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Pebble Mine (Copper/Gold Prospect)

Last Modified: 16th September 2013

Summary

If built, the proposed Pebble Mine would be North America's largest gold and copper mine.  It is also the largest gold deposit in the world. The project is located on Alaska state land in Southwest Alaska, near Lake Iliamna and Lake Clark.

This proposal has been very controversial in Alaska and has garnered attention around the world -- in large part because the mine would sit in the headwaters of some of the most productive salmon rivers in the world. This project is being undertaken by the Pebble Limited Partnership, which is currently 100% owned by Northern Dynasty Minerals, a junior mining company that began exploration at the Pebble site in 2002. While this proposal is still in the planning and pre-permitting stages, the general outline of the plan consists of a large open pit mine, a similarly large underground mine, and the impoundment of billions of tons of mining waste behind several earthen dams.

Proponents argue that the mine will create jobs in the region and tax revenue for the state of Alaska, and that it is impossible to oppose a project before final plans are drawn up. Opponents argue that the mine would negatively impact the entire Bristol Bay watershed regardless of design details, and create an unacceptable risk to fisheries downstream forever.

Location

The Pebble prospect is located in an area of wet tundra surrounded by low mountains approximately 16 miles west of the village of Nondalton. The communities of Nondalton, New Stuyahok, Ekwok, Dillingham, Naknek, South Naknek, King Salmon, Levelock, Igiugig, Newhalen, Iliamna, Pedro Bay, and Kokhonak lie in the region of the proposed mine, and many are directly downstream of the Pebble site.

The prospect sits on a drainage divide between Upper Talarik Creek and the Koktuli River, which form the headwaters of two separate rivers draining into Bristol Bay. Frying Pan Lake, located in a proposed tailings storage area at the Pebble site, drains into the Koktuli River, which then joins the Mulchatna and finally the Nushagak River. The Nushagak empties into Bristol Bay near the town of Dillingham. Upper Talarik Creek drains into Lake Iliamna, which empties into Bristol Bay through the Kvichak River.  

This site is also surrounded by other mining claims. These are unlikely to be developed on their own, but may piggyback on infrastructure built for Pebble.  In this sense, development of Pebble may trigger widespread mine development in the area.

Ownership and layout

The proposal for Pebble Mine is being put forward by the Pebble Limited Partnership which as of September 2013 is 100% owned by the Northern Dynasty Partnership which is a subsidiary of Northern Dynasty Minerals Limited (Canada).  One of the major shareholders in Northern Dynasty Minerals is Rio Tinto (United Kingdom/Australia).

Groundhog Mountain

View from within the Pebble claims

View from within the Pebble claims

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The mineral prospect includes two distinct areas, Pebble West and Pebble East. Pebble West is relatively shallow, and would be a massive open-pit mine, almost two miles wide and a few thousand feet deep. The ore in Pebble East is much deeper beneath the surface and would be mined using block caving. This process involves mining the deposit from the bottom upwards, collapsing the ground into the cavity left behind. These mines would use all of the water from the upper reaches of Talarik Creek and the Koktuli River.

Opposition

Opposition to the Pebble project has been intense and widespread.  Most communities and tribal organizations in the area are officially opposed to the project including the two regional level native organizations.  Other pressure has come from numerous local residents, conservation organizations, and fishing groups (both recreational and commercial).  In addition opposition has come from consumers of jewelery and seafood, as well as from a large number of outdoor-related groups and outfitters.   See our article "Opposition to Pebble" for more detail.

Environmental Concerns

Discussion of the impacts of the project are dominated by three related topics; the perpetual storage of mining waste, the footprint of the mine, and the potential impact on fisheries in the region.

Tailings area

The most recent plans from Pebble would put tailings many hundreds of feet deep here.

The most recent plans from Pebble would put tailings many hundreds of feet deep here.

