USA: Rio Tinto next to pull out of proposed Pebble MinePublished by MAC on 2014-04-09
Source: Statements, Mining.com, Anchorage Daily News (2014-04-07)
Rio Tinto has joined its major rival Anglo American in withdrawing from Northern Dynasty's controversial Pebble copper-gold project. In doing so it has donated its stake to two local NGOs.
This is not the first time that a major mining company has shown "charity" to local organisations opposed to a mining project.
In 2006, BHP (now BHP Billiton) cancelled the outstanding US$ 8 million mortgage owed by two North American tribes, on property owned by its subsidiaries, Nicolet Mining.
Three years earlier, the tribes with the assistance of the Wisconsin state, had purchased mineral-rich land on the Crandon mine site, offered them by BHP Billiton after a major struggle by a coalition of native Americans, hunters, fisherfolk and land owners.
But the mortgage still remained to be paid - it was written-off by BHP as a gesture of support to the tribes and in acknowlegment of that opposition. (See: BHPBilliton: earning praise - and condemnation)
But the question must be what are the Alaskan NGOs supposed to do with the shares? Hold them, and try to pressure management to drop the project? Sell them quick before they're worthless? Or, ideally, barter with management to give the shares back to the company in exchange for handing over the property to them?
In a Mineweb article on 8 April, Dorothy Kosich, explores these questions. See asks:
"What happens if the massive Pebble Project copper/gold project near Bristol Bay in southwest Alaska never becomes a mine? Will the Alaska Community Foundation and the Bristol Bay Native Corporation Education Foundation never see a dime from Rio Tinto's largess?"
She continues ... "Or, with the voting power offered by owning a 19% stake in Northern Dynasty, the two Alaskan charitable foundations could make life even more difficult for Northern Dynasty and the future of the Pebble project ... If the foundations choose to support Northern Dynasty and Pebble, they could find themselves targeted by billionaire Bob Gillam and his fellow Wharton School alumni gang, now top executives in several U.S. corporations, who together have funded a significant portion of the now international anti-Pebble Movement campaign."
Rio Tinto walks away from massive Pebble copper-gold project
7 April 2014
Opponents to the project had long argued it could jeopardize the pristine environment of U.S. biggest salmon fishery.
Global miner Rio Tinto said on Monday it is pulling out of the polemic Pebble Mine copper and gold project in the Bristol Bay region of Alaska, by giving away its 19.1% percent stake in Northern Dynasty Minerals, the owner of the huge deposit.
The company said the project does not fit its strategy, so it will donate its shares to two Alaskan charities. This way Rio becomes the second large diversified miner to back out of the project in less than seven months.
Anglo American left the project last September, handing its 50% stake in the project back to Northern Dynasty and taking a $300 million write down in the process. Rio itself took a $130 million write down on the asset in its 2013 results.
Environmentalists across the world praised Rio's decision. Washington, DC-based watchdog Earthworks also applauded the giant miner for respecting locals' wishes.
"Rio Tinto's divestment from Pebble may not be the final nail in the coffin, but it's surely one of the last," the group said in a statement. "With Rio Tinto's departure...there is now no mining company behind Pebble that has actually mined anything," it added.
The project has faced increased scrutiny from environmental campaign groups and the U.S. Environmental Protection Agency (EPA) regarding its potential risk to salmon fisheries. Northern Dynasty and Anglo previously said that the project could be built without harming Alaska's salmon fishing industry.
In February, EPA initiated a rarely used process under the Clean Water Act that would block development of the copper-gold deposit, one of the largest in the world, citing the potential of "irreversible harm" to the state's salmon fishery.
Half of Rio's shares will go to the Alaska Community Foundation and the other half will go to the Bristol Bay Native Corporation Education Foundation, the company said.
"We look forward to meeting with the leadership of the Alaska Community Foundation and Bristol Bay Native Corporation Education Foundation in the days ahead to better understand their long-term goals and aspirations, and how their ownership interest in Northern Dynasty and the Pebble Project can make the greatest possible contribution to the people and communities they serve," said Northern Dynasty after Rio's announcement.
