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Welpath

Governor Walker was right about the Pebble Mine

Former Governor Bill Walker was absolutely correct. The Army Corps of Engineers Pebble Mine Environmental Impact Statement (EIS) is a waste of time and money. How can the Corps present an EIS to the public absent an economic analysis showing what they will inevitably approve is actually real? Or just as wastefully, how can they approve plans filed by a company who will not be the operator? The Pebble Mine “Partnership” consists of one company, Northern Dynasty, which does not have the experience, expertise or financial ability to plan and build this mine, nor does it have any intention to do so. In the increasingly unlikely prospect that a real mining company with financial resources steps in, it will control operation and determine its own mine plan, and that will not be the one the Corps just filed. Even more ridiculous is that history and facts indicate a mine does not exist at Pebble, a big low-grade deposit, sure, but not an economically viable mine.

Cominco (now Teck) discovered the Pebble deposit in 1987 and conducted exploration from 1988 to 1992 and again in 1997. I first learned about the Pebble deposit in 1992 after I assumed responsibilities for environmental matters at Cominco. The consensus was that it was uneconomic due to low-grade ore, infrastructure costs, and environmental challenges, especially water management, which is the second biggest operating cost after labor. Later, when Teck dumped Pebble in 2001 I was curious about the company that acquired it. Considering my long experience in the mining business in Vancouver and Forbes’s assessment of the Vancouver stock scene where more “junior” mining companies are headquartered than anywhere else as the “scam capital of the world”, I dismissed it as another stock hustle. I changed my mind, with reservations, when Anglo American bought in. Today I am back where I started.

Keep in mind that Cominco was the most experienced northern miner in the world. Even so they were learning hard lessons about water management in Alaska at the Red Dog Mine. Specifically, almost immediately upon beginning operation they intercepted a major aquifer that had not been identified during exploration that, along with unexpected amounts of run-off from disturbed ground, poured acid and heavy metals into Red Dog Creek. The pH of this discharge was 1.4. To put that into context, a bucket of this splashed on your car would overnight remove the paint.

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ASEA

The Ikalukrok Creek, to which Red Dog Creek is tributary, ran blood red for twenty-five miles to the Wulik River where a rusty plume was visible halfway to the ocean. Observing this from an aircraft for the first time I was told that this was natural. Red Dog has perpetuated this lie ever since. Fish kills in the Wulik, one of the most important Arctic Char waters in the State, were reported but never documented. Finally, several years after start-up and after two Clean Water actions for hundreds of violations and a four million dollar fine, this discharge was partially resolved. So, when considering Pebble with very low-grade ore, the water table at the surface and annual precipitation of forty inches, the Cominco mine planners wisely dumped it. Unlike the Galore Creek project they sold to Nova Gold just across the border in British Columbia, they did not retain back-in rights.ob

The Vancouver Company that acquired Pebble from Teck Cominco was the Hunter Dickinson Group who, according to their 2001 web page, was in the business of discovering properties and developing them to the permitting phase. There is a name for this business model: pump and dump. A shell company they owned, Northern Dynasty, was given the task of doing something with Pebble. And it has done really well, brilliantly in fact. In its sixteen-year history, shares have hit fifteen and then twenty bucks with lots of nice bumps in between. If you were an insider who got in at forty cents you are probably pretty happy. Otherwise, all it has produced is angst for salmon fishers, profit for executives, insiders, consultants and lobbyists, and interest from a couple of law firms who specialize in stock fraud. Perhaps they are the same ones who represented the plaintiffs against Nova Gold who not long ago settled out of court for $28 million (CDN) over alleged securities fraud at Galore Creek.

Northern Dynasty began exploration in 2002 and quickly discovered a really rich deposit that the most experienced northern miner in the world had “missed”. Soon Pebble was “world class”, “world’s biggest”, and so on. In 2007, this enticed Anglo American and Rio Tinto to buy in. Mitsubishi, which is not a mining company but has copper smelters, got in and the Pebble Limited Partnership was created. With the failure of Ballot Measure #4 in 2008, Pebble was in a perfect position to begin the permitting process; they had all the environmental and social data they needed along with compliant and supportive governments, and so they promised permit application in 2009 and almost every year since – this during a period when gold and copper were at record highs. But Anglo, Rio, and Mitsubishi saw things differently because by 2014 they had all abandoned Pebble without retaining any interest in the deposit.

Along with Cominco, they spent around seven hundred million dollars learning it was not viable. Four years later, no senior mining company has shown the least interest except for Quantum Minerals, which is allegedly teetering on bankruptcy, was less than forthcoming regarding its intentions, whose executives have zero experience in North America and who are involved in an ugly legal conflict in the Democratic Republic of Congo. After a brief flirtation with Northern Dynasty even they backed out. All this time Northern Dynasty soldiered on with Washington lawyers and public relations shills – who wouldn’t know a trailer hitch from a frontend loader – complaining about environmentalists and the EPA for blocking a “world class” development – even the Trump EPA.

