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By Stephen Lee
Pebble Partnership, which hopes to build a gold and copper mine in Alaska, isn’t denying suggestions that it might someday try to expand the project, as environmentalists fear.
But any expansion would have to satisfy federal regulators, Tom Collier, chief executive of the Pebble Partnership, told Bloomberg Environment.
“It wouldn’t surprise any of us that are working on this particular permit application that there might be another one at some point in the future,” Collier said. “But that expansion or second phase would require an entirely new, thorough, and rigorous process. You don’t get a leg up and an easy expansion once you’ve developed part of the project.”
If and when it’s built, the Pebble Mine would tap into one of the biggest gold and copper deposits in the nation. Its supporters say it would bring much-needed jobs and economic growth to the region. The project’s opponents, however, argue it would have vast environmental impacts, including endangering the world’s largest wild salmon fishery, as well as human health.
The plan stalled under President Barack Obama, which slapped tough Clean Water Act restrictions on the project in 2014. The Trump administration settled with Pebble last May, however, letting the mine move forward.
What’s stoking environmentalists’ concerns is a simple calculation: the new Pebble Mine plan, released earlier this month, may be significantly smaller than earlier proposals, but it would still require lots of physical infrastructure, such as a natural gas-fired power plant and several miles of pipelines and roads at the mine site near Bristol Bay on Alaska’s southwest coast.
Many of those building costs are fixed, meaning a small mine isn’t necessarily a safer investment than a big one, said Taryn Kiekow Heimer, senior policy analyst at the Natural Resources Defense Council.
For that reason, coupled with the fact that the resources being mined “are so low grade that, for every pound of gold or copper they pull out, they’re going to have 99 pounds of waste,” Kiekow Heimer said she sees “no way” the mine can turn a profit.
But in Collier’s view, last December’s $150 million investment by First Quantum Minerals Ltd., to be paid over four years, confirms that the project again has a clear path forward.
“You don’t invest that unless you’re pretty sure” a project will be permitted and start making money, Collier said. “We’ve got the money, we’ve got the science, and we’ve got the commitment [from investors]. It’s a new day for Pebble.”
Sahm Adrangi, chief investment officer of New York hedge fund Kerrisdale Capital, told Bloomberg Environment that this is far from the first time that outside investors have shown an interest in Pebble.
“They’ve all backed out in the past,” Adrangi said. “Pebble has been telling different versions of the same story for a very long time now. They’re the boy who cried wolf.”
Adrangi wrote a scathing report on the mine project last February, which he said he still stands behind.
He also called the First Quantum announcement “strange” and “a bit flaky,” noting that the company had only agreed to a placeholder deal to negotiate a final agreement. Under the deal, First Quantum can pay $1.5 billion at the end of permitting in order to earn a 50 percent ownership of the Pebble Partnership.
Collier said he “can’t imagine” a major mining company like First Quantum failing to exercise its option on Pebble, as long as it gets a permit.
The option “will only be exercised if the project is economically, environmentally, and socially sound and has the support of stakeholders,” Clive Newall, First Quantum’s president, told Bloomberg Environment.
Kiekow Heimer said one of the NRDC’s top priorities now is to meet with First Quantum and explain why the group doesn’t think the project is economically viable. So far, First Quantum hasn’t responded to the meeting request, she said.
Environmentalists have further alleged that the new mine plan would destroy more than 3,000 acres of wetlands, three times as many as the maximum 1,100 acres the Obama Environmental Protection Agency said it would allow to be lost.
In response, Collier said he was “not certain” about the 3,000-acre figure.
“We’re going through the numbers now. I’ve been moving so fast I haven’t had a chance to get to the bottom of the concern about wetlands,” Collier said.
But he also said some of the project’s opponents are confused about which wetlands should count in the footprint and which shouldn’t.
“There are lots of apples and oranges issues here,” Collier said.
Meanwhile, Alaska’s lawmakers are finding themselves caught in the crossfire, as yet unwilling to throw in their lot with one side or the other.
Rep. Don Young (R), the state’s lone House member, “is not weighing in with an opinion on the proposed mine, but he encourages the EPA to complete an assessment of the new Pebble Mine project,” his office told Bloomberg Environment.
Both Sens. Dan Sullivan (R) and Lisa Murkowski (R) have been friendly to the mining industry in the past.
Murkowski owes her seat to a write-in bid in 2010 that was boosted by indigenous communities and other remote populations such as those in Bristol Bay, raising the possibility that she may be responsive to concerns about Pebble Mine.
But Murkowski also blasted the Obama EPA when it put restrictions on the project, saying Alaskans should be allowed to decide how to develop their own lands.
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