Pebble mine would have become the largest open pit copper and gold mine in the world, but its opponents claimed it would have generated tons of potentially dangerous waste material.
The Pebble deposit holds an estimated 55 billion pounds of copper and 67 million ounces of gold.
Shares in Northern Dynasty crashed on the news. The stock was 3.85% in Toronto this morning at 11:20 am ET.
Earthworks applauds Rio Tinto's withdrawal from Pebble Mine proposal in Alaska's Bristol Bay
Earthworks Press Release
7 April 2014
Statement from Earthworks' Bonnie Gestring
"Earthworks applauds Rio Tinto's decision to withdraw from the Pebble Mine proposal that threatens Alaska's Bristol Bay watershed, home to the world's largest wild sockeye salmon fishery.
We also applaud their recognition that "Alaskans should have a say in Pebble's future development".
And Alaskans have had their say: they overwhelmingly oppose the mine. 98% of comments from Bristol Bay residents oppose the Pebble Mine proposal. That's largely because, as the U.S. Environmental Protection Agency's peer reviewed scientific assessment of large scale mining's impacts on the watershed showed, the Pebble Mine would destroy 94 miles of salmon streams, and threaten the $480 million/year salmon fishery and the 14,000+ jobs that depend upon it.
With Rio Tinto's departure following close upon Anglo American's withdrawal last year, there is currently no major funder backing the Pebble mine proposal. Perhaps more importantly, there is now no mining company behind Pebble that has actually mined anything.
Rio Tinto's divestment from Pebble may not be the final nail in the coffin, but it's surely one of the last".
Earthworks is dedicated to protecting communities and the environment from the impacts of irresponsible mineral and energy development while seeking sustainable solutions.
Bonnie Gestring, 406-549-7361,
Alan Septoff, 202-887-1872x105
Rio Tinto gifts stake in Northern Dynasty Minerals to Alaskan charities
7 April 2014
Rio Tinto will gift its 19.1 per cent shareholding in Northern Dynasty Minerals Ltd (Northern Dynasty), owner of the Pebble Project, to two local Alaskan charitable foundations. The decision follows the strategic review announced last year of Rio Tinto's interest in Northern Dynasty which concluded the Pebble Project does not fit with Rio Tinto's strategy.
The shares in Northern Dynasty will be divided equally between the Alaska Community Foundation to fund educational and vocational training and the Bristol Bay Native Corporation Education Foundation, which supports educational and cultural programmes in the region.
Rio Tinto Copper chief executive Jean-Sebastien Jacques said "Rio Tinto has long and historic ties to Alaska and we continue to see Alaska as an attractive location for potential future investment. 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."
About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and New York Stock Exchange listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.
Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, thermal and metallurgical coal, uranium, gold, industrial minerals (borax, titanium dioxide and salt) and iron ore. Activities span the world and are strongly represented in Australia and North America with significant businesses in Asia, Europe, Africa and South America.
About Alaska Community Foundation and the Bristol Bay Native Corporation Education Foundation
The Alaska Community Foundation is a state-wide philanthropy organisation established in 1995 that is focused on strengthening Alaska's communities. The Alaska Community Foundation will use the gift of shares to create a new Vocational Fund for Alaska's Future which will support programmes that provide vocational training and skills development needed in the mining and extractive industries. The Bristol Bay Native Corporation Education Foundation, established in 1986, is a Native Alaskan charitable organisation that supports education and cultural programmes for Bristol Bay native youth. Both organisations have independent boards of directors and mandates to manage assets for the benefit of future generations.
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In latest blow to Pebble prospect, mining giant Rio Tinto is pulling out
By Sean Cockerham
Anchorage Daily News
7 April 2014
WASHINGTON - Global mining giant Rio Tinto is pulling out of the Pebble mine project in Alaska, the latest blow to the controversial plan to build an open pit mine in the best wild salmon stronghold in the world.
Rio Tinto said Monday that it will donate its share in the project to a pair of Alaskan non-profits, the Alaska Community Foundation and the Bristol Bay Native Corp. Education Foundation.
