Anglo American’s Pebble Mine
Poses High Risks for Investors
Viability of Pebble mine project questioned by Earthworks report as legal, political, and engineering challenges mount
WASHINGTON--(investor advisory released today raises significant questions about the serious risks associated with Anglo American plc’s (LSE: AAL, JSE: ANGLO) Pebble mine project in southwest Alaska. The advisory details the growing list of regulatory, legal, engineering, and political challenges facing the London-based mining giant as it struggles to secure permits for the controversial gold-copper mine planned for the headwaters of the Bristol Bay watershed, the world’s biggest wild sockeye salmon fishery.)--An
“After scrutinizing the project details, we believe there are significant risks that must be considered.”
The Pebble mine is a 50-50 joint venture between London-based Anglo American plc and Canada-based Northern Dynasty Minerals Ltd. known as the Pebble Limited Partnership. The report points to the dramatic drop in share price at Northern Dynasty, whose only project is the Pebble Mine, as evidence of lack of confidence in the project. The company’s share price has dropped from $20/share in February 2011 to less than $10/share in January 2012.
“Local opposition to the Pebble mine project has translated into a barrage of legal, political and regulatory hurdles over the last year,” said Jonas Kron, analyst at Trillium Asset Management Corp. “After scrutinizing the project details, we believe there are significant risks that must be considered.”
While Anglo American and Northern Dynasty have yet to enter the permitting phase, they have already encountered substantial opposition from the commercial and sport fishing industries and the Bristol Bay Native Corporation. Over fifty leading U.S. and U.K. jewelers with sales of $5.5 billion have pledged not to buy gold from Pebble. Recent events could preclude development altogether:
- April 2012: EPA will release results from a scientific assessment of the suitability of large-scale development in the watershed.
- October 2011: a citizen initiative was approved by Lake and Peninsula Borough voters prohibiting permits for large resource extraction activities like Pebble.
- April 2011: nearly 30 investors representing $170 billion in assets and holding 13 million shares in Anglo American urged EPA to conduct a 404c Clean Water Act review of the mine.
Posted: February 22, 2012