Besides routinely exaggerating benefits and employment projections, Pebble has released two mine “plans” beginning in 2011 with the “Preliminary Assessment of the Pebble Project”. This five hundred and twenty-nine page report showed a mine plan in some detail but when it came to infrastructure it collapsed. In 2017, Northern Dynasty released a much less detailed plan called “A New Path Forward” and this one forms the basis for the current Army Corp EIS. The “New Path” proposes a smaller and differently oriented mine, one never to experience an earthquake, one never to expand or use cyanide (until they do), and using icebreaker barges to cross Lake Iliamna.

Like the first plan it too falls apart over infrastructure, proposing various options for power and access. We are assured the new plan is environmentally even better than the old one; the one they promised would have zero environmental impact and no “net loss” of salmon. Regardless of the scenario, what will be missing in any plans submitted for approval will be risk analysis. The real risks will not be identified. Risks like dam failure, of which the company designing the Pebble tailings dam has had three disastrous failures since 2000. Nor will there be risk analysis of the inevitable road spills, blocked culverts, inevitable mine expansion with use of cyanide and therefore mercury release, acid mine drainage, fuel spills, accidents and so on. And an icebreaker barge carrying ten-ton pallets of cyanide could never be a problem. And how about dredging the port? And how about earthquake? To say they know the actual location of the Clark Lake fault is highly questionable. As if that were not enough, who would pay for cleanup and maintenance in case of a disaster or when the markets tanked and the foreign operators vanished behind legal firewalls?

What is consistent between both of these “plans” though, is reliance on public funding for infrastructure regardless of the scenario. The 2011 report states: “It is expected that the Pebble Project will utilize the natural gas source ultimately selected by the State of Alaska to supply its power plant by connecting to the existing natural gas distribution system on the Kenai Peninsula. The Pebble Project may also serve as a catalyst and anchor customer for new natural gas production and infrastructure development in the State of Alaska”. The “New Path” states: “…our plan aligns with public policy prioritizing development of low cost energy for rural Alaska”, and “Energizing Southwest Alaska”, and “Low cost electric power or natural gas for region.”

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AES

The Pebble CEO recently admitted that they haven’t conducted even a preliminary economic feasibility analysis nor will one be ready any time soon. What major mining company is going to buy-in without one? Not only that, since Northern Dynasty will not be the operator – whoever that might be will have different ideas how to mine Pebble and these will be dramatically different than the current “New Path.” The notion that some foreign mining company is going to spend six or more billion dollars and build the “New Path” mine and never expand and leave all that gold in the ground and in the tailings is nuts. That would not impact approval though. Permit applications would be modified and quickly approved again.

Finally, who would pay for power and other infrastructure? Both published mine plans allude to State contribution for infrastructure. It’s hard to imagine that Northern Dynasty has for sixteen years promoted a project, for which well over half a billion dollars were spent, without conducting an economic feasibility analysis. Beyond doubt they have – many of them – and they have all been negative. It’s also hard to believe they counted on public financial support without assurance from the State that this was forthcoming. Or perhaps not, but in any case both published plans tout regional development as justification for State money.

The people of Alaska need to know where these discussions are at, what commitments the State has made to Northern Dynasty, and what intentions they have for the region. If they have made none, and will not make any, then Pebble is dead even before considering all the environmental risks. Finally, consider that Cominco, Anglo American, Rio Tinto, and Mitsubishi decided it was a no go after they spent twenty-six years and seven hundred million dollars.

Bruce Switzer served as senior technical advisor and public spokesperson for Alaskans for Clean Water during Ballot Measure #4 in 2008. He was in charge of environmental affairs at Cominco, reporting to the President at the time Red Dog was going into production. Previously, he held a similar role at Denison Mines and has worked as a consultant to businesses in the mining industry. He has managed the successful permitting of mines and worked on the permitting of projects that did not proceed. He wrote a novel in 2012, “The Copper Mine,” which is about a tailings dam failure at a Canadian owned mine in Chile. 

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Carvel

Forgot something in your opening.Bruce Switzer served as senior technical advisor and public spokesperson for Alaskans for Clean Water during Ballot Measure #4 in 2008. it failed

SCOTT ST AUBIN

The most one sided article I have ever read congrats comrade, totaly bogus facts, pure propaganda as evidenced by zero facts, only what- if fearmongering.

Julie

Thank god someone can see this article for what it is. Terribly written and full of lies. Shame on you Brice Switzer

Truth Lies With Us

This sounds like Obama himself wrote it the only difference is Trump for mining comrade Obama was not there i fixed your article for u

Pebble is the only large mine in Alaska in the last 20 years that has put forth this size a proposal without a feasibility study. The reason the that is obvious. I hope your critics are willing to put their investment dollars where their opinions lie.

