Fish Are Our Gold Mine: Backgrounder on Northern Dynasty's Proposed Pebble Mine

Alaskans for Responsible Mining

The Pebble project is a proposed gold, copper, and molybdenum mine in Southwestern Alaska, 24 kilometers north of Lake Iliamna. Northern Dynasty Minerals, a Canadian company based out of Vancouver, owns the rights to the mineral deposit.

The Pebble project is divided into Pebble West and Pebble East, covering 396 square kilometers of property. Pebble West will be a 4.1 billion tonne open pit deposit, whereas Pebble East will be a 1.8 billion tonne bulk underground mine of high-grade porphyry. The open-pit of Pebble West will measure two miles long, a mile and a half wide and 1700 feet deep.[1] If developed, the Pebble project will become Alaska’s largest mining site containing 61 million ounces of gold, 50 billion pounds of copper,[2] 1.3 billion pounds of molybdenum and 3 billion tons of waste.[3] The Pebble Project will require a deepwater shipping port in Cook Inlet and the construction of an industrial road. The Pebble Mine has a projected life expectancy of 30-60 years.

Cominco, now Teck Cominco, originally staked the Pebble West property in 1988. However, gold prices fell and Cominco left the site unexplored until 1997. In 2001, as gold prices were rebounding, Northern Dynasty acquired 80% interest in Pebble, later acquiring the final 20% on March 14, 2005.[4] Northern Dynasty Minerals also formed an Anchorage-based subsidiary, Northern Dynasty Mines, which began drilling for core samples and taking environmental measurements.[5] Currently, the permit applications have been deferred until the deposit is fully assessed within an Integrated Development Plan (IDP). The company will not be submitting permits until 2008 and the earliest date to start production is forecasted for 2011.[6]

The Pebble Mine site is located 24 km from Lake Iliamna, Alaska’s largest fresh water body, measuring 128 km long and 32 km wide. It is the headwaters of the Upper Talarik and Kvichak rivers, which in turn empty into Bristol Bay. The Bristol Bay Watershed is home to over 120,000 Mulchatna caribou, plus numerous moose, bear, trout, freshwater seals, Chinook and Sockeye salmon, in addition to five species of Alaska’s pacific salmon.[7] Bristol Bay is the world’s largest commercial wild salmon fishery, with 8 or 9 million fish spawning in the tributaries of Iliamna Lake.[8] In addition, the Koktuli River, the proposed permanent storage site for the Pebble tailings pond,[9] “rises from a glacial scour known as Frying Pan Lake, which would become part of the mine’s tailings impoundment; it flows into the Mulchatna, which joins the Nushagak, which pours into the bay west of the Kvichak. All these rivers are world-class trout and salmon streams.”[10] In Alaska, commercial fishing employs 12,500 people and is a $93 million industry.[11] However, open-pit mining is “an enormous threat to Alaska’s world-class fisheries.”[12] In addition to the negative impact posed to fish and water, the noise and vibrations from heavy machinery could disrupt the migration patterns of caribou and moose.[13]

Many open-pit mines throughout the United States that were peddled as being environmentally state-of-the-art have left behind a history of “fish kills, acidified streams, and land blanketed with toxic dust.”[14] Northern Dynasty argues that the impact on the environment will be minimal and well managed.[15] However, “The EPA [Environmental Protection Act] identifies hard-rock mining as the leading source of toxic releases in the United States, and open-pit mines are the worst offenders.”[16]

During open pit mining:

Giant machines scoop out a man-made canyon; mineral-rich rock is separated from the worthless stuff, crushed in an on-site mill, and treated with chemicals to strip away the valuable material for gold and copper, less than 1 percent of what is mined. Unused rock is stored in enormous piles, while the mill waste, a thick slurry known as tailings, is sequestered in an artificial pond. (The Pebble Mine’s tailings pond would likely measure some 10 square miles.) In theory, the pond along with pumps and diversion channels, and perhaps a layer of soil tamped over the waste rock keeps any harmful substances from leaching into the environment. In practice, mining waste can react with air and precipitation to create sulfuric acid runoff. It can contaminate streams and groundwater with heavy metals such as mercury, arsenic, and selenium. The chemicals used in processing the rock, including cyanide, can escape through accidents or leaks.[17]

With the environmental threat posed by the Pebble Mine, American Rivers, an environmental group based out of Washington D.C., has listed the Bristol Bay Watershed as being the eighth most endangered river system in the United States. [18] In March 2006, Republican Senator Ted Stevens announced his opposition to the Pebble Mine stating that the planned mine site “is a significant area for salmon production,” [19] and asked associated federal agencies to give the project “a careful review.” [20] Furthermore, he argued that "If this was some essential commodity that we absolutely had to have to run our economy it would be a different matter, and even then I would want to have a lot better attention being paid to the environmental process. But this one, I just don't like it.” [21]

