TORONTO (miningweekly.com) – A new report examining the potential economic impact of the proposed Pebble copper, gold and molybdenum mine on the Alaskan and the US economies has found that the mine could support 15 000 American jobs and contribute more than $2.4-billion a year to the US gross domestic product (GDP).
The proposed mine, a joint venture project by London-based Anglo American and British Columbia's Northern Dynasty Minerals, is an “Aladdin’s cave” of resources that could be a significant driver of Alaska’s economic future.
"This study confirms the national importance of the mineral resources at Pebble, the development of which has the potential to increase US copper production by 20% over decades of production, while supplying America's manufacturing, construction and clean energy sectors with the raw materials they require,” Northern Dynasty president and CEO Ronald Thiessen said.
He added that, through significant capital investment, high-wage job creation, billions of dollars in government revenues and supply and service contracts, Pebble can benefit generations of Americans and Alaskans.
The report, conducted by IHS Global Insight, outlined economic benefits across three stages of project development: a five-year construction phase, followed by a 25-year initial production phase, and as many as three potential subsequent 20-year development phases.
The IHS report was based on a conceptual mine plan using an iteration of the ongoing engineering work undertaken by Pebble Limited Partnership (PLP). This work continues and no final project design had yet been selected or approved by the PLP.
In production, Pebble would be one of Alaska's largest private sector employers, supporting an average of nearly 2 900 jobs, including 915 direct operations jobs. Total direct employment at the proposed mine over the first 25 years of production would average 1 220 with an estimated 75% of the workforce to reside full-time in Alaska.
At average yearly salaries of $109 500, Pebble mineworkers were expected to be paid more than double the state average.
"Pebble can deliver some 3 000 high-wage jobs, more than $1-billion in annual operating expenses and hundreds of millions of dollars in annual tax payments to the State of Alaska, which is very significant to the state's economy," Thiessen said, noting that Pebble-related economic activity in Alaska would boost the state's GDP by more than 3% over 2011 levels.
But for the people and communities of Bristol Bay, Pebble would literally transform the regional economy – providing jobs and business opportunities where there are few and increasing the tax base of the Lake and Peninsula Borough by about 600%.
In the Bristol Bay region of south-west Alaska, where Pebble is located, employment opportunities are scarce, the cost of living is among the highest in the nation, and the population is declining as people move elsewhere to look for work.
According to the IHS report, of the 5 394 working-age residents living in the Bristol Bay region, just 63% worked in 2011 and only 35% were employed throughout the year.
Thiessen said mining created more value per area of land affected than virtually any other industry. “In the case of Pebble, you have a project that will occupy less than one-twentieth of 1% of the 40 000 square mile area that comprises the Bristol Bay region, and yet would significantly surpass the economic benefits generated by the world-class Bristol Bay sockeye salmon fishery,” he said.
However, not everybody sees the potential positive economic impact in a positive light.
Environmental objections to Pebble primarily revolve around the size of the project and the possible effects on the ecosystem, particularly the waterways that serve as runs for sockeye salmon during their spawning season. Salmon fishing is a vital economic prop in Alaska.
Concerned groups, including the Pebble project’s opponents, have requested the US Environmental Protection Agency (EPA) to investigate the Bristol Bay watershed under Section 404(c) of the US Clean Water Act. This grants the EPA the right to “restrict, prohibit, deny, or withdraw the use of an area as a disposal site for dredged or fill material if the discharge will have unacceptable adverse effects on municipal water supplies, shellfish beds and fishery areas, wildlife, or recreational areas”.
The EPA’s draft Bristol Bay watershed assessment was critical of the Pebble project, focusing on the threat to fisheries.
PLP responded by arguing that the EPA had rushed its drafting process and failed to take into account the environmental data supplied by the company – over 27 000 pages of analysis. PLP also criticised the EPA’s methodologies and use of a hypothetical mine to model its conclusions.
"Let me be absolutely clear – the Pebble Partnership is designing a project at Pebble that will fully protect and even potentially enhance Bristol Bay's commercial salmon fishery, as well as other subsistence and sport fisheries that thrive in the region. So the economic benefits that are projected for Pebble should only enhance the significant regional employment and economic benefits already provided by Bristol Bay fisheries,” Thiessen said.
The Pebble project proposes to construct a large openpit mine; an on-site milling facility; on-site storage for rock, ore and tailings; a port facility; an access road connecting the mine site to the port; on-site water supply for the mill; and to provide electrical power for the mine site.
In addition, the project plans to include an on-site 378 MW gas-fired turbine plant, a 138 km transportation corridor to Cook Inlet for road and pipeline rights of way and a new deep-water port at Cook Inlet.
The project’s key assets are the near-surface 4.1-billion-ton openpit-style Pebble West deposit and the deeper and higher-grade 3.4-billion-ton Pebble East deposit, which is amenable to underground bulk mining methods. The Pebble resources rank among the world’s most important accumulations of copper, gold and molybdenum.
Estimates show that the Pebble deposit comprises measured and indicated resources of 5.94-billion tons, grading 0.78% copper equivalent and containing 55-billion pounds of copper, 67-million ounces of gold and 3.3-billlion pounds of molybdenum.
The deposit also has 4.84-billion tons of inferred resources, grading 0.53% copper equivalent and containing 26-billion pounds of copper, 40-million ounces of gold and 2.3-billion pounds of molybdenum.
Capital expenditure on Pebble is expected to reach between $6-billion and $8-billion. Anglo American is required to fund $1.5-billion of the project costs to retain its 50% interest, taking the Pebble project through permitting and into construction.
Northern Dynasty does not expect to fund any further project expenditures during its development phase as Anglo completes its staged total investment of $1.5-billion.