Brad Morris

“The reason for that is obvious”

You mean that they don’t want to waste their money on a feasability study for a mine that hasn’t obtained environmental approval yet? Or that they know that a copper bull run is coming and a deferred feasabiliity study will make the mine more attractive?

Both of those reasons seem pretty obvious to me, too.

Kathy D. Brensinger

I have been reading about this mine for a good while now. To say this mine is a very bad idea is an understatement. If I lived in Alaska I would be doing everything I could possibly do to never let this mine come into existence. Just the thought of this mine being in operation makes me sick. There are so many things that could go wrong and create environmental disasters should stop anyone who cares about Alaska and its people, wildlife and land right in their tracks. I hope this mine never comes into existence.

You ever heard the quote Better to remain silent and be thought a fool than to speak and to remove all doubt (MarkTwain). Know your facts first

Tim

Not according to the DEIS. It is scientifically impossible for this to cause environmental disasters. Rest easy, no reason to be sick. Of course I’m sure science doesn’t matter to you. Can’t let facts inconvenience your propaganda.

Brad Morris

Kathy, the scientific studies have been done and the risk that this mine presents to the environment has been quantified. You are listening to the fearmongers who are conjuring these horrific post-apocalyptic scenarios and who do not feel that they need to tell you how they’re going to happen. As long as they can make people afraid of the boogy man, they don’t have to justify their reasons for claiming he exists. The phrase for that is ‘willful ignorance’. Look, it’s good to be concerned for your environment, but justify your concern with demonstrable or realistic scenarios – because aliens… Read more »

Louis King

People of Alaska, this article was written with the clear intent of further impoverishing the minds of those without true knowledge of the facts. Stand up and fight back! This mine will make Alaska greater than ever. Don’t lose out on the jobs and other opportunities because of the agenda of some with no real cause, except their own. The mine is a blessing to all of Alaska! Go Pebble.

monkfelonious

OK Louis, tell us how? All I know is that mining pays NEARLY NOTHING into the state treasury. Yes there are jobs and just exactly like every extraction industry here close to 30% of the employees will not be Alaskans. On top of that they will pack their earnings elsewhere. Simple incontrovertible fact. Of course, the Carhart sellers (Chambers of Commerce) all want this but just show me, diffinativly, how this is a great deal for Alaska. You can’t and you know it.

Brad Morris

The inverse ‘incontrovertible’ fact is that 70% of the employees WILL be Alaskans. And bringing in expertise for resource extraction is a good thing. Regardless of how they decide to spend their own money, they WILL be residing in Alaska and spending their money here on a day to day basis. Anywhere else on the planet, a large company moving into town who is going to employ thousands of people and import foreign expertise to the area is a very good development – and nobody is complaining that they’re not paying into state treasuries. Why would you think Alaska would… Read more »

etcm_nuke

The fishing industry does not even pay enough to pay enforcement costs to the federal nor state. and about 80% of its workers are non-Alaskan, and over half are foreign workers, and about 85-90% are all either taking money back to their foreign country or living in Alaska on welfare (federal and state). So, IF a high paying job -mining jobs, are here, Per your logic, the enterprise that they create is of no benefit to the state. Just the fact that many will no longer be on welfare, and will be working in an industrial based job benefits the… Read more »

etcm_nuke

Mistake with a double post

Kim

All expired evens and twisted truth, rediculous logic. Pebble mine will benefit, local population,state of Alaska,and the USA as a country. AND the fisheries in the area are enhanced, by accessibility, low cost power and better pricing for their product because refrigeration will make their catch more desirable. Green supporters should be extatic because all that Cooper will benefit the move to green technology and it comes from a country with the worlds strictest environmental protections. The easiest way for a forgen country to undermine the USA and its economy. Create an organization that plays on the citizens, telling lies… Read more »

James Cumbee

wow, its almost like joel reynolds himself wrote this hit piece.

So how much did NRDC pay you? I hope it was more than they paid their “scientists” Borden confirmed to Bloomberg Environment that NRDC paid him for the study. Neither he nor NRDC specified the amount, but Borden said it was half his usual rate as the owner of consultancy Midgard Environmental Services LLC. https://capitalresearch.org/article/two-gold-into-dross/ EPA manipulated the peer review of the Assessment itself in a way designed to minimize criticism of the Assessment. EPA violated its own standards when, during the first peer review, it unduly restricted the schedule, shielded the peer reviewers from public comments, and then held… Read more »

Brad Morris

What is this obsession with this ill-advised demand for an immediate feasibility study? Look, there is no mining major on the planet that is the least bit interested in spending billions of dollars on a money-losing mine. If NDM (or purchasing company) is unable to present a positive EFS at some point, the mine will simply not get built. It’s a problem that solves itself one way or another, and the only reason for bringing it up is to promote aimless negativity. “Or just as wastefully, how can they approve plans filed by a company who will not be the… Read more »