circumvent any need to consider the state’s management plan for the Bristol Bay region.

The 2005 Bristol Bay Area Plan – which lays out the state’s vision for some 17.5 million acres of Alaska-owned lands in the region, an area larger than West Virginia – sets aside the area around Pebble for mineral development.

EPA has exercised its CWA 404(c) veto authority only a handful of times in the past and never before a project permit was filed.



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