« Back to Home Page

Sign up for the 3p daily dispatch:

Rio Tinto Pulls Out Of Pebble Mine, Gifts Shares to Nonprofits

| Monday April 14th, 2014 | 0 Comments

copperDealing another major setback to Northern Dynasty Minerals’ plans to develop the world’s largest known undeveloped copper ore deposit, multinational mining giant Rio Tinto, the project’s sole remaining major mining company backer, announced it is divesting its 19.1 percent equity stake in the junior Canadian mining company.

Rio Tinto is taking an extraordinary step in the way of divestment: Rather than trying to find a buyer for its Northern Dynasty shares, management announced it is gifting them to two local nonprofit organizations, dividing them equally between the Alaska Community Foundation and the Bristol Bay Native Corp. Education Foundation.

Situated on state land in southwest Alaska at the headwaters of the Bristol Bay watershed, Northern Dynasty aims to build North America’s largest open-pit copper mine at the Pebble Mine site. The Bristol Bay area is also home to one of the world’s richest remaining wild salmon habitat and Alaska’s richest fisheries, however.

IHS Global Insight projects the extraction and processing of copper, gold and molybdenum ore from the Pebble Mine site will create 15,000 jobs and provide a more than $2.5-billion boost to U.S. GDP over at least a 20-year period. Set on the scales against the project is the the value of the Bristol Bay fishery and watershed, which opponents contend would be threatened and significantly degraded, if not destroyed, were the Pebble Mine project to be developed — taking local communities and ways of life along with it.

A series of setbacks for Northern Dynasty Minerals

Rio Tinto’s divestment is the latest in a string of setbacks for the Pebble Mine project and Northern Dynasty. Having acquired mineral rights in 2001, Northern Dynasty six years later sealed a 50-50 partnership with another multinational mining giant, Anglo American, to develop Pebble Mine. Anglo American, having invested more than $500 million in the project, announced last September it was withdrawing from the project, however, casting serious doubt about Northern Dynasty’s ability to continue developing it.

Click to explore on EPA.gov.

Click to explore on EPA.gov.

With opposition from local communities, environmental groups and the broader public coalescing and intensifying, the EPA at the end of February dealt the project a second serious blow when it invoked Section 404(c) of the Clean Water Act and put a halt to further development activity in order “to identify appropriate options to protect the world’s largest sockeye salmon fishery in Bristol Bay, Alaska from the potentially destructive impacts of the proposed Pebble Mine.”

Northern Dynasty president and CEO Ron Thiessen cried foul, asserting that the environmental review process has been politicized, with the EPA cozying up to environmental and other opposition groups.

In a Feb. 28 press release, Northern Dynasty announced that it had called on the EPA Inspector General (IG) to launch an investigation into the Bristol Bay Assessment, a critical element of the environmental review process produced by the EPA and private contractors. As Thiessen elaborated:

“Based on Freedom of Information Act (FOIA) requests undertaken by the Pebble Partnership, the State of Alaska and others, Northern Dynasty’s submission to the EPA IG raises serious issues of bias, political motivation and collusion with environmental NGOs in the federal agency’s preparation of the Bristol Bay Assessment.”

Despite the EPA’s action, Northern Dynasty remained firm in its belief that the Pebble Mine project will ultimately pass and receive the required federal environmental approvals to carry on with development. Thiessen stated:

“The U.S. and Alaska have among the most stringent environmental laws for the protection of fish and water in the world, and the Environmental Impact Statement (EIS) process under NEPA (National Environmental Policy Act) is the gold standard for ensuring that major project developments receive comprehensive, transparent and science-based assessment.

“Given that, along with the global significance of the Pebble deposit and the inherent, well-documented limitations of the Bristol Bay Assessment study, including those acknowledged by EPA itself, we continue to have every confidence that final decisions about Pebble will be made in the future following a comprehensive NEPA/EIS permitting process.”

Of copper, gold, fisheries and watersheds

Salmon fisherman, Bristol Bay, Alaska, USA
Having invested more than $160 million of investors’ capital in the project, the Vancouver and New York Stock Exchange-listed company maintains its belief that the Pebble project will be developed despite Rio Tinto’s divestment. In an April 7 press release, Thiessen expresses pleasure in Rio Tinto’s decision to gift its equity stake in the company to the Alaska Community Foundation and the Bristol Bay Native Corp. Education Foundation.

“Both organizations are known to the Company and the Pebble Limited Partnership (“Pebble Partnership” or “PLP”); the Alaska Community Foundation, in particular, helped facilitate PLP’s five-year, $5 million investment in Bristol Bay communities via the Pebble Fund,” Northern Dynasty states.

Added Thiessen:

“We are pleased that Rio Tinto’s interest in Northern Dynasty will provide meaningful, long-term economic contributions to charitable organizations in Alaska that are dedicated to providing educational opportunities for young people, and to preserving culture and traditional ways of life.

“We look forward to meeting with the leadership of the Alaska Community Foundation and Bristol Bay Native Corp. Education Foundation in the days ahead to better understand their long-term goals and aspirations, and how their ownership interest in Northern Dynasty and the Pebble Project can make the greatest possible contribution to the people and communities they serve.”

Pebble Mine opponents, including the Natural Resources Defense Council (NRDC), are also pleased with Rio Tinto’s divestment. As NRDC’s Joel Reynolds states in a blog post:

“Rio Tinto’s announcement today is outstanding news for Bristol Bay – a vindication of the company’s expressed commitment to sustainability in the region and the health, safety, and cultural heritage of the people of Bristol Bay — and it is the right move for Rio Tinto’s own shareholders.

“NRDC and its 1.4 million members and activists applaud Rio Tinto’s responsible action, and once again we urge EPA to use its authority under the Clean Water Act to act swiftly to stop this uniquely reckless project for good.”

Whether or not the Pebble Mine project proceeds or not lies in the hands of regulatory authorities, Northern Dynasty management, environmental and social justice groups, and local residents and communities.

The story of the Pebble Mine project shines a light on the profound and long-term environmental and social, as well as economic, impacts and trade-offs inherent in decisions to extract, process and refine any natural resource — mineral and energy resources in particular.

They also highlight the critical importance of having a robust and unbiased regulatory and institutional framework in place. Such decisions should compel all stakeholders to rise above consideration of their own narrow self-interests.

However events unfold, whether or not the Pebble Mine is developed or not will make a statement about the relative values Americans as a society place on economic and natural resource development; the interests of corporations, local residents and communities; and the value of ecosystems and biodiversity.

Copper coin credit PeriodicTable.com

Map credit: EPA, Pebble Mine Bristol Bay Assessment

Bristol Bay fishing boat credit Alaska Conservation Foundation


▼▼▼      0 Comments     ▼▼▼

Newsletter Signup