CEO unveils Pebble 2.0

  • Pebble Limited Partnership CEO Tom Collier unveiled a scaled-down plan for the mine at a meeting of the Resource Development Council of Alaska on Thursday, Oct. 5, 2017, in Anchorage, Alaska. (Photo/Elwood Brehmer/AJOC)

Pebble Limited Partnership has finally done one of the things it has long been criticized for not doing: the company released an actual mine plan.

CEO Tom Collier discussed the major points of the plan Oct. 5 at a Resource Development Council for Alaska meeting in Anchorage.

Long a topic of ample speculation, Collier said the mine plan the company plans to submit for environmental review to the U.S. Army Corps of Engineers in December has a footprint that is 60 percent smaller than the concept the Environmental Protection Agency used to determine Pebble’s prospective impacts in the 2014 Bristol Bay Watershed Assessment.

He noted that the 1,000-plus page assessment, which Pebble contends was a biased document from its genesis aimed at stopping the project, determined a much smaller mine could pass permitting muster.

Pebble’s plan is for a mine pit, waste rock and tailings storage facility to cover 5.4 square miles, which Collier described as “in the ballpark” of the 4.2 square mile project the EPA then deemed acceptable.

The EPA used a concept operation covering 13.5 square miles when it concluded in the Bristol Bay Watershed Assessment that what was believed to be the company’s plan was unacceptable.

In May, the company settled a lawsuit it filed in 2014 against the EPA over the process behind the watershed assessment and the agency’s subsequent proposal to preemptively prohibit the project, which put intense criticism on the Trump administration by Pebble’s opponents.

However, Collier said the company also had a deal with the Obama administration that fell apart.

“Few people know this — we actually negotiated a settlement with the Obama team before they left the White House and at the very last minute the administrator of the EPA (Gina McCarthy) refused to sign the document that we’d been told for a week had been approved,” he revealed.

The EPA is currently taking public comments on whether it should reverse the process started in 2014 to ban a large mine in the Bristol Bay region, despite the fact that as a condition of the Pebble settlement the assessment remains valid and on which the Pebble “veto” was based.

In late 2014, Alaska U.S. District Court Judge H. Russel Holland issued an injunction stopping the EPA from completing the Pebble veto until that suit was resolved.

Three-quarters of Pebble’s proposed footprint would be the tailings storage facility.

Shrinking the size of the project allowed Pebble to move it out of the Upper Talarik Creek drainage that feeds Iliamna Lake and the Kvichak River. The Kvichak River has one of the two largest sockeye returns in Bristol Bay most years.

The smaller mine plan also eliminates waste rock piles, as the company will start mining where the copper and gold ore is closest to the surface, according to Collier.

Waste rock that is removed will be used in the tailings dam.

Additionally, Collier said Pebble acquiesced to opponents over one of their biggest concerns with the project and will not be leaching gold out of the ore. The secondary recovery process would otherwise recover about 15 percent of the available gold, he said.

“We’re going to leave that 15 percent of gold in the rock at the mine site and there won’t be any cyanide at Pebble,” Collier said.

A redesigned tailings facility with improved buttresses and a more gradual slope increases protection against earthquakes, according to Collier.

He said the tailings dam would be built to withstand ground acceleration more than twice what the U.S. Geological Survey believes there is a 2 percent chance to exceed every 50 years at the project site. He also noted the nearest fault line — the Lake Clark fault northwest of the project site — has not been active since the last ice age.

“We believe that our mine has been designed to withstand the greatest possible seismicity predicted by science, period,” Collier asserted.

Tailings with acid generating potential would be stored in a separate, lined containment facility.

Leading up the expected release of Pebble’s new plan, many mine opponents, including state House Speaker Rep. Bryce Edgmon, D-Dillingham, who represents the Bristol Bay region, said there is nothing Pebble can do to change their minds about the project they feel will unnecessarily put the region’s world-class salmon fisheries — and the jobs linked to those fisheries — at risk.

Alannah Hurley, executive director of United Tribes of Bristol Bay, an organization that has been at the forefront of the fight against Pebble, said the revised vision for the mine was met with skepticism from Bristol Bay tribes in a release from the group and would still be one of the world’s largest mines.

“This is just a wolf in sheep’s clothing. For more than a decade, the Pebble Limited Partnership has tried to convince Alaskans that it should build a mine in Bristol Bay, at the headwaters of the world’s last great salmon runs,” Hurley said. “In that time, opposition has only increased, and Bristol Bay has been crystal clear on its feelings towards Pebble.”

If the worst were to happen and the tailings dam failed — a scenario Collier said many inside Pebble did not want him to discuss — the smaller project would now impact only the North Fork of the Koktuli River, he said, as it is no longer in the Upper Talarik drainage.

He added that based on the Bristol Bay Watershed Assessment, about 20 miles of the North Fork of the Koktuli would be severely damaged for about a decade from turbidity in the water. After that the river would eventually return to being viable fish habitat. The North Fork of the Koktuli, which feeds the Mulchatna River and eventually the famed Nushagak River, produces approximately 0.02 percent of the sockeye salmon that return to Bristol Bay each year, according to Pebble.

“I can’t tell you how many times I’ve spoken to people and asked them why are they against the Pebble project and the answer they tell me is that if we have an accident we’ll kill all the fish in Bristol Bay,” Collier said. “The Obama administration EPA says we’re only going to kill two one-hundredths of one percent if we have a catastrophic incident that we don’t think is even possible to have.”

