Pebble Mine Benefits?? Fool’s Gold, Red Herrings, Failure

Canadian owner of embattled Bristol Bay mine releases self-serving economic contribution report that confirms plan for vast increases in mine size, mine costs, and mine impacts, fails to mention risks to Bristol Bay’s $2.2 billion wild salmon fishery.

School of Salmon in Southwest Alaska

School of Salmon in Southwest Alaska

Credit: Russ Taylor/NPS

Northern Dynasty Minerals—100 percent owner of the widely condemned Pebble Mine—has long argued that its proposed massive open pit mine at the headwaters of Alaska’s Bristol Bay would enhance” rather than threaten the world-renowned wild salmon fishery that those pristine waters sustain. While three successive federal Administrations have disagreed—Obama, Trump, and now Biden—the small, underfunded Canadian company has no other assets and nowhere else to go with its shareholders’ investment. 

And so, despite denial of a federal permit by the notoriously development-friendly Trump Administration in November 2020, the battle for Bristol Bay goes on.

Last month, in its latest attempt to turn the tide of opposition, Northern Dynasty released its latest red herring: “An Economic Contribution Assessment of the Proposed Pebble Project to the US National and State Economies,” a thin, 33-page report prepared by consultant IHS Markit purporting to document the positive impact of the Pebble Mine on the economies of Alaska and the lower 48 states.

To put it mildly, it’s an insubstantial piece of work, with some glaringly transparent flaws, apparent even to the lay reader. The most obvious is that the assessment is not the “independent expert analysis” that Northern Dynasty has claimed; indeed, as IHS Markit concedes in the Executive Summary, the consultant “utilized preliminary planning information provided by [Northern Dynasty] as key inputs for the models that assess the potential long-term economic contributions of the Pebble Project.” It’s always been—and it remains—sensible to be skeptical of the company’s self-interested inputs, including most recently its deeply flawed 2021 Preliminary Economic Assessment, relied upon and repeatedly cited by IHS Markit. Further, almost no supporting documentation is provided to support or justify the wildly optimistic economic and employment benefits claimed

Perhaps most remarkable, the assessment fails to mention, much less to credit and incorporate into its estimate of the mine’s economic impact, the substantial risk that this exceptionally destructive project poses to the health and integrity of the existing $2.2 billion a year Bristol Bay fishery, which generates an estimated 15,000 jobs annually. Whether Northern Dynasty directed IHS Markit to ignore the project’s threat to Earth’s most productive wild salmon fishery economy or the consultant simply failed to consider it relevant, the significant point is that IHS Markit omitted from its analysis the central issue of economic, environmental, social, and cultural concern that has motivated opposition to this project for decades in Alaska and elsewhere.

And there is more. 

Earlier this month, mining expert and former Head of Environment for Rio Tinto Copper, Copper & Diamonds, and Copper & Coal Group Richard K. Borden independently reviewed Northern Dynasty’s consultant report and noted important conclusions that can be drawn from the report, even without public access to the models, the underlying inputs, or the supporting documentation. These include, for example:

  • an admission by Northern Dynasty of the significantly increased estimated capital cost of the mine (from $6.05 billion to $10 billion),
  • a significant shortening of the time period before major expansion of the mine plan currently sought by Northern Dynasty for permitting (from 20 years to as little as three years from initial operation of the mine), and
  • an exponential increase in chemically reactive tailings and waste rock production, which would increase the impacts and risks associated with direct land disturbance, contaminated water management, geotechnical stability, and closure.

As summarized by Borden:

  • The report states that the capital costs required to construct a full-scale, long-life mine at the Pebble deposit would be ten billion dollars. This is the first time a document written or commissioned by [Northern Dynasty] has publicly and explicitly stated that the capital cost for full-scale, long-life development of the ore body would be so large.
  • Construction for the mine expansion is proposed to begin as early as three years after operation of the [permit application] starter mine commences. 
  • The much larger mine plans required to pay for the large initial capital investment would increase chemically reactive tailings and waste rock production by more than ten-times compared to the almost certainly uneconomic starter mine analyzed in the Environmental Impact Statement (EIS) and the subsequent Pebble Project Preliminary Economic Assessment (PEA).
  • Even if the expanded mining operation was only run for 20 years, the mass of chemically reactive tailing and waste rock production would more than double according to the assumptions made in the Economic Contribution Assessment.
  • The assessment fails to acknowledge the threat posed to the Bristol Bay wild salmon fishery’s 14,000 jobs and long-term economic benefits by any mine development in the heart of the watershed.
  • The assessment fails to acknowledge opportunity costs associated with development of the Pebble ore body. Ten billion dollars could be invested in other less financially and environmentally risky mine development projects in the United States that could provide the copper needed by the nation’s economy.

Borden’s review is linked in full here.

In considering the balance of costs and benefits of the Pebble Mine, the immutable truth is and long has been that the Bristol Bay watershed is one of the most productive ecosystems on Earth—generating 50 percent of the world’s sockeye salmon every year.  According to Alaska’s Department of Fish and Game, the predicted run next summer is a spectacular record 73.4 million fish, eclipsing the run of 66 million just last summer. 

These wild salmon are the most valuable gold in the Bristol Bay region—the red gold that for centuries has sustained the people of Bristol Bay, their communities, and their wildlife. There is simply no good reason to risk this national treasure in the hope of speculative economic contributions from a massive, destructive open pit mine at the headwaters of so successful an economic and natural eco-system. 

Northern Dynasty’s latest attempt to resuscitate its widely condemned project through a flawed and self-serving economic assessment is another red herring in pursuit of fool’s gold—a scheme that, as the Army Corps found in rejecting the company’s permit application, “does not comply with Clean Water Act guidelines,” will “significantly degrade” the region’s aquatic resources and “is contrary to the public interest.”

We couldn’t agree more, and we strongly support EPA action for lasting protection of the region. The Pebble Mine is a failure. Take action now to stop it forever.


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