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Mining waste storage

The perpetual storage of acid generating tailings behind earthen dams is probably the single greatest hazard posed by this project.  The most official proposal available calls for at least four large earthen dams, effectively replacing two valleys with large lakes. Depending on how the waste is processed and stored, these may or may not require water treatment in perpetuity.  Concerns include the worldwide history of failures at containing mine tailings, the inadequate consideration of seismic hazards in the area, complex local hydrology, and the long-term risk to Bristol Bay fisheries.  See our articles "Pebble and Perpetuity", "Tailings Storage at Pebble", and "Alternative Tailings Storage at Pebble" for more details.

Footprint of the mine

In addition to the issues surrounding the tailings facility, the mine itself would turn many square miles of valleys and river into an open pit, waste piles, and mineworks. Pebble Mine would be a massive industrial project employing 1000 workers and using more power than the entire Kenai Peninsula. Development of the mine would bring many miles of roads and bridges, transmission lines, and pipelines into an undeveloped area. Transport of the ore would most likely be along a private 100-mile road to a new port in Cook Inlet. All of this infrastructure would impact the surrounding ecology and the subsistence lifestyle of the majority of communities in the area.  Additionally, this infrastructure could be used to support other mining projects on nearby mineral claims that could amplify the footprint of the mine.  Lastly the mine would produce pollutant emissions from burning millions of gallons of diesel fuel, natural gas, and ship fuel in the course of normal operations.  The emissions would include heavy metals, particulate matter, and between 47 and 150 millions tons of CO2 (over a 25 year or 75 year mine life). At 1.9 million tons per year, this is an annual CO2 emission level comparable to the yearly emissions of a small African country (Madagascar: 1.9 million tons/yr). Over the lifetime of the mine, this could add up to more the annual emissions of a small European country (Belguim: 105 million tons/yr).

Impact on fisheries

Any large tailings dam that needs to be maintained in perpetuity presents a risk to downstream ecosystems.  The Pebble site is at the headwaters of the productive Bristol Bay watershed. The waters downstream of Pebble contain all five species of Pacific salmon, pike, several types of trout, char, and whitefish. Sport, commercial, and subsistence fishing are critical components of the economy and livelihoods of Bristol Bay and most of the debate about Pebble Mine centers around the potential impact on these fisheries. Bristol Bay is the largest commercial sockeye salmon fishery in the world, with an estimated run size of 32 million fish in 2012.

Northern Dynasty maintains that it has a "no net loss" policy for fisheries in the area which would mean than any loss of productivity would be theoretically compensated for in some other way. These direct effects that Pebble would seek to mitigate include destruction of salmon spawning habitat near the mine, an increase in "total dissolved solids" downstream of the mine, and the release of metal compounds that can interfere with the homing mechanism of salmon. A similar policy is in effect in Canada, where it includes actions such as attempting to create new habitat near the habitat that was destroyed, or simply paying a lump sum to the government to compensate for the fish and habitat loss. No studies have determined whether the no net loss policy has been effective in Canada. Even if such a policy could possibly mitigate some of these direct negative effects of mining on the local salmon populations, it could never begin to address a large scale tailing dam failure.

Pebble Exploration

(2008)

(2008)

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How much metal?

In February 2010, Northern Dynasty released new estimates of the maximum total amount of minerals within the Pebble deposits including 80 billion pounds of copper, over 100 million ounces of gold and 5.6 billion pounds of molybdenum.

Both the quantity of metal and the quality of the ore will figure into how much could be eventually mined. Therefore Northern Dynasty has published estimates of the copper resource ranging from 400 million pounds to 80.6 billion pounds depending on the geologic and economic criteria used. If prices are higher, mining lower grade ore becomes economically feasible. The amount of copper that could be recovered at this site by a large-scale mine under current economic conditions would be closer to the higher end of this range than the lower, making this one of the largest copper resources in the world. The potential recovery rates at Pebble West have been estimated at 85% for copper, 70% for gold, and 78% for molybdenum.

Employment and Economics

Based on the maximum resource recovery rates above, and the spot prices for copper ($3.5/lb), gold ($1720/oz), and molybdenum ($11/lb) in November 2012; the total market value of Pebble Mine could be in the neighborhood of $500 billion.