Finally, Pebble has scrapped plans for a road around giant Iliamna Lake in favor of employing an ice-breaking ferry to traverse the lake to supply the mine via a shorter road from a new port that would be built on Cook Inlet near Augustine Island. Cutting out miles of roads removes much of the project’s impacts to wetlands, Collier said.

The EPA’s Pebble concept had 86 miles of new roads; the new plan needs 42 miles, according to the company.

“Is this project worth building given all the other benefits, given all the risks of it? Damn straight it is and these numbers I think show that,” he said.

He continued: “The key, though, is that all this stuff I talked to you about today has to go into the environmental impact statement process and it will be tested. And if the calculations we’ve done are correct we’re going to get a permit. If they’re not correct, if they’re not reliable, we’ll have to change them; we’re going to have to modify our proposal so that it will be correct.

“We’re not going to build a project that’s going to damage that fishery. We’re not going to build a project that’s going to have significant environmental damage to that region. But we’re confident that we can build the one that we’re talking about now without any of those consequences and we’re going to move it forward aggressively.”

Gov. Bill Walker said that he doesn’t have enough information on Pebble’s new plan to support it in a recent interview with Alaska Public Radio.

In an Oct. 6 prepared response to Walker’s comments, Collier said Walker’s hesitancy towards the project is appropriate at this point. Walker “should be skeptical; ask hard questions; and allow the permitting agencies to do their work,” Collier said.

The governor said during his 2014 campaign that he was against the — at that point — large mine concept because of the potential impacts it could have on Bristol Bay fisheries, but also criticized the EPA for its move to preemptively prohibit the project because of the fear it could apply the same process to other projects in the state.

Collier said in an interview following his talk that the company doesn’t have plans now to expand the project beyond the current proposal if it reaches production but noted any expansion would trigger another scrupulous environmental review.

Pebble’s owner company, Northern Dynasty Minerals has indicated in recent investor presentations that it estimates the Pebble deposit holds up to 1.9 percent of all the gold ever mined in recorded history.

“It’s not like since you’ve done phase one you get a leg up at all. You start all over, from scratch, new permit,” Collier said of expanding the mine. “And the key to that new permit is it’s going to look at whether the two together are too big and if it’s too big then it’s not going to get a permit but that doesn’t affect the first one. The first one stands on its own. If it works, it works and then if we propose a second one and it’s concluded that’s too big, it’s too much for the region then it doesn’t get built but that’s tomorrow’s question.”

He also said that while Pebble and Northern Dynasty leaders previously said the parent company needs to secure a second investor in the project before starting what is expected to be a $150 million environmental impact statement, or EIS, process, that isn’t necessarily the case any longer.

But he also said during his presentation that Northern Dynasty should announce a partner on Pebble by the end of the year — the time by which it will be known if Pebble makes good in its statements to formally apply for permits this go-round.

Sharing the project

The benefits of the mine start with jobs and could end with direct revenue payments to local residents based on the programs Pebble is proposing.

Collier acknowledged that “Pebble’s got a credibility problem,” which in part stems from numerous claims not coming to fruition over a decade that the company would advance the project.

Further, he noted that because the project is on state land there is no established way for Alaska Native residents in the region to benefit from it as have Natives closer to other mines in the state on Native corporation land.

As a result, Pebble is suggesting it could set up a corporation to hold 5 percent of the project and distribute that revenue to the five area Native village corporations and nearby residents.

Based on the company’s projections, such a setup would directly pay each of the village corporations about $500,000 and each resident, assuming about 5,000 people signed up, about $500 annually.

Pebble would also bring excess power to a region that has exorbitant electricity prices — upwards of 80 cents per kilowatt-hour, Collier said.

The company is in discussions with some of the large regional Native corporations in the state about owning the prospective power plant and other infrastructure related to the project, he added.

“We’ll need to work with the state; we’ll need to work with the villages on how we wheel that power from the mine site to the region but that’s our clear intention,” Collier said.

Pebble is also investigating ways it could benefit the Bristol Bay commercial sockeye fishery, he continued.

“We’d like to do something with some of the revenue that this mine generates that would be seen as us showing that we’re good neighbors to that fishery. We don’t buy the dichotomy that you have to choose between the fishery and the mine. We think they can both coexist,” Collier said.

The company is pursuing a crop insurance-like concept to mitigate the economic volatility in fishery. Collier described a plan that would pay fishing permit holders in years when the average vessel revenue fleet-wide dropped below a certain point.

“When I first looked at this the numbers were daunting but when I went back and looked at it perhaps only for the fishermen from Bristol Bay that hold permits or perhaps only the Alaskan permit holders, the numbers are not quite so daunting,” he said.

He also suggested a permit buyback program for Outsiders that hold permits as a way to get more ownership of the fishery back to the region.

“We haven’t decided what we’re going to do yet but we have decided we’re going to do something,” Collier said, adding Pebble has economists running numbers while discussing the possibilities with fishermen.

Hurley dismissed the revenue sharing concepts as more attempts to purchase support for the project, saying the salmon fishery will sustain the region longer than the life of any mine.

In hard numbers, even the smaller project would bring about 2,000 jobs over the projected 20-year life of the mine to the region, according to the company’s figures.

It would add about $20 million to the Lake and Peninsula Borough’s annual revenue and pay the state between $49 million and $66 million per year, Pebble estimates.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

Updated: 
10/12/2017 - 9:40am

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