Mining Giant Rio Tinto Buys Into Alaska’s "Pebble" Project
Kennecott, through its parent company Rio Tinto, has purchased Galahad Gold Ltd.’s 19.8% share in Northern Dynasty Minerals Ltd Pebble copper-gold-molybdenum prospect, making it the largest single individual shareholder.[1] In February 2007, Northern Dynasty Minerals announced it would receive the Thayer Lindsley International Discovery Award from the Prospector’s and Developer’s Association of Canada for discovering the 32 square mile Pebble East deposit.[2]
Claiming Pebble East to be the world’s largest, un-mined mineral deposit, Northern Dynasty has estimated the deposit to contain 67 billion pounds of copper, 82 million ounces of gold, and at least 2.9 billion pounds of molybdenum, amounting to roughly $200 billion on the current metals market.[3] The State of Alaska currently imposes a tax of less than 1.5% on mineral royalties.[4]
Opposition groups have suggested modifying the mineral tax as a method in waylaying the project.[5] The opposition Renewable Resources Coalition (RRC), initiated by McKinley Capital Management President Robert Gillam was able to receive public support from U.S. Senator Ted Stevens.[6] RRC’s members include the United Fishermen of Alaska, a trade group representing 34 commercial fishing groups.
Stevens, normally an industry sure-bet, opposes the project due to potential impacts on Bristol Bay’s fishing industry. Bristols Bay’s commercial operations $320 million and employees roughly 12,500 people. Also, sports fishermen spent $120 million in the area.[7] Regarding another Rio Tinto venture, Stevens has said that he feels he was misled for years by BP over its safety and maintenance regime in Alaska.[8]
The open-pit Pebble project has caused concern because the metals are contained within a high-sulfide ore body. Due to the project’s incredible size there is enormous potential for it to ruin the headwaters that supply Bristol Bay’s salmon fisheries. The Kvichak River has the world’s largest sockeye run and the Nushagak River one of the largest king salmon runs.[9] Bristol Bay’s rivers, as well as Michigan’s Salmon-Trout River has been named on the 2006 list of America’s Most Endangered Rivers.[10]
An industry publication, Mine Web, has noted that “as Rio Tinto and Kennecott have demonstrated in the past, they definitely have patience and professional and financial resources to wait, negotiate, develop, and mitigate the impacts of even the most controversial mining project.”[11]
1 AP, “Rio Tinto Increases Share in Pebble Project Company,” January 30, 2007
3 Bluemink, Elizabeth, “Pebble Prospect Ranks 2nd Worldwide,” Anchorage Daily News, February 21, 2007
4 Kosich, Dorothy, “Kennecott, Rio Tinto Prepare for Pebble Permit Fight,” Mineweb.com, June 30, 2006
6 Supra, 4
8 Shah, Saeed, “Engineers Warned BP of Alaskan Crisis Two Years Ago,” London Independent, August 25, 2006
9 Bluemink, Elizabeth, “Pebble Mine Prospects Appear Larger Still, Northern Dynasty: The company says there is more high-grade copper,” Anchorage Daily News, January 25, 2007
10 American Rivers.org, “Bristol Bay Among America’s “Most Endangered’,” April 19, 2006
11 Supra, 4
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