Pebble Mine Project Hits Another Snag; Company Pulls Out


Opponents of the Pebble Mine saw another company back out of the proposed project, which has seen past companies enter and then withdraw its commitment to mining the Bristol Bay area. First Quantum Minerals Ltd., which had teamed up with primary backer Northern Dynasty Minerals to form the Pebble Partnership, announced it was splitting away from the project.

Here’s Northern Dynasty’s statement announcing the termination of a deal with First Quantum:

Northern Dynasty Minerals Ltd. (TSX: NDM; NYSE American: NAK) (“Northern Dynasty” or the “Company”) advises that Northern Dynasty and First Quantum Minerals Ltd. (“First
Quantum”) (TSX: FM) have been unable to reach agreement on the option and partnership transaction contemplated in the December 15, 2017 framework agreement (the “Framework Agreement”) between the parties. As such, the Framework Agreement has been terminated in accordance with its terms.

Here’s Bloomberg with more on  the financial effect on Northern Dynasty as news broke in the last few hours:

Northern Dynasty Minerals Ltd. plummeted Friday after the collapse of a pact with First Quantum Minerals Ltd. to finance the controversial Pebble mining project in Alaska.

The two companies were unable to reach an agreement on a proposed deal disclosed in December, Northern Dynasty said Friday in a statement. The arrangement would have given a unit of First Quantum an option to earn a 50 percent interest in Pebble in return for $150 million paid over four years to fund permitting.

The project at one of the largest copper and gold deposits has been fraught for years. Effectively banned by the U.S. Environmental Protection Agency under President Barack Obama, shares of Northern Dynasty surged after Donald Trump’s election victory. The shares climbed further in January 2017 during nomination hearings for Scott Pruitt, a climate-change skeptic, to become head of the EPA. …

The environmental group Earthworks also applauded First Quantum’s decision.

Northern Dynasty dropped as much as 37 percent Friday in New York, and traded down 25 percent at 53 cents as of 11:02 a.m. First Quantum fell 3.7 percent to C$20.03 in Toronto.

Here’s some reaction to the news:

From NRDC, which featured the headline:

First Quantum Minerals Makes the Right Call, Backs Away from Pebble Mine

The fourth major investor to pull out from the massive open-pit mine—which would cause irreparable damage to Alaska’s ecologically sensitive Bristol Bay watershed—First Quantum made its decision just weeks after a delegation of community leaders from the Bristol Bay region, alongside environmental groups like NRDC, attended First Quantum’s annual shareholders’ meeting, arguing strongly against pursuing the project. “It’s the wrong project in the wrong place,” Reynolds says, “and today’s announcement is the latest proof that it’s a bad investment—financially, environmentally, and socially.”

Not only is Bristol Bay one of our most pristine wild places, it also provides half the world’s supply of sockeye salmon and is home to sensitive species like bears, eagles, and wolves. The region also supports 14,000 jobs and generates $1.5 billion in economic activity each year.

“There is no more widely condemned project anywhere in the world today, and now it’s time for Northern Dynasty to walk away,” Reynolds says. “Bristol Bay is a national treasure whose invaluable fisheries resources must be protected and sustained forever.”

Here’s a statement from environmental group Earthworks’  Northwest Program Director Bonnie Gestring:

“It is great news that First Quantum decided to forgo their investment in the proposed Pebble mine in Alaska’s Bristol Bay. First Quantum is the latest in a string of investors to recognize that it’s a bad idea to put North America’s largest open pit mine in the spawning grounds of the world’s largest remaining wild sockeye salmon fishery.

It is to First Quantum’s credit, and good news for First Quantum shareholders, that their leadership listened to Pebble’s overwhelming opposition including Alaska Natives, commercial and recreational fisherman, jewelers, churches, among others.

First Quantum’s decision, following similar decisions by Rio Tinto and Anglo American, serves to reinforce Environmental Protection Agency Administrator Scott Pruitt’s statement that ‘any mining projects in the region likely pose a risk to the abundant natural resources that exist there’. We hope First Quantum’s decision convinces EPA to follow through on its initial plan to protect the Bristol Bay watershed from industrial scale mining.”

Some more reaction on Twitter: