Northern Dynasty Mines says it will bring in a major mining company as a partner in the company's proposed $1.5 billion Pebble copper/gold mine on the Alaska Peninsula southwest of Anchorage. Bruce Jenkins, the company's chief operating officer, said Northern Dynasty will have a partner by the time state and federal permit applications are made in mid- to late 2006.
Northern Dynasty was formed to develop the Pebble project and bring it to a certain point. The intention has always been to bring in a partner with experience in operating large mines, Jenkins said in a briefing on the project. Pebble, if built, will be one of the world's largest open-pit mines.
"We will not file for permits until we have a major mining company as a partner," Jenkins said.
The reason is mainly that a large partner will probably want to tweak the design and plan for the mine, and any change to plans developed by Northern Dynasty need to be made before the permit applications are made, he said.
The company is actively seeking partners and gave tours of the project to six major mining companies this year. Jenkins said another six or seven would visit the mine next year.
"We're talking to the who's-who of the world mining industry," Jenkins said.
John Rense, a minerals geologist and retired NANA Development Corp. senior manager, said he was encouraged by Northern Dynasty's plan to take on a major company as a partner. NANA is the landowner at the Red Dog lead/zinc mine in Northwest Alaska, the world's largest zinc mine.
Many of the mining "horror stories" cited by opponents to mining development are cases where consortiums of smaller companies were formed to do projects. When the projects ran into trouble the companies involved weren't big enough to handle the problems. he said.
Major mining companies have their reputations at stake and will not allow one of their projects to become a showcase of a mine going bad on environmental grounds, Rense said.
"I think that's a wise strategy," he said. "They can't afford to have a mistake with such a stakeholder."
Rense was NANA's resources vice president when the large Red Dog Mine was developed, and then the corporation's chief operating officer when Red Dog was in production. Along with a handful of other NANA managers, he saw Red Dog move from its initial planning stages on through development and production.
Pebble, which would be located on state lands 18 miles north of the Iliamna village, has an estimated 3 billion tons of ore that contain a measured and indicated resource of 31.3 million ounces of gold, 18.8 billion pounds of copper and 993 million pounds of molybdenum. The ore has 0.3 percent per ton of copper equivalent.
Northern Dynasty is spending about $35 million this year, with more than half - about $19 million - budgeted for environmental research. The 2005 budget is $10 million more than 2004 spending levels, Jenkins said.
Forty consulting firms are retained for the current study program. Seventy percent of those are Alaska companies, Jenkins said.
If the mine is constructed it will require about 2,000 construction workers for two years and about 1,000 production employees, Jenkins said. Depending on the production rate selected in the project design, the mine's existing resources are sufficient for a mine life of 30 to 50 years, he said.
The present schedule is for the engineering feasibility study to be complete by January and permit applications to be made between June and September 2006.
About two to three years would be needed to secure permits for the mine. Construction could begin in 2009 and production could start on 2011 or 2012, Jenkins said.
Tim Bradner can be reached at tim.bradner@alaskajournal.com.
