|
Web posted
"Copper demand is rising around the world almost exponentially, especially with the growth of China and India," Robert Dickinson, chairman of Hunter-Dickinson Inc., told the Resource Development Council's members at its annual meeting in Anchorage June 13. "And new supplies have not come on stream simply because the metal prices have been so low for so many years."
Hunter-Dickinson is the parent firm of Northern Dynasty Minerals, of Vancouver, British Columbia, the company posed to develop the copper, gold and molybdenum deposit on state lands in the Bristol Bay region of Southwest Alaska. Hunter-Dickinson is spending $39 million in 2006 on Pebble-related exploration drilling and related studies, previously the firm had invested $72 million, he said.
The region, lush with wildlife and prized by anglers for its sport fishing opportunities, is also critical to the commercial fishing industry, owners of luxurious hunting and fishing lodges, and families who have pursued a subsistence lifestyle for thousands of years.
Potential threats to the environment are a critical issue for neighbors, including residents of the Lake and Peninsula Borough, and shareholders of the Bristol Bay Native Corp.
Down in Bristol Bay, noted Jason Metrokin, who addressed the RDC luncheon on behalf of BBNC, the brown bears outnumber the people. So too do the salmon, whose annual journeys upstream are responsible for the world's largest sockeye salmon fishery.
"As landowners, we will never be able to say this project is risk free," Metrokin said. "BBNC is a responsible land owner. This project is not on our land, but our lands will be impacted."
To date, the regional Alaska Native firm, with some 7,800 shareholders, has continued to gather information about the proposed mine and has yet to take a stand for or against its development.
Metrokin said his firm encourages development and that during the selection process under the 1971 Alaska Native Claims Settlement Act, BBNC selected some lands for it's hard-rock mineral potential. Still, the current economy is based on subsistence, commercial fishing, government jobs and tourism, he said.
All Alaskans should be educating themselves on the Pebble project's potential benefits and risks, he said.
Mayor Glen Alsworth of the Lake and Peninsula Borough said people in his borough are aware that they can no longer depend on the single commercial salmon economy, "but we don't know if Pebble is part of the solution.
"There is a lot of potential (in mining), but also a lot of questions," he said. "We think environmental protection and economic development can go together."
Alsworth said borough residents have faced a lot of economic challenges. Populations in villages and subsequently their schools, are declining as people move out, in part because of the rising cost of fuel for heating and transportation, he said.
"In this cash economy of the 21st century, it is impossible to rely on the barter system. Fuel pumps don't accept beaver pelts," he said.
Alsworth said the potential mine would also involve social impacts, which need to be addressed. "We need to shape how the project would be developed," he said.
Alsworth said he is impressed with the rigorous requirements that would have to be met for mining permits and that the borough government wants to work with state and federal officials to see if mining is an economic solution for the region.
"We are waiting to evaluate (all the facts), but we will not trade our pristine waters and our fish for a mine or any other development," he said.
Bruce Jenkins, chief operating officer for the Pebble project for Northern Dynasty Mines, said later that his company respected the right of many communities and organizations within them to take a stand for or against the mine, but said they should wait until all the facts are in. "We're still neighbors, and we still want dialogue and communication," he said.
A growing number of small communities and others with economic interests in the Bristol Bay region, including commercial fisheries groups, have come out in opposition to the mine.
Scott Brennan, executive director and chief operating officer of the Renewable Resources Coalition Inc., is one of those opponents.
"They are putting existing Alaska jobs at risk and the vast majority of jobs created (by a mine) may well go to people who don't live in Alaska today," Brennan said. "It just doesn't pencil out."
Brennan has also been critical of the mining industry in Alaska in general, saying it does not pay its fair market value in taxes. Brennan points to an analysis prepared by Rep. Paul Seaton, R-Homer, which concludes the mining industry paid in taxes 0.7 percent of the value of minerals taken out of the state.
But Steve Borell, executive director of the Alaska Miners Association, argues that net proceeds and royalty payments to the state are tied to metal prices.
Borell said mines pay a license tax to the state, no matter whose land they are on, but mines located on state land also pay a rental fee for claims they hold, plus a production royalty. If mining grows, mining will pay a lot more taxes, he said.
Financing from AIDEA considered
With the discovery late last year of an additional 1.8 million tons of minerals in the Pebble east area, Northern Dynasty has gone back to the drawing board on the project, and is waiting until 2008 on its permit applications Dickinson said. The company is now considering a possible combination open-pit and underground mine, which Dickinson estimated will cost about $2 billion to develop.
The applications for permits notwithstanding, Pebble is already looking to the Alaska Industrial Development and Export Authority as a source of funds for development.
Jim McMillan, deputy director of the state's economic development lending agency, said AIDEA has met with officials of Northern Dynasty at least a couple of times. "And that's not unusual," McMillan said.
"A lot of mining companies will come by and introduce themselves to us, and give us an overview of their project, to see if we have any programs that may benefit them," he said. "They have expressed an interest in doing something with us. They have not requested an application."
McMillan said most of the time when AIDEA talks to mining companies about financing, the focus is on conduit revenue bonds. "Some aspects of mining operations that may qualify for tax-exempt financing are ports, waste disposal sites, disposal ponds," he said. "We did that for Fort Knox (at Fairbanks). We did their tailings pile. It qualified as solid waste.
"We can potentially finance other infrastructure (for Pebble)", he said. "For conduit revenue bonds, they would have to find an investment banker who would underwrite the bond and purchase the bond. The investment banker (as well as AIDEA) would do extensive due diligence."
Brennan, whose group represents a number of people opposed to the mine, was critical of such potential financing. "We should not subsidize, under any circumstances, a boom and bust project that threatens many existing Alaskan jobs," he said.
Margaret Bauman can be reached at margie.bauman@alaskajournal.com.
|