Rio Tinto's decision comes after the Environmental Protection Agency moved closer in recent weeks to blocking the mine. EPA Administrator Gina McCarthy said Pebble would "likely have significant and irreversible negative impacts on the salmon of Bristol Bay." She said her agency would decide on action to protect the salmon under the Clean Water Act, which could lead to a veto of the project.
The British mining powerhouse Anglo American pulled out of the Pebble project last year. Now Rio Tinto is abandoning the effort as well, saying Monday "the Pebble Project does not fit with Rio Tinto's strategy."
"By giving our shares to two respected Alaskan charities, we are ensuring that Alaskans will have a say in Pebble's future development," said Rio Tinto Copper Chief Executive Jean-Sebastien Jacques.
The charitable foundations will each receive half of Rio Tinto's 19 percent share in Northern Dynasty Minerals, the Canadian company whose principal asset is Pebble.
The Bristol Bay Native Corp. Education Foundation said "Rio Tinto's gift will benefit organizations that serve the people and communities of Alaska."
Executive Director Greta Goto said the shares would help the foundation to support educational opportunities for shareholders in the Bristol Bay Native Corp, which represents the interests of Alaska Natives from the area around the proposed mine.
The Bristol Bay Native Corp., though, has been among the fiercest opponents of the Pebble mine. It now suddenly has a stake in the project's success.
Corporation officials said in an interview that the education foundation is managed separately from the corporation as a whole and has its own distinct mission.
"This gift provides an example of what open discussion and relationship building between stakeholders with differing views can accomplish," said Bristol Bay Native Corp. President Jason Metrokin. "However, BBNC's opposition to the proposed Pebble mine has not changed."
The Alaska Community Foundation said its shares would go to create a new fund for supporting vocational education programs, with a focus on building worker skills for resource development industries.
Foundation CEO Candace Winkler said the foundation first heard from Rio Tinto about a week ago. She said she is excited about the possibilities, regardless of the controversy over the mine.
"We understand this is a complex issue and that people have strong feelings on both sides," she said. "We looked it as an opportunity to be involved in workforce development."
It's not clear how much the shares will be worth. Northern Dynasty's stock value has faltered with the continual problems experienced by the Pebble project. The stock fell another 5 percent on Monday at the news that Rio Tinto was pulling out of the project.
Rio Tinto's decision came under pressure from major investors, including the pension funds of California and New York City. Rio Tinto was risking its reputation with involvement in the Pebble mine, the chief financial officers who oversee those pension funds told the company in a December letter.
The Natural Resources Defense Council hailed Rio Tinto's move as a big step toward the end of the project.
"Rio Tinto's decision is the latest demonstration that the Pebble Mine is economically and environmentally infeasible, even for the largest mining companies in the world," said Joel Reynolds, the western director for the environmental group.
Gov. Sean Parnell, in a written statement, criticized the EPA.
"It's disheartening to see a company like Rio Tinto take its business elsewhere as a result of the current federal regulatory environment," Parnell said.
Pebble ranks among the largest undeveloped copper deposits in the world and Northern Dynasty Minerals is vowing to push on despite all the problems.
Last year's pullout of Anglo American was an especially big blow, leaving Northern Dynasty without the necessary financial backing to construct the mine.
Northern Dynasty is searching for a new partner, and said it will work with the two Alaska foundations that are now major shareholders in one of the most controversial development projects in the history of the state.
Northern Dynasty President Ron Thiessen said his company had previously worked with the Alaska Community Foundation on the Pebble Fund, a grant program for organizations in the Bristol Bay region.
"We look forward to meeting with the leadership of the Alaska Community Foundation and Bristol Bay Native Corp. Education Foundation in the days ahead to better understand their long-term goals and aspirations, and how their ownership interest in Northern Dynasty and the Pebble Project can make the greatest possible contribution to the people and communities they serve," Thiessen said in a written statement.
Email: scockerham[at]mcclatchydc.com; Twitter: @seancockerham.