TORONTO (miningweekly.com) – As summer turns to fall in Alaska, mining companies small and large are bringing their primary exploration and development campaigns to a close. They will have also been strengthening community relations and monitoring the environment in which they work. Formulation of plans and feasibility studies that strictly adhere to best environmental practice are, quite rightly, the norm.
That said, environmental scrutiny from various lobby groups, nongovernment organisations and government departments has never been more stringent. At times the debate can become heated.
This is certainly the case for the Pebble project being developed by the Pebble Limited Partnership (PLP) in south-west Alaska. Located near Lake Iliamna, around 200 miles south-west of Anchorage and near Bristol Bay and the Cook Inlet, the scale of the deposit is world class.
At a 0.30% copper-equivalent cut-off, measured and indicated resources stand at 5.94-billion tons, comprising 55-billion pounds copper (2.7-million tons copper), 67-million ounces gold and 3.3-billion pounds molybdenum. Inferred resources contain 26-billion pounds copper, 40-million ounces gold and 2.3-billion pounds molybdenum.
Exploratory work has been extensive and continues, PLP’s CEO John Shively told Mining Weekly Online.
PLP is a 50:50 joint venture between Northern Dynasty Minerals and Anglo-American. In total, capital expenditure on Pebble will reach $6-billion to $8-billion, he said.
“We have a large resource [and] will start with an openpit on the Pebble West zone, the focus for most of our resource drilling,” Shively said.
“We hope to get into permitting some time in 2013. We won’t try and permit the whole resource – our aim is to draw up a 20- to 25-year mine plan for a resource that could last from 75 to 100 years,” he added.
The operation will be based on a standard openpit template and use froth flotation. Concentrate is likely to be shipped as slurry in a pipeline, following an 86-mile road that will be built to connect the project with a captive port.
“If we have a slurry pipeline, we’ll also have a line to return the water once the concentrate is dewatered,” Shively said.
“The port will be built to receive handymax-size ships. We’ll also build a dewatering plant, concentrate storage facilities, a tank farm for fuel and housing for the workforce. It will be a fairly significant project,” he added.
PLP is keen to employ local people and utilise their skills.
“Around 1 000 to 1 200 jobs will be needed when operational. The example I like to use is the Red Dog mine [located in north-west Alaska, operated by Teck] where they’ve had over 50% local hire, with strong levels of native hiring,” Shively said.
Environmental objections to Pebble primarily revolve around the size of the project and the possible effects on the eco-system, particularly the waterways that serve as runs for sockeye salmon during their spawning season. Salmon fishing is a vital economic prop in Alaska.
The US Environmental Protection Agency (EPA) was requested by concerned groups, including the Pebble project’s opponents, 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, dwelling 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.
“Firstly, they didn’t consider any levels of mitigation. If [a miner] took the EPA’s mine plan to the government they’d laugh at you. They’d say ‘you don’t have a mine plan here, go away’. Secondly, the EPA came up with figures for salmon habitat destruction but we’ve no idea where these numbers have come from. They are way, way above the levels of impact we’d even considered,” Shively said.
“Then they came up with a conclusion about the impact on the fisheries without solid analysis for how they reached their conclusions,” he said. “It’s a mess.”
“[The EPA now has] to figure out what they’ll do with this report . . . whether or not [government] use it to make a determination, I don’t know. I think they might be less inclined to use it,” he added.
Other arguments against the mine centre on the threat of seismic disturbance and the fear of a resultant tailings dam failure.
“Alaska is a seismic area and there is a fault that runs near the prospect. But the most recent US Geological Survey report on the area said it was last active around 1.8-million years ago,” Shively said.
“[And] look at Chile; in 2010 they had an 8.8 magnitude earthquake and aftershocks. Their tailings facilities all held . . . the technology is available as is the understanding among engineers,” he said.
The Pebble project illustrates many of the dichotomies in modern mine development. To understand the effects their projects will have on wildlife, mining companies are rightly asked to accept the costs of delineating, modelling and monitoring how their presence could disturb the environment.
At the same time, it must also be recognised that mines and mining deliver valuable work and create vital revenue streams. This is major boon, particularly for Alaska’s rural regions.
Government agencies, both local and national, must, therefore, carefully weigh the positives and negatives of mining projects and carefully evaluate all available data.
Shively worries that Alaska’s enormous potential could become increasingly overlooked as major mining companies start to question whether economies of scale, which mitigate the time, effort and risk of investment, are possible in Alaska.
“Alaska is hugely underexplored area. There are several major mines in planning and under development . . . there’s a lot potential; I think the prospects are very good,” he said. “[But] you’ve got to wonder how expensive these projects are getting. People might not like the size of Pebble, but if you don’t have a large prospect, who would pay $120-million on environmental issues?”