Compass: Pebble can't work for Alaska

By BRUCE C. SWITZERMay 4, 2013 

Mine permitting is neither rigorous nor scientific. Disagree? Name one mine that did not proceed because of review process rejection. Then name one open pit mine that does not have, or has not had, serious environmental problems.

In reality, the permitting process is a sham. Consultants collect voluminous amounts of regional natural history data from which impressive verbiage, charts, graphs and maps are prepared. Then the mine plan is superimposed on the maps showing the biological resources of the region. The mining company concedes loss under the mine footprint but promises never to have an accident, that everything will work exactly as designed, that nature will cooperate, that management places environmental protection ahead of production, that permitted discharges will never be exceeded, that only unemployed local people will be hired and so on.

The real risks will not be identified except to minimize them, and future mitigation of these will be qualified with phrases like "as practicable" and "as mutually agreed upon." Then the project is approved.

Since 2008 Pebble has annually stated that permit applications are forthcoming next year. Five years later, it's still next year. Under the Alaska process Pebble had more than enough environmental information for permitting in 2009. Moreover, approval is foregone as far as the Department of Natural Resources and the administration are concerned. Contrary to Pebble and others, permitting in Alaska is easy -- witness Rock Creek. In fact, the archconservative Frazer Institute every year points to Alaska as one of the most mining friendly places on Earth. Pebble should have been in production two years ago.

So, with commodities at record highs, why did Pebble delay permitting? I think it rediscovered what Cominco knew: Pebble is economically marginal and physically challenging. That's why Cominco sold it for peanuts and waived back-in rights.

The reason for procrastination is simple. Pebble can't devise a mine plan that's profitable. Besides low-grade ore and water management issues, energy and workforce costs are very high. Compounding that, Anglo is in trouble: three CEOs in five years; looming nationalization and violence in its African mines; billions in cost overruns in Brazil; labor problems in Chile; a downgrade by S&P, and gold just took the worst two-day loss in 30 years.

For mine opponents, this is not good news. If Pebble decides to go into operation it will shave capital and operating costs to the bone. It will also sooner or later lobby for a new town and a publicly funded power plant and transmission line. It also means that as commodity prices continue falling, as they will, the possibility of abandonment becomes real.

The raw natural history data Pebble recently dumped told us nothing about risk, was meaningless and a waste of our time and its money. The timid EPA effort was similarly useless. And Keystone? Read its report about the OK Tedi mine disaster, and then read about the successful Australian civil action against the mine.

The risks are innumerable. Earthquake. Severe weather. Tailings dams fail. Pipelines rupture. Acid mine drainage is not always contained. Cyanide will be used. Mercury will be released from gold roasting and contaminate downwind streams. There will be accidents like a truckload of cyanide into a creek. There will be spills at the port. Culverts will be blocked. Mining is messy.

The benefits are singular. Jobs. Unlike Red Dog, Pebble is not contractually obligated to hire anyone. However many workers it might actually hire, does anyone believe Anglo will invest $6 billion to $7 billion and then hire inexperienced people? Workers, especially in the higher paying jobs, will come from out of state, management from outside the country. Twenty percent of Red Dog workers still come from out of state.

For a few temporary jobs many things are put at great risk including 50 percent of the world's sockeye salmon. Profits go to Vancouver and London. The copper goes to China. And the gold? According to Moody's, 80 percent of gold mined is used for jewelry, mostly in India and China. Trinkets. The inevitable impacts and clean-up costs? Alaska gets those.


Bruce C. Switzer is the former head of environmental affairs for Cominco Ltd. and an environmental and engineering consultant with experience throughout the United States and Canada. He also served as a consultant for Alaskans for Clean Water, a group that opposed the Pebble project.

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