Anglo American plc has given notice under the Pebble limited partnership agreement that it is withdrawing from the Pebble gold-copper project in Alaska. Northern Dynasty Minerals Ltd. will proceed with the Pebble project on its own.
In the past 8 years Anglo-American and Northern Dynasty have spent $800M developing the Pebble project. The Pebble deposit is among the largest copper-gold porphyry systems, and one of the greatest stores of mineral wealth, ever discovered. The U.S. Geological Survey lists the Pebble resource lands as the world’s most extensive mineralized system. The current Pebble resource estimate includes 5.94 billion tonnes in the measured and indicated category containing 55 billion lb copper, 67 million oz gold and 3.3 billion lb molybdenum; and 4.84 billion tonnes in the inferred category, containing 26 billion lb copper, 40 million oz gold and 2.3 billion lb molybdenum.
Although the Partnership has not yet made application for the project, the US Environmental Protection Agency (EPA) did issue a paper “watershed assessment” on the impact of large-scale mining on the Bristol Bay watershed. The EPA in an environmental study released last April was scathing of the project, determining that the mine could wipe out nearly 100 miles of streams, and 4,300 acres of wetlands in the Bristol Bay region. Further, the potential development of the Pebble mine has drawn the ire of the environmental movement. The New York-based Natural Resources Defense Council (NRDC) calls on the EPA to adopt a special process to review the environmental impacts before the official application.
The Pebble Partnership was working on a mine pre-feasibility study hoped to present its preliminary project design to public stakeholders in 2013 prior to initiating permitting.
Anglo American is one of the world’s largest mining companies, is headquartered in the UK and listed on the London and Johannesburg stock exchanges. Anglo-American employs 100,000 people worldwide. Anglo American has a market cap in excess of $20B.
Northern Dynasty (ticker NDM on TSX) trades at $1.53 and has a market cap of $150M.
Anglo-American decided to cut its losses, and “take the pebble out of its shoe”. The Pebble project faces significant opposition within the state of Alaska and from the environmental movement. The actions of the EPA have served to further undermine the prospects of this project moving forward.
Anglo-American was a big player, with deep pockets, but it did not relish a protracted battle for many years to advance Pebble. The company’s withdrawal is a major blow to the project.