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Vol. 12, No. 4 Week of January 28, 2007
Providing coverage of Alaska and Northwest Canada's mineral industry

MINING NEWS: Pebble opponents don’t discourage Northern Dynasty

Fieldwork, community meetings for Pebble project will continue this year against backdrop of well-funded negative campaign

Sarah Hurst

For Mining News

Campaigners against the Pebble copper-gold project in southwest Alaska look set to spend more money than ever in 2007, but for mining junior Northern Dynasty it will be business as usual, with work at the site scheduled to restart in early February. The Vancouver-based company hopes to bring in bigger drill rigs to delineate the Pebble East zone, which has the potential to become an underground mine adjacent to the proposed open pit.

Northern Dynasty will continue holding meetings with local communities and recently hired Sean Magee as vice president of public affairs. Magee had previously been doing consulting work for the company. “For the most part we are focused on the environmental and technical and engineering work, and stakeholder consultation, reaching out to the people in the local communities, getting their input and making sure their views are reflected in the study program and the design,” Magee told Mining News. “Clearly we do have a well-funded opposition group that is using a number of different tactics. Their advertising spend is what you’d expect from McDonald’s or Wal-Mart,” he added.

The company believes that much of the funding for the anti-Pebble campaign has been coming from one individual, Bob Gillam, the president of an Anchorage investment advisory firm, McKinley Capital Management, and owner of a lodge in the Pebble area. Gillam is one of the founders of the Renewable Resources Coalition, a non-profit that is mainly dedicated to fighting Pebble, and he has ties to the sport fishing association Trout Unlimited, which has joined the anti-Pebble campaign.

Funding to oppose Pebble also from outside Alaska

Funding to oppose Pebble is now also coming in from outside Alaska: the Gordon and Betty Moore Foundation in San Francisco has given grants to the Renewable Resources Coalition, Trout Unlimited and Washington, D.C.-based Earthworks, which will receive $800,000 over three years. The Gordon and Betty Moore Foundation has already been funding salmon conservation efforts in the Bristol Bay region for the past few years through The Conservation Fund, and that work brought Pebble to the foundation’s attention.

“Right now we can’t support the Pebble proposal — our greatest concerns are about potential water diversion and disruption to habitat,” the foundation’s program manager for its wild salmon ecosystems initiative, Aileen Lee, told Mining News. “The plans that are on the table just don’t make sense. We think that the region should be permanently protected. It’s the largest salmon-producing region in the world, so it’s a high priority for us.” The foundation will rely on groups like the Renewable Resources Coalition and Earthworks to determine how best to protect the Bristol Bay salmon, Lee said.

Rep. Jay Ramras, R-Fairbanks, opposes Pebble, and described it as an “ill-conceived project” because of its geographical location at an Alaska Miners Association meeting in Fairbanks last December. “Bob Gillam, who is very unique individual, has a mind to assert a public ballot initiative to tax the industry depending on the industry’s posture toward the Pebble mine,” Ramras told the AMA. “That is like an ultimatum and something that you might want to consider because it would put together pretty draconian measures that would be pretty punitive to the industry,” he added.

Ballot initiatives not guaranteed

In Alaska a ballot initiative calling for increased taxes on the cruise ship industry was successful last year, although another ballot initiative that would have introduced a reserves tax on natural gas was defeated. The oil and gas industry tends to get more support from the public in Alaska than the mining industry because profits from oil and gas indirectly increase the amount of the Permanent Fund Dividend, which is paid annually to everyone who has been a resident of the state for more than two years.

“The most significant ‘ballot initiative’ was the state election,” Northern Dynasty’s chief operating officer, Bruce Jenkins, told Mining News. “The Democratic candidate was anti-Pebble, the Republican, Sarah Palin, said wait and see.” Palin was elected governor last November. In the Bristol Bay region, Rep. Carl Moses — neutral on Pebble — lost his legislative seat on a coin toss after the primary election was tied. His challenger, Bryce Edgmon, who opposes Pebble, went on to win in the general election.

“It’s a mistake to jump to the conclusion that the anti-Pebble campaign reflects the majority, because it doesn’t,” Jenkins said. “I’m optimistic that the silent majority will become less silent. The company is doing everything that it’s in its rights to do, we’re complying with the law. We’re not going to not do our job just because we know somebody is going to disagree with us. If there is an anti-Pebble ballot initiative we have resources that we would contribute to make sure the facts are known.”

An eventual victory for Pebble’s opponents could be hugely expensive for the State of Alaska, according to a 10-page legal memo written by Legislative Counsel Donald Bullock Jr. in December in response to a request for an opinion from Rep. Paul Seaton, R-Homer. “Since the claims have already been filed, a reclassification of the land use could amount to a taking of the mineral rights that have been vested and a court could require the state to compensate the holder for those rights,” Bullock wrote. If the state were to make its permitting requirements so stringent that the developer could not economically proceed with the project, this might also be considered a taking that would require compensation.

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