Pebble Mine

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This article or section contains information about a planned or proposed future mine. It may contain speculative information; the content may change as the construction or completion of the mine approaches.

Pebble prospect
Pebble prospect Location of the Pebble prospect in Alaska
Coordinates: 59°53′50″N 155°17′43″W / 59.89722, -155.29528
Country	United States
State	Alaska
Borough	Lake and Peninsula
Time zone	Alaska (AKST) (UTC-9)
- Summer (DST)	AKDT (UTC-8)
Area code(s)	907

Pebble Mine is the street name of an advanced mineral exploration project investigating large copper, gold, and molybdenum deposits in the Bristol Bay region of Southwest Alaska, near Lake Iliamna and Lake Clark. The proposal to build a large mine exploiting these deposits is controversial.

Contents 1 Proposal 2 Location and land status 3 Discovery and exploration history 4 Current company ownership and management 5 Geology 6 Reserves and resources 7 Permitting 8 Salmon resources in the area 9 Controversy 9.1 Arguments against the proposal 9.1.1 Environmental 9.1.2 Economic 9.2 Arguments for the proposal 9.2.1 Environmental 9.2.2 Economic 10 Ongoing political actions affecting the proposal 10.1 Fish refuge 10.2 Alaska Clean Water Initiative 11 External links 11.1 Government links 11.2 Pebble Opposition 11.3 Pebble proponents 11.4 News 12 References

[edit] Proposal

The exact nature and scope of proposed mining activities at Pebble are yet to be finalized. Planning and exploration is currently focused on two contiguous deposits, Pebble West and Pebble East. There are other significant mineral occurrences and deposits in the project area, but they are little-explored, to date. Northern Dynasty expects in 2009 to make a decision on whether to apply for permits to build a mine at Pebble, and to make a final construction decision in 2011.^[1][2]

Pebble West would probably be mined from an open pit. The geology and mining characteristics of Pebble West are well understood. The pit would be up to two miles (3 km) wide and several thousand feet deep and may generate up to 2.5 billion tons of waste material^[3]. Two artificial lakes would be created in order to store the discharge chemicals and waste. The largest of the dams enclosing these lakes would 740 feet (230 m) tall and 4.3 miles (6.9 km) long.

Pebble East would most likely be mined by underground methods.

Feasibility studies (semi-detailed mine construction and operation plans) and applications for permits by Pebble Mines Corp. are being deferred until the Pebble East deposit is fully delineated. ^[4]

One possible design entails a road roughly 95 miles (153 km) long built along the north side of Lake Iliamna to a port on Iniskin Bay on Cook Inlet. Power to operate the mine would come from a submarine cable stretching across Cook Inlet^[5].

Northern Dynasty estimates that Pebble West contains over $100 billion worth of metals at 2006 prices^[6]. If Pebble East is included the estimate increases to over $300 billion dollars.^[3]

[edit] Location and land status

The Pebble Prospect is located 200 miles southwest of Anchorage, north of Lake Iliamna, near the villages of Nondalton and Iliamna, in a remote and roadless area. It sits at the headwaters of Upper Talarik Creek and the Koktuli River. Upper Talarik Creek flows into Lake Iliamna, and then into Bristol Bay through the Kvichak River. The Koktuli River flows into the Mulchatna River, which joins the Nushagak River, and then flows into Bristol Bay.

The Pebble mineral deposits are on land owned by the state of Alaska. Pebble Mines Corp. holds mineral rights on 153 square miles of state mining claims, an area which includes the Pebble deposits, as well as other, less explored, mineral deposits. ^[7].

The Pebble West/East deposits are centered on 59.8971N, 155.2952W (59^o 53' 50"N 155^o 17' 43"W).

