A May 2013 report commissioned by the Pebble Limited Partnership indicates that the proposed Pebble Mine would have a substantial effect on Alaska’s economy. The partnership considers the Pebble deposit to be one of the largest of its kind in the world.
Alaskan economist Scott Goldsmith noted the study in his most recent newsletter, which is funded by First National Bank of Alaska.
“A recent study indicates that the Pebble mining prospect in southwest Alaska could, if developed, make a significant contribution to the Alaska economy, given its measured and indicated resources of 55 billion pounds of copper, 3.3 billion pounds of molybdenum, and 67 million ounces of gold,” Goldsmith wrote.
Goldsmith is a professor of economics at the University of Alaska’s Institute of Social and Economic Research. The economic analysis firm IHS Global Insight completed the study; Alaska-based economic research firm McDowell group contributed to it.
The report says the value of the proposed mine’s annual output would be between $1.5 and $3 billion. During the construction phase of the mine, $27 million in taxes would be paid to state and local governments, the report says. That would increase to $165 million to $213 during the initial production phase. The mine could create 4,725 jobs during the construction phase, 2,890 during initial production, and 2,750 during subsequent development.
Goldsmith points out that the state budget, excluding Permanent Fund appropriations, is $11.3 billion. State revenues for fiscal year 2014 are estimated to be $10.66 billion, “suggesting the need to draw on reserves to fund the budget for the first time in several years.”
Goldsmith also cited a survey by the Fraser Institute that ranks Alaska as 19th out of 96 regions for mining attractiveness.
Goldsmith wrote, “Alaska attractiveness improved this year based on availability of labor and skills, the quality of the geological database, and infrastructure.”
A state court judge was asked earlier this month to overturn a 2011 initiative that bans large-scale resource extraction that would destroy or degrade salmon habitat in the Lake and Peninsula borough, where the Pebble deposit is located. The State of Alaska is arguing that because the deposit is located on state land, the borough has no control over its development.
London-based Anglo American PLC dropped its support of the Pebble project last week. Anglo had spent about $540 million on the project through June. The company would have had to spend nearly a billion dollars more to retain its 50 percent interest in the project.
A report by the U.S. Environmental Protection Agency on the impact of large-scale mining in the Bristol Bay region is expected to be released later this year. The report could affect permitting for the mine.