Similarly, in April of 2006, the National Wildlife Federation passed a resolution against “any mining activity in the Bristol Bay Watershed that does not ensure the full protection of its fish, wildlife, environmental and cultural values.”[22]

Many local villages have passed resolutions opposing the mine as they are dependent on fishing, hunting, clean water and opposed to non-renewable resource development. The Village of Nondalton, situated closest to the proposed Pebble mine, has stated that it will not give Northern Dynasty a social license to pursue its project.[23]

Many communities fear that allowing the Pebble project to go ahead will lead to many more mines being developed as other mining companies have already staked claims 2598 square kilometers around the Pebble Mine site in anticipation that the whole area may be a gold mine.[24] While many of the claims may never become active mine sites, if Pebble proceeds, the Bristol Bay watershed could become a busy mining district instead of a sparsely settled wilderness.[25] Currently in Alaska there are three large hard-rock mines in operation with eight more in the planning stages.[26]

In addition to the environmental threat that Pebble poses to the Bristol Bay Watershed, this project will not generate much revenue for the State of Alaska. “Proposed by Northern Dynasty, a Canadian company, the Pebble Mine would require a an enormous expenditure of public funds, perhaps as much as $400 million, for industrial infrastructure while it would return very little to the state in royalties.”[27] In fact, mineral extraction returns less to the state than petroleum production. According to data from the Alaska Department of Revenue, out of 2.9 billion dollars worth of minerals mined between 2001-2003, only 1.6% was returned to the Alaskan state and local governments in terms of taxes, royalties and fees.[28] Mining companies pay less than 3 percent of their net revenue whereas petroleum companies pay up to 25 percent.[29]

The Alaska Wilderness Recreation and Tourism Association (AWRTA) strongly opposes the Pebble Mine project or any other large-scale mining activity in the Bristol Bay Watershed stating that the “proposed Pebble Mine and Bristol Bay Mining District would threaten the region’s renewable natural resources, undermine Alaska’s nature-based tourism industry and return very little to the state of Alaska... Large-scale mining in this area would eliminate ecotourism opportunities and threaten thriving businesses that depend upon clean water, abundant fish and wildlife, and intact ecosystems.”[30]

Although the Pebble Mine is projected to provide 2000 people with jobs during construction and 1000 long term operations jobs when the mine starts,[31] many people are concerned that most of the jobs will go to people who do not live in Alaska. While a skilled position could pay up to $60,000 a year, “doubters contend that the borough’s 1,600 residents, 43 percent of whom are under 18 or over 65, can’t possibly fill those jobs, and that the outsiders who will come to work on the project will tax the land and degrade native culture.”[32]

Furthermore, in Alaska, the rules regarding mine reclamation are less strict than in other US states as Alaskan law allows mining companies to give a corporate guarantee, or promise, rather than a percentage of the reclamation bonds needed for mine cleanup.[33] This ‘corporate guarantee’ often leads to a mining company declaring bankruptcy, abandoning their mine site and leaving the state to clean up the environment. In other cases, the mining company will simply provide inadequate reclamation bonds that still require the state to foot the bill for clean-up. Since the “mining industry is unsustainable by its very nature and is defined by boom and bust cycles that jeopardize the environment, human health and rural communities,”[34] it is clear that lax law regarding reclamation in Alaska could prove to be fatal for the Bristol Bay Watershed.

Northern Dynasty Minerals has received financial backing from Kennecott Canada Exploration, a subsidiary of the London-based mining giant Rio Tinto. Kennecott Canada paid $87 million dollars for a 9.9 percent stake in Northern Dynasty, which will be used to further explore and develop the Pebble Project.[35] Kennecott will also be assigning three technical advisors to the project.[36] The current purchase agreement between Kennecott and Northern Dynasty allows Kennecott to expand its future ownership to as much as 19.9 percent.[37]

Kennecott Canada, in collaboration with Hecla Mining, currently operates Greens Creek, an underground silver, gold, zinc and lead mine in southeastern Alaska. Rio Tinto, which owns Kennecott, is one the worlds largest mining companies. Last year alone it reported $5 billion in profits on $19 billion in revenue.[38] Rio Tinto is also well known for attracting “more complaints of environmental destruction and abuse of indigenous people's rights than any other [company].”[39]

Many organizations have mounted campaigns against Pebble including Trout Unlimited (a national conservation group which has 150,000 members), Alaskans for Responsible Mining, the Renewable Resources Coalition, the Bristol Bay Alliance, the Alaskan Inter-Tribal Council, the Alaska Independent Fishermen’s Marketing Association, the Alaska Wilderness Recreation and Tourism Association, American Rivers and the National Wildlife Federation.[40]