Rio Tinto pulls out of polemic mine project

Cordova Times | Margaret Bauman

April 7, 2014
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Global mining giant Rio Tinto is bailing out of the controversial Pebble mine project in Southwest Alaska, and donating its 19.1 percent share in the project to two Alaska charities that support educational programs.

The international mining group said April 7 that a strategic review of Rio Tinto's interest in Northern Dynasty, the Canadian mining firm behind the Pebble project, concluded that the Pebble project does not fit with Rio Tinto's strategy.

"Rio Tinto has long and historic ties to Alaska and we continue to see Alaska as an attractive location for potential future investment," said Jean-Sebastien Jacques, Rio Tinto Copper chief executive. "By giving our shares to two respected Alaskan charities, we are ensuring that Alaskans will have a say in Pebble's future development and that any economic benefit supports Alaska's ability to attract investment that creates jobs."

In Vancouver, British Columbia, meanwhile, Ron Thiessen, president and chief executive officer of Northern Dynasty Minerals Ltd., acknowledged that Rio Tinto was divesting its shares in Northern Dynasty. Thiessen said Northern Dynasty looks forward to meeting with leadership of the Alaska Community Foundation and Bristol Bay Native Corp. Education Foundation "to learn how their ownership interest in Northern Dynasty and the Pebble Project can make the greatest possible contribution to the people and communities they serve."

"We too think it is a good opportunity for the organizations that have received this gift and hope it is beneficial to Alaskans," said Mike Heatwole, spokesperson for the Pebble Limited Partnership in Anchorage.

The Alaska Community Foundation previously served as the administrator for the Pebble Fund, millions of dollars donated by Northern Dynasty Minerals for The Pebble Fund for Sustainable Bristol Bay Fisheries and Communities. Projects funded ranged from food banks to safe drinking water and economic development.

The environmental watchdog organization Earthworks applauded Rio Tinto's decision to divest its stock in Northern Dynasty, noting that the U.S. Environmental Protection Agency's scientific assessment of large-scale mining impacts on the Bristol Bay watershed concluded that such mines would have adverse impacts on the world's largest sockeye salmon fishery.

"Rio Tinto's divestment from Pebble may not be the final mail in the coffin, but it's surely one of the last," said Earthwork's Bonnie Gestring.

Rio Tinto is the second major investor in the Pebble project, near the headwaters of the Bristol Bay watershed, to withdraw from the project. Last September Anglo American gave its 50 percent stake in the Pebble mine back to Northern Dynasty and took a multi-million dollar write down in the process.

Both Northern Dynasty and Anglo American had maintained that the massive copper, gold and molybdenum mine would be built and operated in harmony with the multi-million dollar commercial, sport and subsistence sockeye salmon fishery in Bristol Bay. A watershed assessment produced at length by the U.S. Environmental Protection Agency concluded, however, that such a mine project posed potential long-term adverse affects on the watershed environment, including a major loss of habitat and potential for pollution of the watershed.

Jason Metrokin, president and chief executive officer of the Bristol Bay Native Corp., said that Rio Tinto deserves credit for its willingness to reconsider its position in the Pebble project and its gift of Northern Dynasty stock to the BBNC Education Foundation and the Alaska Community Foundation. "This gift provides an example of what open discussion and relationship building between stakeholders with differing views can accomplish," Metrokin said. "However, BBNC's opposition to the proposed Pebble mine has not changed."

Anders Gustafson, executive director of the Renewable Resources Coalition, an Anchorage non-profit dedicated to saving Alaska's wild salmon and clean water, said that Rio Tinto's decision to divest itself of stock in the Pebble mine was good news, 
"but the devil is in the details. We will learn more as time goes on.

"I think it's interesting that they are donating their shares," said Gustafson. "I think it's good, but don't know what the unintended consequences of this are."

"When Anglo dropped Pebble, their stock prices went up and Northern Dynasty's stock prices went down," he said. "If you have bad news (in the stock market), you announce it on Friday night, and if you have good news, you announced it on Monday morning."

Meanwhile, Gustafson said, "this is going to be good for Bristol Bay businesses. Bristol Bay fish prices will go up. People will be ore willing to invest in their Bristol Bay business."

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Tagged with: salmon, rio tinto, pebble limited partnership, mining, alaska

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