Pebble Mine Owner Expects Billions in Public Funding, Bail-Out
Latest “Pebble Tapes” document Canadian mining company’s plans for $1.5 billion subsidy from Alaskans for infrastructure costs and, if project is stopped, expects claim against U.S. Treasury for $700-800 billion in compensation.
Latest “Pebble Tapes” document Canadian mining company’s plans for $1.5 billion subsidy from Alaskans for infrastructure costs and, if project is stopped, potential claims against U.S. Treasury for $700-800 billion in compensation.
In a release today of two new undercover “Pebble Tapes” by the DC-based non-profit Environmental Investigation Agency (“EIA”), the CEO of the Pebble Mine owner Northern Dynasty Minerals has been caught on video assuring would-be investors that the company expects “Alaska and other Alaskan entities” to cover the costs of infrastructure for the massive mining scheme. Northern Dynasty CEO Ron Thiessen estimates the public subsidy at about one-fourth of the mine’s estimated $5.5 billion cost—or $1.5 billion in funding from Alaskans.
Thiessen also predicts, in the event a federal permit for the mine is delayed or denied, a “takings” claim of “$700-800 billion or more” against the United States Treasury—that is, against U.S. taxpayers.
These disclosures are the latest from a series of now 14 videotapes of meetings held last summer by Pebble CEOs with EIA investigators posing as potential Chinese investors. In those meetings, Thiessen and Tom Collier, former CEO of the Pebble Partnership, were caught on tape bragging about their political influence, demeaning government officials, and revealing their actual plan for a massive 200-year mine ten times the size of the 20-year mine currently under permit review.
Two days after the tapes were released, Collier resigned, but Thiessen remains as chief executive—“the man behind the curtain”—for the embattled mining scheme.
The main focus of the latest tapes is Thiessen’s discussion of his plans for financing of the project, including for a massive subsidy in state funding. In contrast to the company’s frequent assertion that the Pebble Mine will provide an economic benefit to the State of Alaska, tape 14 makes clear that Alaska would be on the hook for billions in infrastructure costs (e.g., roads, pipelines, ports, energy facilities, etc.) simply to build the mine:
Thiessen — So the total CapEx on this in round numbers is going to be about $5.5 billion. We believe the State of Alaska and other entities in Alaska will fund most of the infrastructure for about $1.5 [billion] so the net is $4 billion, a combination of equity and bank financing. (Emphasis added.)
In the event the project is stopped, Thiessen—in tape 13—predicts an astronomical claim against the U.S. Treasury for up to a trillion dollars based on a claimed expropriation or “taking”:
Thiessen — “If [Biden] delays it too much, it becomes in effect a taking, an expropriation. And then there’s [a] statute dealing with expropriation…. And if it’s determined to be a taking by the courts, we expect compensation. The State of Alaska said ‘we want one trillion dollars for Pebble’ because the state owns the mineral rights. . . . [T]he [Department of Justice] said ‘If it turns out you do not have the statutory authority this is a taking. The cost to the Federal Treasury will be $700-800 billion at least.’ (Emphasis added.)
Although the anticipated legal basis is unclear, Northern Dynasty has previously threatened precisely such a claim in January 2016 under the North Atlantic Free Trade Agreement (“NAFTA”). In a January 11, 2016 letter to the Legal Advisor of the Department of State, Northern Dynasty gave notice that it was prepared to file a claim for compensation based on its assertion that the U.S. Environmental Protection Agency had acted in a “grossly abusive, arbitrary, and deliberately opaque manner,” in breach of due process, U.S. statute, and “Northern Dynasty’s legitimate expectations.”
The focus of Northern Dynasty’s letter was EPA’s review of the Pebble Mine under section 404(c) of the federal Clean Water Act. But as NRDC responded in an extensive legal analysis, the company’s threatened claim had no basis. And, in fact, the threat went nowhere.
What the latest “Pebble Tapes” make crystal clear is that, despite repeated public assurances from Northern Dynasty and Ron Thiessen of Pebble’s financial benefit to Alaskans, their long-opposed mining scheme will, from day one, be an economic burden on the state’s taxpayers—not a revenue generator. And should permitting be delayed or denied—and the project never gets to day one—Northern Dynasty is already planning a “stick-up” of U.S. taxpayers for an astronomical windfall.
Enough is enough. The last thing Northern Dynasty deserves is a federal permit for the Pebble Mine. The people of the region don’t want it. The mining industry has abandoned it. The science doesn’t support it. And Ron Thiessen can’t be trusted with the future of Bristol Bay.
It’s time to stop the Pebble Mine once and for all.