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Business/Economy

Pebble mine developer launches plan to share profits with local residents

The developer of the controversial proposed Pebble mine in Southwest Alaska launched a profit-sharing plan for residents from the Bristol Bay region on Tuesday, drawing condemnation from an Alaska Native corporation opposed to the project.

The Pebble Performance Dividend will share 3% of the net profits from the copper, gold and molybdenum mine, Pebble Limited Partnership said in a statement on Tuesday.

The mine won’t make a profit during its initial years of construction, but Pebble pledged to provide $3 million annually during that period to ensure a dividend. Under that plan, if 3,000 residents applied for the program, each would receive $1,000 once construction starts, the company said.

“Developing a mine at Pebble will provide jobs, economic activity, local tax revenue and infrastructure,” said Tom Collier, Pebble chief executive.

The program will provide one more way local residents can benefit, he said.

The U.S. Army Corps of Engineers could permit the Pebble mine this summer. If permitted, the open-pit mine would be about 200 miles southwest of Anchorage, near salmon-producing headwaters of the valuable Bristol Bay fishery.

Daniel Cheyette, a vice president with the Bristol Bay Native Corporation, said the dividend program is an attempt to win support in a region that has rejected the project.

“This is an effort by PLP to try and gain a social license that it has never been able to gain," Cheyette said.

Cheyette said about 7,500 people live in the Bristol Bay region. Many of those are shareholders with the Native corporation. About 80% of the corporation’s roughly 10,000 shareholders oppose the project, Cheyette said.

The regional Native corporation’s board unanimously rejected an offer from Pebble Limited to administer the dividend program, he said. Doing so would not have been in line with shareholder values, he said.

It’s unlikely Pebble will win friends even with the dividend program, he said. The Native corporation does not believe Pebble’s plan is profitable.

“Three percent of nothing is still nothing,” Cheyette said.

Pebble is not aware of a similar dividend program in Alaska, said Mike Heatwole, a Pebble spokesman. Alaska Native corporations share profits with each other and with shareholders, but those were created by Congress and have unique responsibilities to shareholders.

Starting Tuesday, year-round Bristol Bay residents must register for the program at pebbledividend.com to qualify, the company said. The company will choose five recipients to receive an early dividend by July 31, it said. Registration will end Aug. 31.

Collier said the company committed to the program in 2017 before it applied for a permit to build the mine.

"Whether a resident supports the project, opposes it, or is neutral, anyone who is a year-round resident can participate,” Collier said.

An advisory board comprised of residents from the region, Alaska Native leader Willie Hensley and former Pebble chief executive John Shively will determine residency and other details of the program.

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