Ron Thiessen, CEO of Northern Dynasty Minerals (NDM) quoted Mark Twain in a recent Compass (Nov. 29) to suggest that reports of Pebble's death are an exaggeration. While Pebble may not be dead, investors who may be tempted to resuscitate the beleaguered project might better heed another quote from Twain: "It is easier to stay out than get out." Getting out cost Anglo American hundreds of millions of dollars, and NDM is putting a glossy spin on that departure most likely to cloak its own desire to get out by selling out.
As if to convince potential partners of the inevitability of the mine, Mr. Thiessen echoed the claim often made by the Pebble Partnership that the deposit is on state land "in an area specifically designated for mineral exploration and development." Prospective partners may want to exercise due diligence and examine whether this claim is more spin than fact.
The Pebble deposit area is among several management units of state land in the Bristol Bay Area Plan that the Alaska Department of Natural Resources (DNR) has classified or co-classified with other uses as "mineral." However a "mineral" classification does not mean what Mr. Thiessen seems to suggest - that the land was set aside for mining as if to imply the state anticipates issuing permits to develop in these units.
This is a "misconception" that DNR specifically addresses on its web site: A "mineral" lands classification, according to DNR, is not an authorization for mineral development; and, development will only occur if an economic use exists, development is feasible, the proposed development is consistent with the area plan, and is authorized through state and/or federal permitting processes. It is an unfortunate and arguably premature use of the "mineral" classification by DNR that may lead to this confusion, but as DNR states, the classification simply means that mineral resources have been identified in the area. [http://dnr.alaska.gov/mlw/planning/areaplans/bristol/amend/pdf/BBAP_Misconceptions.pdf]
While it is true that mineral exploration is allowed in the Pebble area that is nothing special. Generally, all State lands may be explored for minerals regardless of classification.
A fact overlooked by Mr. Thiessen that a cautious investor might also want to consider is that some of the riverine portions of the Pebble claim area are specifically closed to mining. In 1984, well before Pebble exploration began, DNR Commissioner Esther Wunnicke approved Mineral Closing Order (MCO) 393. MCO 393 did thirty years ago what the state now criticizes EPA for considering today - preemptively prohibits mining on more than 214,000 acres of state land creating buffers around 64 salmon streams in Bristol Bay.
Included among these 64 streams are segments of Upper Talarik Creek, and the North and South forks of the Koktuli River that fall within the Pebble claim area. The state's own 1984 assessment creating the foundation for MCO 393 stated that "the propagation and production of salmon is a significant use of state lands in Bristol Bay" and concluded that mining would "create serious use conflicts in anadromous streams and jeopardize the overall productivity of anadromous streams in Bristol Bay, and ultimately, the economy of the Bristol Bay region and the livelihood of area residents." That assessment is no less true today.
So it is not correct to say or imply the state has designated the Pebble deposit for mineral development. Further, if NDM puts forward a mine plan that calls for the mining, dewatering, excavation or burying segments of the Koktuli River and Upper Talarik Creek covered by MCO 393 then it is likely Pebble cannot be developed -- unless DNR removes those river segments from this long-established protection for Bristol Bay. In that case the state will be placed in the awkward position of reneging on its often repeated promise not to sacrifice one resource for another.
So, potential partners and investors tempted to buy into the project should do so armed with another caveat of Twain: "When a man is buying a basket of strawberries it can profit him to know that the bottom half of it is rotten."
Tim Troll is executive director of the Bristol Bay Heritage Land Trust.