[edit] Discovery and exploration history

Cominco Alaska Exploration (CAE) began investigations in the area in 1986. Early work focused on color anomalies visible from aircraft. Discovery of the Pebble West (originally named Pebble Beach) deposit occurred during the first drilling campaign in 1988. CAE continued drilling and other work through 1992, resulting in a calculated resource of 3 million tonnes of copper metal and 11 million ounces of gold contained in 1000 million tonnes of ore. After 1992 little further work was done on the project for nearly a decade.^[8]

In 2001 Northern Dynasty Minerals optioned the property from Teck Cominco (the successor company to the parent company of CAE) and began in 2002 an extensive exploration program that is still in progress. By 2004 Northern Dynasty had expanded the known resources at Pebble West to include 4100 million tonnes of ore. In 2004 engineering, environmental, and socio-economic studies aimed at designing a mine commenced. In 2005 Northern Dynasty discovered the Pebble East deposit. Also that year, Northern Dynasty acquired 100% ownership of the Pebble mining claims.^{[9] [10]}

By the end of 2007, Northern Dynasty expects to have invested about $225 million in the project, with about $85 million of that in environmental and socio-economic studies.^[11]

In 2007, Northern Dynasty anticipated completing a prefeasability study in late 2008, a feasability study in 2011, and commencing production in 2015.^[12]

In early 2008, exploration of the Pebble East deposit continues, with $140 million budgeted for project expenditures in 2008^[13]. The limits of the deposit have not yet been found.

[edit] Current company ownership and management

In July of 2007 Northern Dynasty Minerals announced a partnership with London based Anglo American in the Pebble Mine project. The new Pebble Limited Partnership is 50% owned by a wholly-owned U.S.-based subsidiary of Anglo American and 50% owned by The Northern Dynasty Partnership, which is a wholly-owned Canadian-based subsidiary of Northern Dynasty Minerals Limited.^[14] The partnership agreement obligates Anglo American to spend $1.425 billion towards study, permitting, and construction of the project in order to retain it's 50% interest.^[15] The partnership is managed by the Pebble Mines Corporation, a 50% Northern Dynasty:50% Anglo American owned corporation based in Alaska. Important stockholders in Northern Dynasty Minerals Limited include Kennecott (19.8%) which is a wholly-owned affiliate of Rio Tinto, management (13%), and Mitsubishi (9.1%). One non-executive member of the Northern Dynasty board is a Rio Tinto representative. The corporate officers and executive board members of Northern Dynasty Minerals Limited are all, also, executive board members and corporate officers of Hunter Dickerson Corporation. Northern Dynasty is one of ten public mining companies driven by Hunter Dickerson, a Vancouver-based Canadian corporation.^[16]

[edit] Geology

Pebble Copper is a calc-alkali porphyry copper-gold-molybdenum deposit hosted in deformed sedimentary rocks of the Jurrasic to Creataceous age Kahiltna flysch terrane intruded by diorite and porphyritic granodiorite to tonalite of Upper Cretaceous age. Porphyry phases occur as dykes, sills, and irregular bodies.^[17]

Metallic minerals identified at Pebble Copper include pyrite, chalcopyrite, and molybdenite, along with minor bornite, covellite, chalcocite, digenite, and magnetite.

The western part of the deposit (Pebble West) is exposed at the surface; thin gossans are developed and oxidation reaches 100 feet in depth. The eastern part of the deposit (Pebble East) is eroded and has been covered by a thickening-to-the-east wedge of post-mineralization-age Tertiary sedimentary and volcano-sedimentary rocks.^[18]

The Lake Clark fault probably lies within twenty miles of the Pebble deposits, and possibly much closer; it is a major right-lateral strike-slip crustal feature that is considered to be a westward continuation of the Castle Mt. fault. No ground mapping in the Pebble area has identified the trace of the Lake Clark fault.^[19][20]. Recent studies indicate that a magnitude 7.1 quake can be expected to occur on the Castle Mt. fault on a 700-year cycle.^[21] The Lake Clark fault is sub-parallel to and considered to be similar to the Denali fault, which lies several hundred miles to the north. A magnitude 7.9 quake struck the Denali fault in 2002. The subduction zone of the Aleutian Trench lies approximately 125 miles south of Pebble. This zone was the source of the 1964 Good Friday earthquake of magnitude 9.2.^[22]

[edit] Reserves and resources

Latest estimates (February 2008) indicate that Pebble West contains (at a copper-equivalent cut-off of 0.30%): Measured and Indicated resources of; 18.8 billion pounds of copper, 31.3 million ounces of gold, and 265 million pounds of molybdenum, contained within 3026 million tonnes of ore and Inferred resources of 5.9 billion pounds of copper, 9.1 million ounces of gold, and 993 million pounds of molybdenum, contained within 1130 million tonnes of ore.^[23]

Pebble East is estimated to contain (at a copper-equivalent cut-off of 0.6%): Inferred resources of 49 billion pounds of copper, 45 million ounces of gold, and 2.8 billion pounds of molybdenum, contained within 3860 million tonnes of ore.^[24]

Pebble is now estimated to be the second-largest ore deposit of its type in the world, superseded just slightly by Indonesia's Grasberg Mine.^[11]

[edit] Permitting

Northern Dynasty has applied for water rights permits to Upper Talarik Creek and the Koktuli River for use in mining operations^[5].

