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Pebble awaiting OK of $100M budget

Posted: Sunday, January 13, 2008

ANCHORAGE Northern Dynasty Minerals Ltd. is taking a winter hiatus from core drilling but plans to resume drilling in February, anticipating an overall budget of approximately $100 million for the 2008 season.

While the budget awaits approval at a board meeting, scheduled for late January, spokesman Sean McGee said Dec. 27 that it will most likely be in the range of the 2007 budget, which included upward of $60 million for exploration, plus $35 million for environmental work and community relations.

To date, approximately $200 million has been invested in what is now known as the Pebble Limited Partnership, a joint investment by Northern Dynasty and Anglo American US (Pebble) LLC, McGee said.

"We are continuing our work toward the day where we can propose a mine plan," McGee said. "We are still focused on doing the science at this point," he said. "We don't yet have a proposed development plan. Pebble is still a concept."

The Pebble project area lies 200 miles southwest of Anchorage and comprises 98,600 acres of Alaska state mineral claims. The controversy over the project lies in its location at the headwaters of the Bristol Bay watershed, home of the world-renowned Bristol Bay sockeye salmon harvests.

Hundreds of commercial, sport and subsistence fishermen, hunters, environmental groups and individual fisheries scientists have expressed worry that development of the mine could cause permanent damage to the environment, adversely affecting the millions of salmon that return home to the tributaries of Bristol Bay each year.

Northern Dynasty officials have said they are spending millions of dollars collecting environmental data on the area of the proposed mine, with plans to include that body of work with applications to build the mine itself. The company has declined to release portions of that data, saying project opponents could use the information out of context.

Fisheries biologists like Carol Ann Woody are skeptical that such a large-scale mining project could be developed without having an adverse affect on the environment.

"It is critical to remind the public that salmon don't spawn willy-nilly in a random habitat," she said. "They return to the specific reaches of river or beaches where they were born, using their sense of smell, which can detect where they were born to spawn, and they are finely tuned or adapted to the specific environmental conditions of that area."

In an interview conducted mid-December, Woody expressed particular concern over the lack of baseline data on the fish, water quality and quantity in the region proposed for mine development. "Because the fisheries resource in this area is extraordinary, it deserves extraordinary protections," she said. "All the scientific data collected in this area should be reported to the state annually and data should be available to all stakeholders for review.

"Mine developers are drilling hundreds of holes, some deeper than a mile, into areas with complex groundwater flows and reactive heavy metal ore, with no consideration of potential harm caused to salmon or their food chains," Woody said. "Such drilling can change both natural groundwater flows and water chemistry, which can cause salmon to suffer reduced reproductive success."

Woody, who has been a fisheries scientist for more than 25 years, also expressed concern over the effects of road construction on salmon habitat and the food chain. Other concerns include leaching and leaking ponds, with pumps that must be run and maintained forever.

Tom Crafford, large mine permitting manager for the Alaska Department of Natural Resources, said the baseline studies being developed by the Pebble project will be subject to intense scrutiny from state and federal agencies.

The company has been hosting annual summary presentations on its environmental work for the past four years in closed-door sessions for representatives of state and federal agencies. The company makes PowerPoint presentations, but there are no handout materials, he said.

"I would say it's an extremely impressive array of studies being conducted by very competent and experienced Alaska scientists," Crafford said. The state also has the option to hire its own independent consultants, and charge the company for all expenses, he said.

"The company has collected extensive amounts of data," he said. "By the time they apply for permits, it will be one of the most intensively studied tracts of land in the world."



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