Anglo-American pulls out of Pebble Mine project

From Sean Cockerham, Anchorage Daily News/9/16/1

WASHINGTON — One of the two companies seeking to build Alaska’s Pebble mine is dropping out of the project as scrutiny grows over its impact on wild salmon.

British mining giant Anglo American said Monday it is withdrawing from the Pebble Partnership, a 50-50 venture with Canada’s Northern Dynasty Minerals. Anglo American will take a $300 million charge for dropping out.Anglo American CEO Mark Cutifani said the company wants to focus instead on lower risk projects.

“Despite our belief that Pebble is a deposit of rare magnitude and quality, we have taken the decision to withdraw following a thorough assessment of Anglo American’s extensive pipeline of long-dated project options,” he said in a written statement. “Our focus has been to prioritize capital to projects with the highest value and lowest risks within our portfolio.”Northern Dynasty vowed to press forward on the mine. “

Northern Dynasty and the Pebble Partnership have both the expertise and resources necessary to advance the Pebble project,” Northern Dynasty CEO Ron Thiessen said in a written statement on Monday.

It’s not clear what Anglo American’s withdrawal will mean for the operations of the Anchorage-based Pebble Partnership, which Northern Dynasty and Anglo American set up in 2007 to design, permit and run the mine.

The Pebble Partnership is circulating an internal memo that says “Pebble remains an important project for Alaska and we will share additional information about the way forward for the project in the days and weeks ahead.”

The Pebble Mine is a potential $300 billion deposit near the headwaters of tributaries of the Kvichak and Nushagak Rivers. It ranks among the largest undeveloped copper deposits in the world and has the potential to be the biggest open pit mine in North America.

The Environmental Protection Agency is considering blocking the mine to protect Alaska’s Bristol Bay salmon. It’s the most valuable fishery in the world, producing about half the world’s supply of wild red salmon.

A draft EPA study released in April concluded that even without a major accident the mine could wipe out nearly 100 miles of streams and 4,800 acres of wetlands in the Bristol Bay region. In addition, failures of a pipeline carrying the copper concentrate or a tailings dam holding the mine waste could poison salmon with acid producing compounds or copper.

The Pebble Partnership maintains the EPA report is based on inaccurate guesswork about what the mine will look like. The final design for the mine hasn’t been set.

Anglo American’s decision to drop out of the project comes as the company seeks to reshape its operations. Cutifani took over as CEO this year following the resignation of Cynthia Carroll and promised to be more discriminating about which projects the company was going to put its money into.Anglo American has a backlog of too many projects in early development, Cutifani said in a July presentation.

“When we apply a tough financial hurdle rate to those projects, we’re knocking things out that probably shouldn’t be there,” he said in the presentation.Pebble is the principal asset for Canada’s Northern Dynasty, which acquired the prospect in 2001 and entered into the partnership with Anglo American six years later.

Northern Dynasty CEO Thiessen on Monday noted that Anglo American put $541 million into the project. “Northern Dynasty will again own 100 percent of one of the world’s most important copper and gold resources and will have the benefit of $541 million worth of expenditures, which opens the door to a number of exciting possibilities for Northern Dynasty and its shareholders and the Pebble Project and its stakeholders,” Thiessen said in a written statement.

Email: scockerham@mcclatchydc.com; Twitter: @seancockerham

Read more here: http://www.adn.com/2013/09/16/3077902/anglo-american-pulls-out-of-alaskas.html#storylink=cpy

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