Unfortunately for the state, metal mining returns far less tax revenue than oil and gas. For example in 2004, one tax assessment showed oil and gas extraction in the state paid about 19% of the oil and gas's market value in combined state, borough, and municipality resource taxes. On the other hand, metal mines paid about 2.3% of the market value of their metal in combined taxes. Another assessment for 2004 calculates these rates at 22.3% and 1.5% respectively. Using rates of 1.5%-2.3% and the market value of metal above we can estimate that the Pebble mine could pay up to $7.5-11.5 billion in combined natural resource taxes over the lifetime of the mine.

To estimate the total economic impact of the mine, impacts to fisheries, tourism, and other industries should be compared to these direct economic benefits of the mine. Also the chance of accidental failure of the waste storage facility needs to be considered. The annual economic value of the fisheries, hunting, and tourism industries in Bristol Bay exceeds what would be generated by the mine. Around 75% of local jobs are related to the fishing industry, with a total payroll of around $175 million. Bristol Bay alone is responsible for around 40% of the nation's salmon catch each year.

Due to the ownership structure of the current developing firm, most of the profits of the mine would flow out of state, to the owners and managers of Northern Dynasty Minerals, while purchases of most mining equipment and supplies would likewise go to out-of-state suppliers, and many services contracted (such as ocean-going vessels calling in port) would be of minimal economic benefit to the state.

In addition to the direct economic impacts on Alaska, there is the broader question of the value to society of the mine.  While gold has very little utility, both copper and molybdenum are critical metals in modern civilization.  Copper in particular is one of the most important metals of the modern age, used heavily in electronics, electric motors, plumbing, and roofing.  Copper is central to many "green" technologies such as windmills and electric cars.  However, mining more metal has the net effect of reducing price and therefore reducing the rate of recycling and the incentive to conserve existing stocks.  Recycled copper has a much smaller environmental footprint than virgin copper produced from a mine.  This comes at a higher price, but that price may be closer to the actual "true cost" to society. 

Frying Pan Lake

North end of Frying Pan Lake.

North end of Frying Pan Lake.

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Latest News

In 2012 the Environmental Protection Agency (EPA) agreed to conduct a "Watershed Assessment" of the Bristol Bay region.  This request was brought by a number of tribal groups, conservations organizations, and concerned individuals.  Involvement of the EPA was opposed by PLP, and some tribal groups in the region.  The draft report by the EPA was issued in May 2012 and concluded that mining development posed a significant threat to salmon fisheries in the region.  The report was peer-reviewed by an independent panel of experts in August 2012.  This panel gave numerous suggestions for improvement to the report, and generally agreed with the overall findings. In April 2013 the EPA released a revised Watershed Assessment, taking into account scientific peer review of the initial report as well as over 200,000 comments.

In October 2012 a different series of panel discussions took place in Anchorage.  These were hosted by the Keystone Center and have been the subject of much controversy in the state.  See our article on the Keystone Dialogue for more information.

In April 2013 PLP announced that they had budgeted $80 million for the year with the goal of beginning permitting by the end of year.  Around the same time they also purchased the Pebble South block of claims nearby.  In May 2013 Northern Dynasty released an "Economic Impact" study on the economics of the Pebble project.

In September 2013, Anglo American pulled out of their 50% share of the Pebble Partnership leaving sole control of the project with Northern Dynasty.

Exploration:
2010Exploration: Pebble spent $73 million on the project in 2010, which included engineering studies and environment/socioeconomic studies. Direct exploration included aerial surveys, seismic lines, surface pits, and drilling of an unknown number of holes.
2011The $91 million work plan for 2011 included the continuation of environmental/socioeconomic studies, engineering studies, and extensive drilling. (status unknown).
20122012 exploration consisted of 16 exploratory boreholes, and 61 geotechnical boreholes.
2013Ongoing exploration work with an emphasis on baseline studies to begin the permitting process.

See also further details on this exploration or our interactive map of exploration in the state.

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Attribution and Copyright info

By David CoilErin McKittrickAndrew MattoxBretwood HigmanGround Truth Trekking

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Date Created: 5th May 2010