By Margaret Bauman
Alaska Journal of Commerce

A major mining company based in London has agreed to more than double its investment in developing a vast copper, gold and molybdenum deposit in Southwest Alaska.

Officials of Northern Dynasty Mines in Vancouver, British Columbia, said Jan. 30 that when the purchase of 9.4 million common shares of Northern Dynasty stock would be completed Feb. 1, Rio Tinto's investment in the Pebble project would rise from 9.9 percent to 19.8 percent.

Rio Tinto has options to acquire another 10 percent, which means the company could wind up with 30 percent of Northern Dynasty.

Rio Tinto owns Kennecott Minerals, which through a subsidiary operates the Greens Creek Mine on Admiralty Island near Juneau.

Rio Tinto is purchasing its increased stake in Northern Dynasty from London-based Galahad Gold, which still has about a 10 percent interest in the Pebble project. Sean Magee, vice president of public affairs for Northern Dynasty, said that at one time, Galahad wanted a controlling share of the project, but Northern Dynasty was not interested. “We accepted them as investors, and they were key providers of capital in the early days,” Magee said.

The controversial Pebble project consists of the open pit-style Pebble West deposit of 4.1 billion tons and the deeper, but higher grade 1.8 billion ton Pebble East deposits, said Ronald Thiessen, president and chief executive officer of Northern Dynasty. The projects indicated mineral resources include 19 billion pounds of copper, 31 million ounces of gold and 1 billion pounds of molybdenum, Thiessen said.

Opponents of the Pebble project meanwhile remained adamant that such development still poses the prospect of irreparable damage to the environment of the Bristol Bay watershed.

Leaders of the lucrative sport fishing industry, like many in commercial fisheries, want federal and state officials to permanently protect the Bristol Bay watershed from industrial mineral development.

The watershed is critical to the world's largest sockeye salmon fishery, as well as other sport and commercial fisheries.

Patrick Flatley, outreach coordinator for the Bristol Bay Alliance, said the previous owner of the Pebble project, Teck Cominco, made a more responsible mining decision by divesting itself of the project. “Teck Cominco walked away in part because of the tremendous risk to the water and habitat that would be posed by this type of industrial activity,” Flatley said.

“I don't see the wisdom in investing in a mine that will never be built,” said Scott Brennan, chief operating officer of the Renewable Resources Coalition. “It's not going to happen.”

Northern Dynasty has already invested more than $135 million in the Pebble project, including drilling, engineering, environmental and socio-economic programs. The company is now focused on thoroughly assessing Pebble East in order to integrate that discovery into an overall integrated development plan for a modern, world-class long-life mine, Thiessen said.

While Northern Dynasty still plans to file for major operating permits in 2008, “the principal wild card is the Pebble East resource,” Magee said.

“The discovery of Pebble East has given us a bunch of new options in how we might develop the resource. Everything is back on the drawing table. Depending on who the major partner might be, they will have an influence ultimately on the development that we propose,” he said.

“We can design a project — and propose it to the federal and state agencies and the people of Alaska — that is shown to protect those resources,” he said. “We have confidence that those decisions are manageable.”

Margaret Bauman can be reached at margie.bauman@alaskajournal.com.