JUNEAU, Alaska — One of the partners in a massive and contentious proposed gold and copper mine in Alaska is pulling out, raising questions about the project’s future.
London-based Anglo American announced Monday that its subsidiary, Anglo American (US) Pebble, is withdrawing from the Pebble Mine project, leaving Canada-based Northern Dynasty Minerals as the sole owner.
Northern Dynasty’s U.S.-traded shares were hammered on the news, closing Monday down nearly 33 percent to $1.49.
Anglo American CEO Mark Cutifani said the decision follows a review of his company’s backlog of projects.
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He said in a statement that the company is prioritizing money for projects with the highest value and lowest risks within its portfolio and reducing the amount of spending needed to sustain projects in the preapproval phase.
Anglo’s subsidiary had spent about $540 million on the Pebble project through June, Northern Dynasty said in a news release. To retain its 50 percent interest in the project, Anglo American would have had to fund $1.5 billion in project costs through permitting and construction, Northern Dynasty has said.
It’s not clear what’s next.
Sean Magee, vice president of public affairs for Northern Dynasty, said his company has the resources and expertise to move the project into the permit process and to carry it to what would likely be the next major milestone: bringing on a new partner. He said he expects the permitting phase to require lower levels of spending than have been seen in the past.
Mike Heatwole, a spokesman for the Pebble Limited Partnership, which was created to design, permit and run the mine, said by email that Pebble “remains an important project for Alaska and we will share additional information about the way forward for the project in the days and weeks ahead.”
In April, Northern Dynasty said the goal was to begin permitting before the end of 2013, but the timeline has slipped several times over the last few years. Magee said there has been no decision to change plans at this point, but added that officials are “re-evaluating everything.”
Pebble has said the prospect is one of the largest of its kind in the world, with the potential of producing 80.6 billion pounds of copper, 5.6 billion pounds of molybdenum and 107.4 million ounces of gold. But it’s near the headwaters of a major salmon fishery.
Given the significance of the project, Magee said it will almost certainly be developed by a consortium of major partners. He declined to speculate on what future partnerships might exist, noting in part that this has been a difficult time in the markets for the mining sector.
A fierce public-relations battle has surrounded the Pebble project for years. Supporters contend it would bring much-needed jobs to economically depressed rural Alaska, but opponents fear it could adversely affect a way of life in the region.
The U.S. Environmental Protection Agency is studying the impact of large-scale mining in the Bristol Bay region after concerns were raised about the project. A final report, expected this year, could affect permitting for the mine.
Tim Bristol, director of Trout Unlimited’s Alaska program, said in a statement he couldn’t think of a development project in the state’s history that has faced such “wide and deep opposition” from Alaska’s citizens. Bristol, a mine critic, said Anglo American’s decision is no surprise, given the number of Alaskans who support efforts to protect the Bristol Bay region.