First Quantum Minerals Invests in Controversial Pebble Mine
Proposed Mine Threatens World’s Biggest Salmon Fishery and is Opposed by Overwhelming Majority of Alaskans
First Quantum Minerals today announced an option to potentially acquire half of the highly controversial Pebble Mine project—a colossal gold and copper mine proposed at the headwaters of Bristol Bay, Alaska. First Quantum will pay $150 million over four years to help fund the permitting process for the project, which threatens the world’s largest wild salmon fishery.
More than 80 percent of the people from Bristol Bay — and 65 percent of Alaskans — oppose the proposed Pebble Mine. And the opposition is increasing. Bipartisan opposition to the project includes leaders from business, government, communities and tribes. Bristol Bay leaders have repeatedly said that they “will never support a Pebble mine in Bristol Bay.” Former EPA Administrators from the Nixon, Reagan, and both Bush Administrations last week joined the opposition.
After a year of big promises and missed deadlines, Northern Dynasty needed a big win. But the ‘framework agreement’ with First Quantum Minerals announced today isn’t that win. It’s a bunt instead of a homerun. And it’s yet another reminder—after Mitsubishi, Anglo American, and Rio Tinto all walked away from the project—that Northern Dynasty Minerals isn’t ready for the big leagues.
It’s important to note what wasn’t announced today: No immediate partnership. And no big investment … just enough money to start the permitting process.
First Quantum Minerals has years to conduct their due diligence and discover what the people of Bristol Bay have known all along: Pebble Mine will always be the wrong mine in the wrong place. It will never receive stakeholder support.
That’s because, if fully developed, Pebble will generate up to 10 billion tons of mining waste that will need to be stored forever in an active earthquake zone, threatening the almost 60 million (!) salmon that returned this year and the Alaska Native culture and subsistence-based economy, $1.5 billion annual commercial fishing economy, 14,000 jobs, and abundance of wildlife that the salmon support.
It’s a bad investment.
So bad that three of the world’s largest mining companies—Mitsubishi, Anglo American, and Rio Tinto—have already walked away from the project, even after investing hundreds of millions of dollars.
Mitsubishi sold its interest in 2011. Anglo American withdrew in 2013, after spending more than $540 million dollars to develop the mine and writing down $300 million in additional losses to withdraw, citing a desire to focus on projects with the “highest value and lowest risks.” Rio Tinto walked away in 2014, donating all its shares to two Alaskan charitable foundations.
Why? The reasons are likely numerous, but here are three that come to mind:
1.The Pebble Mine is a political loser.
Alaska is known as a pro-development state, but the strong majority of Alaskans oppose the Pebble Mine. More than 65 percent of Alaskans, 80 percent of Bristol Bay residents and Native communities, and 85 percent of commercial fishermen oppose the mine. (The world opposes the mine too. Last year, the IUCN World Conservation Congress virtually unanimously adopted a motion opposing the Pebble Mine.)
Alaska Governor Bill Walker, an independent, is on record against the mine: “Based on the information available to me now, I do not support the Pebble Mine.” Governor Walker also said that constructing the mine “presents formidable challenges” given the valuable fishery and the rural village life that depends on it.
In addition, the "Bristol Bay Forever" initiative, passed by Alaska voters in 2014, also has the potential to derail the project. The initiative protects the Bristol Bay watershed from large-scale sulfide mining (like the proposed Pebble Mine) that would harm wild salmon by requiring an affirmative finding from the Alaska legislature that mining would not be harmful to wild salmon within the Bristol Bay Fisheries Reserve.
2.The Pebble Mine is an economic loser.
According to a report issued earlier this year by independent New York-based investment firm Kerrisdale Capital Management, the Pebble Mine is “not commercially viable.”
Though very large, the Pebble deposit is relatively low-grade, meaning that large amounts of raw material would need to be processed to extract small amounts of valuable substances like copper, gold, and molybdenum. But this processing requires a great deal of infrastructure, and the pristine Bristol Bay region where Pebble is located has almost none. Mining Pebble would thus entail building a large power plant, a deep-water harbor, an 86-mile-long road, an equally long set of pipelines for moving copper concentrate, multiple dams that would rank among the largest on the planet, potentially a floating liquefied natural gas platform, and more – all in a harsh natural environment subject to extremes of temperature and precipitation, not to mention earthquakes…from an investment perspective it’s obviously risky.
Pebble mine is currently promising its investors the financial rewards of a big deposit, while at the same time promising to build a smaller mine. Because of the low-grade nature of the deposit, it will require both a lot of mining and infrastructure to make viable which is incompatible with the promise for a smaller mine.
3.The Pebble Mine is an environmental loser.
Under the leadership of the Obama administration, EPA conducted a scientific assessment of the Bristol Bay watershed to understand impacts from large-scale mining like the proposed Pebble Mine on Bristol Bay fisheries—and the consequent effects on wildlife and Alaska Native cultures in the region. EPA’s Bristol Bay Watershed Assessment—which was subject to extensive public comment and two rounds of expert peer review—concluded that the Pebble Mine would have "significant" impacts on fish populations and streams surrounding the mine site, and that a tailings dam failure would have "catastrophic" effects on the region. EPA underscored that even with no human or system failure (impossible in the long-term), a mine of any foreseeable size would reduce water flow in the region, directly eliminating between 1,300 to 5,350 acres of wetlands and destroying between 24 and 94 miles of salmon-supporting streams.
Notably, EPA evaluated three different sized mines, one smaller than the “small” mine plan Pebble is currently touting. And the agency still found significant environmental impacts, including the destruction of 24 miles of salmon streams and 1,300 acres of wetlands.
In addition to the political, economic and environmental risks associated with the Pebble Mine, there is also the very real reputational risk. Given the overwhelming local, state, national and international opposition to the mine, eminent jewelers like Tiffany & Co., Helzberg Diamonds, Zale, and Jostens have expressed their solidarity and vowed not to use gold extracted from it.
By investing in the Pebble Mine, First Quantum Minerals just invested in an ugly project overwhelmingly opposed by the people, tribes and communities of Bristol Bay.
“Thanks but no thanks,” wrote tribal, economic, and political leaders of Bristol Bay in an op-ed published this summer in Alaska. “Bristol Bay has thought this over for a long time, and we have long since made up our minds: Pebble mine is not welcome here. The discussion is over.”
“The Pebble Mine is, and always will be, the wrong mine in the wrong place,” wrote the chairman of the board of Bristol Bay’s Native Corporation— a multi-billion dollar developer and the largest land-owner in the Bristol Bay region representing over 10,000 native shareholders—in an anti-Pebble op-ed published in connection with Northern Dynasty Minerals shareholder meeting.
It’s clear that the Pebble Mine will never achieve the social license necessary to build its mine in Bristol Bay.
Stakeholder support is important. It matters to the people of Bristol Bay. It matters to NRDC. And it matters to anyone who values the ecological and economic health of America over the profits of foreign mining companies.
This is a fight we can and must win. We fought Mitsubishi, Anglo American and Rio Tinto until all three companies withdrew from the project. We will fight First Quantum Minerals—from the boardroom to the courtroom—until it does the same.
Please join the fight! If you have a vision for America that puts the nation’s natural beauty first instead of last, act now. If your vision for a healthy future means putting the world’s largest wild salmon fishery before the profits of foreign mining companies, act now.
Click here to stop the Pebble Mine, protect Bristol Bay, and defend America’s environment and future.