[edit] Salmon resources in the area

Bristol Bay is home to some of the largest runs of salmon in the world (in the tens of millions), and the world's largest sockeye salmon fishery^[25]. It's also a popular sport fishing area, with lodges catering to fishermen fishing for salmon and trophy-size trout. Subsistence fishing is important to the region's native communities.

[edit] Controversy

The controversy over the Pebble Mine centers largely on its potential impact on fish and fisheries. In general, mining opponents claim that the mine poses a significant and unacceptable risk to downstream fish stocks, while mining proponents claim that the mine can be developed without significantly harming the fish.

Opposition to the proposal is being led by a coalition of local native groups (such as the Bristol Bay Native Association^[26] and Nunumta Aulukestai^[27]), commercial and sport fishing organizations (such as the Alaska Independent Fishermen's Marketing Association^[28] and the Alaska Wilderness Recreation and Tourism Association^[29]), and environmental groups (such as American Rivers^[30], Trout Unlimited^[31], and the Renewable Resources Coalition^[32]). Senator Ted Stevens, a strong proponent of other resource extraction projects, has expressed his opposition to the Pebble proposal^[33].

Though relatively unknown outside Alaska (aside from sport and commercial fishing circles), the Pebble Mine project is a hot issue in the state, with articles or letters to the editor in the Anchorage Daily News almost daily. Opinion is divided. According to a poll commissioned by the Renewable Resources Coalition, 53% of Alaskans oppose the project, with 28% in favor, and 19% undecided^[34]. According to a competing poll commissioned by Northern Dynasty Mines, 31% oppose the project, 45% support it, and 24% are undecided^[35]. According to the only poll targeting them, Bristol Bay residents are strongly opposed to the mine, with 71% opposed, 20% in favor, and 9% undecided^[36].

[edit] Arguments against the proposal

[edit] Environmental

• The fish in the watershed, and the wildlife that depend on them, are too important to risk in exchange for the economic benefits of the mine.
• Accidental discharge of process chemicals and byproducts, heavy metals, and acid mine drainage to the environment are realistic concerns in mine design and operation. Some are dangerous to fish and other wildlife.
• Mining has a poor environmental track record. For example, according to the United States Environmental Protection Agency, mining has contaminated portions of the headwaters of over 40% of watersheds in the western continental U.S., and reclamation of 500,000 abandoned mines in 32 states could cost tens of billions of dollars^[37].
• A recent study of 25 modern large hard rock metal mines compared water quality outcomes with EIS predictions from the permitting stage. 76% (19 mines) of the 25 mines exceeded water quality standards in releases to either surface or groundwater. In this study "exceeded water quality standard" does not necessarily mean that the mines failed to abide by their permits. When the 15 mines with; high acid-drainage and contaminant leaching potential, and proximity to ground water are considered separately, this number is 93% (14 mines). ^[38][39]
• Earthquake hazards in the area are poorly known, and preliminary plans by the mining company do not prepare adequately for the potential risk.^[40]

[edit] Economic

• Northern Dynasties is Canadian based corporation.^[41]
• The mine would not provide significant tax revenue to the state. Due to Alaska tax structure, oil and gas drilling returns over 20% of resource value to the state and municipalities, fishing returns 1% to 5%, and mining returns approximately 1.5%^[42][43]

[edit] Arguments for the proposal

[edit] Environmental

• Protection of the environment and fisheries will be ensured by the stringent environmental review and permitting process, including an EIS, that is required before development is allowed.
• Much of the poor environmental track record of mining is from a time before current technologies and regulations.
• Northern Dynasty has a "no net loss" policy for fisheries^[44].

