After two large pensions funds urged London-based Rio Tinto to pull out of the controversial Pebble prospect, the company has put Canada's Northern Dynasty on notice that it will review its investment and may indeed back out.
That would be a blow for junior mining company Northern Dynasty Minerals, leaving it without a major company as a partner. Another large mining firm, Anglo American, pulled out of the project earlier this year, seeking lower-risk opportunities.
Rio Tinto owns about 19 percent of Northern Dynasty's shares. The Pebble prospect, a massive copper, gold and molybdenum play in the Bristol Bay region of Southwest Alaska, is Northern Dynasty's sole prospect.
A wide-ranging group of opponents -- including powerful lawmakers, conservation groups and Alaska Natives -- want the project stopped because they fear it could pollute key headwaters draining into the bay and destroy the region's valuable sockeye salmon fishery.
“As part of its review, Rio Tinto will consider the Pebble Project's fit with the group's strategy of investing in and operating long life and expandable assets, and with the strategy for its copper business, which is focused on its four producing assets (Kennecott Utah Copper, Oyu Tolgoi and its interests in Escondida and Grasberg), and two development projects, La Granja in Peru and Resolution in Arizona,” Rio Tinto said in a statement posted at its website.
Managers with pensions funds for the state of California and New York City recently urged Rio Tinto to divest. Their letters noted the huge hurdles Pebble faces, including public opposition and the possibility that the Environmental Protection Agency could at any time shut the effort down. The funds together are worth more than $500 million and hold “substantial” shares in Rio Tinto.
Contact Alex DeMarban at alex(at)alaskadispatch.com