Letter to First Quantum Minerals' CEO on the Pebble Mine
NRDC urges new potential Pebble partner to dissociate from toxic project
Philip K. R. Pascall, Chairman and Chief Executive Officer
First Quantum Minerals Ltd.
14th Floor – 543 Granville Street
Canada V6C 1X8
Dear Mr. Pascall:
We enjoyed a substantive but cordial conversation on Sunday afternoon near LAX with your colleague Angus Kennedy-Perkins, Group Manager, Commercial Projects, and we agreed going forward to stay in touch. But we were disappointed to learn that you’ll be unable to meet with us before you make a recommendation to the First Quantum board in the coming weeks on an option agreement for partnership in the Pebble Mine.
In the absence of direct access, I write with some perspective that we hope you will consider as you approach that decision.
First, we heard on Sunday that First Quantum is a company undaunted by projects that, due to embattled and protracted permitting, engineering challenges, remote location, or legal risk, other companies avoid. The Pebble Mine is all of those, and it will unquestionably provide the “acid test” of your capacity for corporate risk of all kinds.
Second, we were told that the main impediment at this point to an option agreement is the structure of First Quantum’s relationship with Pebble’s 100% owner Northern Dynasty Minerals, a company with a history of disintegrating partnerships that is second to none. For all its bullish predictions about the mountains of cash to be made by investors in Pebble, Northern Dynasty has been unable to persuade even one of the three original major mining companies that, since 2011, have walked away.
And it’s no secret that for years Northern Dynasty has itself been aggressively looking to sell. In an interview just last December, Northern Dynasty’s CEO again predicted that “somebody will come along and take us over . . . when a Draft EIS is published.” Obviously, hope (and its evil twin “desperation”) spring eternal for Northern Dynasty and its beleaguered shareholders, but there’s no denying that this company has been a magnet for imprudent investment.
Third, in this regard, it’s worth noting your potential partner’s penchant for less than credible representations about what is truly planned at Pebble, speaking one day to the public about the reduced scale of the project and to investors the next about the wealth to be extracted through full-scale development. The project’s representatives seem willing to give virtually any assurance to sell it, with Tom Collier even recently endorsing on national television the absurd proposition that “you are going to be able to put a clean mine up there that’s going to have no effect.” The people of Bristol Bay know better, and we feel certain First Quantum does too.
Fourth, we were surprised to hear on Sunday about the apparent readiness of First Quantum to vouch for the technical feasibility of the project and its economics. We urge you to review Northern Dynasty’s latest technical report (February 23, 2018), which states that “the potential economic viability of the Pebble Project is not currently supported by a preliminary economic assessment, pre-feasibility study or feasibility study.” In other words, none of the basic technical and economic documentation typically needed to support a mining project of any significance exists. While First Quantum may be fine rolling the dice with its shareholders’ money, the people of Bristol Bay are not.
And this brings us to the heart of the matter:
We were told that opposition to the project, while generally understood by First Quantum to be strong, persistent, and well-funded, has been given little attention thus far pending the U.S. Army Corps of Engineers permitting process. And we were further told that the fundamental objection of project opponents across the board―that it is unacceptable to build a massive open pit copper and gold mine in the headwaters of the world’s most productive wild salmon ecosystem―is “a question for the CEO.”
On both counts, this omission of meaningful due diligence is a serious mistake.
There is no mining project anywhere in the world that has generated the consensus of Pebble’s condemnation. At regional, state, national, and international levels, the opposition is unprecedented, and there is nothing in an Army Corps permit (one of over 60,000 issued by the agency each year) that will allay the underlying concerns. Thus far in excess of three million public comments have been submitted in opposition to Pebble, including 1.1 million just last Fall, and the numbers are certain to grow.
Extensive scientific peer review of EPA’s comprehensive Bristol Bay Watershed Assessment has confirmed the finding that the watershed and its resources would be irreparably harmed―even if (hypothetically) the mine were to operate flawlessly. It confirmed, too, that if there is a breach―from many foreseeable causes, releasing contaminants through a range of exposure pathways in this seismically active and hydrologically complex region―the consequences could be “catastrophic.” While First Quantum may dismiss this multi-year scientific process, the people of Bristol Bay will not.
The unacceptable location of this massive project―whether permitted in twenty-year phases as currently proposed or all at once―is the issue that has most animated the breadth and intensity of Pebble’s opposition, and, as Mitsubishi, Anglo American, and Rio Tinto discovered, it is the issue on which economic and technical feasibility ultimately depends. As Pebble goes, so goes the watershed, with an essentially eternal supply of food pitted against a contaminated mining district. And the people of Bristol Bay have inalterably chosen the food.
Pebble is the wrong mine in the wrong place―not just in the minds of local leaders, but in the consensus of EPA Administrators from every Republican Administration (but Ford) since EPA was created―Nixon, Reagan, George H.W. Bush, and George W. Bush. According to Tiffany and Co., whose “No Pebble Pledge” has been joined by over 60 jewelers around the world, the question is “whether there are certain places where mining simply should never occur,” and its answer is “Alaska’s Bristol Bay is one such place.”
First Quantum ignores this history at its financial and reputational peril. If you proceed in disregard of the unavoidable risk to the greatest wild salmon fishery on Earth and the people and wildlife that depend on it―if you choose to become the financial angel of the uniquely reckless Pebble Mine―you do so with the knowledge that NRDC and the coalition of Alaska stakeholders that we support are committed to continue, for as long as necessary, doing whatever we can to ensure that Pebble is stopped, Bristol Bay is protected, and the watershed that feeds it doesn’t fall victim to the uncaring avarice of Northern Dynasty, First Quantum, and their shareholders.
We urge First Quantum to make the right choice by dissociating itself from this toxic project. We ask you to respect the overwhelming opposition unequivocally expressed over many years by the people of Bristol Bay, bearing in mind that, long after Northern Dynasty Minerals and First Quantum have left the scene, they are the ones who will have to live with the consequences of your actions.
We request, once again, the opportunity to meet with you personally as soon as possible at whatever time and place your schedule allows.