Major mining company throws in with Pebble

Major mining company throws in with Pebble

By ELIZABETH BLUEMINK , Anchorage Daily News

31st July 2007

One of the world's largest mining companies announced today it is making an investment of up to $1.425 billion in Alaska's massive Pebble prospect.

The controversial Pebble copper-and-gold deposit near Iliamna in Southwest Alaska will have a new management team, composed of executives from London-based mining giant Anglo American and Northern Dynasty Minerals Ltd., the company that owns the project.

The two companies said they will create a new company to explore and develop Pebble.

They signed their 50-50 partnership agreement today after they notified regulators.

Northern Dynasty said it stopped trading of its stock on the Canadian and U.S. stock exchanges at mid afternoon in anticipation of signing the deal.

The agreement is the first major step in developing a mine at Pebble, said Northern Dynasty's chief operating officer Bruce Jenkins.

The deal was reached after the Vancouver, British Columbia-based company went through more than a year of confidential negotiations with roughly 15 other major mining companies, Jenkins said.

In the agreement, Anglo has committed to spend $125 million to finish a pre-feasibility study for the mine, targeted for the end of next year.

To retain its 50 percent partnership, Anglo will then have to commit $325 million for a feasibility study, targeted for 2011. If a decision then is made to develop a mine, Anglo must commit $975 million to build it.

If built, Pebble could become one of the largest copper mines in the world, Pebble's proponents say.

The Pebble deposit is the target of a major campaign from Bristol Bay commercial fishermen, Iliamna-area sport-fishing groups and lodges, and some residents of the region.

They contend that developing the huge deposit into a mine could lead to an environmental disaster for a region rich in fish and subsistence foods. Northern Dynasty and its supporters, including other residents of the region, respond that blocking development is premature because any decision to build a mine there is years away. Northern Dynasty says it would build an environmentally sound mine.

Find Elizabeth Bluemink online at ebluemink@adn.com or call 257-4317.

© Copyright 2007, The Anchorage Daily News, a subsidiary of The McClatchy Company