Pebble names First Quantum Minerals as new partner
First Quantum Minerals will buy in at $150 million over the next four years, during the permitting phase, and will have the option to become a 50 percent partner with Northern Dynasty for an additional $1.35 billion if the mine goes into production.
Early Monday, Pebble announced a new partner to help carry its mining project through at least the permitting phase. First Quantum Minerals is a Canadian-based company that currently operates seven mines and one copper smelter across six countries, including a large copper project in Panama.
“They just finished a project that is very similar to the Pebble project in Panama," said Pebble Limited Partnership CEO Tom Collier, pointing to welcomed experience First Quantum brings to PLP. "[Cobre Panama has] gotten very positive reviews from the industry in terms of the design of the project, its efficiency, the financial economics of it, and also the way in which they have related to the community that they have built the project in.”
First Quantum has agreed to buy in at $150 million, paid in four installments over the next four years. This, Collier said, will fund Pebble through the permitting phase.
“That’s the most important step for us," he said. "Then at the end of that option period, they can exercise the option for an additional $1.35 billion, and if they pay that money, they will be a 50 percent owner of Pebble Partnership, along with Northern Dynasty.”
Anglo American was the other half of Northern Dynasty's Pebble Limited Partnership until Anglo abruptly backed out in 2013. Prior to that, Anglo had put more than $500 million towards exploration and the environmental baseline study. Its departure was nearly a death blow for the controversial copper and gold project: the EPA under President Obama was finishing Clean Water Act restrictions to block Pebble preemptively, Northern Dynasty's stock price plummeted, and the company just about ran out of money to fight any battles. Almost all exploration work at the site northwest of Iliamna stopped for three years.
The situation turned around in 2017, in large part due to a new EPA under President Trump. Pebble and EPA settled a lawsuit to allow a normal permitting process, new investments brought in millions of dollars, the company unveiled a smaller mine design, and now named a new partner.
“We have every confidence that Pebble can be developed safely and in a manner that protects and coexists with the important fishery resources," First Quantum president and CEO Philip Pascall said in a conference call with investors Monday morning.
Having been in talks with Pebble for about a year, he acknowledged the many hurdles he knows lie ahead. But Pebble is on the right track, Pascall said, and the U.S. has a solid permitting regime.
"This smaller development plan, with enhanced environmental safeguards that Pebble is preparing to take into permitting, should go a long way to demonstrating the project’s merits," he said. "We also believe that the NEPA, that’s the National Environmental Policy Act, permitting process, will provide objective and scientific validation that Pebble can meet the rigorous environmental standards."
Reaction from Pebble's opponents was swift. In a joint statement, the Bristol Bay Native Association, Bristol Bay Native Corporation, Bristol Bay Economic Corporation, 15 local tribal councils, and Alaska House Speaker Bryce Edgmon (D-Dillingham) said the "regional leadership remains united in opposition to mining at Bristol Bay's headwaters."
"The EPA and other agencies have studied our region extensively and the conclusion is clear: Bristol Bay’s wild salmon fisheries warrant special protections. It is disappointing that another mining company would join Northern Dynasty in its ongoing effort to fight scientific fact and the will of Bristol Bay’s people," wrote Ralph Anderson, president and CEO of BBNA.
The opposition is building, said Mark Niver, a Bristol Bay drift permit fisherman from Wasilla.
“We’ve really shouldered together, I mean everybody within the fishing industry in particular, just to say, ‘Hey, this fishery is way too great to risk anything at all.'"
Niver also works on the North Slope and is not anti-development, but believes Pebble presents an unreasonable risk to uniquely healthy salmon habitat.
"And these are Canadian companies, and Canadians seem to have kind of thrown their hands away from salmon. I mean, they’ve ruined their Fraser River fishery, and for them to want to pool their money together and try to come over and do the same in Alaska, I say, ‘huh uh.’”
Not all leadership in the Bristol Bay region weighs in on each development of the Pebble saga. The deposit sits on state lands inside the Lake and Peninsula Borough, which keeps a neutral position on account of its own permitting process.
Others cheered the announcement Monday.
"Finally, Pebble was able to find a partner, which allows them to file for their permits. This is good news because now everyone will be able to commit on actual plans, not speculations," said Lisa Reimers, the CEO of Iliamna Development Corporation and a board member of Iliamna Natives Limited. Reimers is not for or against Pebble, but said she trusts the permitting process and believes the next phase will bring needed work and jobs to Bristol Bay.
In settling with EPA and naming a new partner, Pebble has now crossed off two of its three stated goals for 2017. The third is actually filing for permits; First Quantum's Pascall, in his call with investors Monday morning, said he believed that would happen in the next several days.