[edit] Economic

• The mine will create well-paying jobs in an increasingly poverty-stricken region ^[45] — roughly 2000 jobs for construction, dropping to 1000 permanent jobs during the 30 to 60 year expected life span of the mine.^[46]
• The mine, and supporting activities, would provide significant tax revenue to the state. The State of Alaska predicts that direct mining tax revenue, even without Pebble, will be one of the most important sources of non-oil tax revenue (exceeding revenue from fishing).^[47]
• Development of the mine would be a huge boost to the economy of Alaska.^{[citation needed]}
• The mine would provide a domestic resource of raw materials lowering the United States reliance on foreign sources.^[48]

[edit] Ongoing political actions affecting the proposal

[edit] Fish refuge

A proposal to the Alaska Department of Fish and Game to create a fish refuge in the Koktuli and Talarik watersheds has been strongly supported by mine opponents and strongly opposed by Northern Dynasty. The Board of Fisheries voted to create a panel to study the proposal (which could decide to recommend a refuge to the legislature), and both sides claimed this as a victory^[49]. In March of 2007 the Board voted to take no action on the proposal due to pending legislation^[50].

In February of 2007, legislation was introduced in the Alaska State House by Representatives Edgmon, Ramras, Dahlstrom, Gara, and Kerttula entitled: "An Act relating to conservation and protection of wild salmon production in drainages affecting the Bristol Bay Fisheries Reserve; and providing for an effective date." ^[51] If passed, this legislation would not allow any development to proceed which would adversely effect the Bristol Bay fishery. This would make it difficult if not impossible for Pebble Mine to continue its development.^[52]

[edit] Alaska Clean Water Initiative

Two versions of the Alaska Clean Water Initiative have been certified by Alaska state officials for placement on the statewide August 2008 election ballot. The constitutionality of both initiatives are being challenged in court (as of April), so their appearance on the ballot is not yet certain.

The stricter of the two versions contains language that would effectively make it impossible to permit any new large mine in Alaska, or to issue new permits to allow existing large mines to continue operations, effectively placing a ban on all mining in Alaska. The less-strict version would be little different than existing regulations.

Supporters of the initiative include some residents of the project area, as well as business interests that benefit from fishing lodges in the area. Opponents of the initiative include some residents of the project area, the Alaska mining community, and the Alaska Federation of Natives.^[53]

Text of the two versions of the initiative can be found at http://www.elections.state.ak.us/petitions/07watr.pdf and http://www.elections.state.ak.us/petitions/07wtr3.pdf.

History of the Initiative:

In April of 2006 a voters initiative was submitted to the State of Alaska for approval to begin collecting signatures. The initiative severely limits the byproducts of mining operations that can be released into streams and rivers and prohibits even the use of any amount of any "toxic agent that may be harmful". It applies to any mining operations larger then 640 acres (2.6 km²), although it has no effect on operations conducted under currently issued mining permits^[54]. However, all mining operations must constantly re-apply for mining permits. This initiative would stop any permits from being granted, thus affecting all mines when their current permits expire.

In June of 2006 Alaska Lieutenant Governor Sean Parnell denied the application on grounds that it would act as an illegal appropriation of state lands. By the Alaska State Constitution, only a vote of the Alaska Legislature can appropriate state lands. ^[55]. Initiative backers appealed to the Alaska Superior Court, which in October of 2007 ruled that the initiative did not violate and constitution and approved it to begin collection signatures^[56]. Currently State of Alaska has decided to appeal the decision to the Alaska State Supreme Court.

Backers of the Alaska Clean Water Initiative were pleased with the Superior Court ruling because it enabled them to petition for signatures at the 2007 Alaska Federation of Natives conference. They hoped that Native Corporations from around Alaska would work together to approve the initiative and oppose Pebble Mine. However, at the conference, delegates from around the state overwhelming voted to oppose the initiative on the basis of it hurting no only the Pebble Mine but any other mining operation in the State^[57]. They followed up this symbolic act with a lawsuit in November of 2007 seeking to stop the certification of the initiative^[58].

[edit] External links

[edit] Government links

• Alaska Division of Mining, Land & Water: Pebble Project

[edit] Pebble Opposition

• Photos and Information
• Renewable Resources Coalition
• Bristol Bay Residents Who Oppose the Mine

[edit] Pebble proponents

• Alaskans Against the Mining Shutdown
• Northern Dynasty Minerals
• The Truth About Pebble
• The Pebble Partnership

[edit] News

• Alaska Report (27 Dec. 2007): Pebble Mine debated in Alaska bush
• Anchorage Daily News (13 Oct. 2007): Pebble mine prospect keeps getting richer

[edit] References