A London-based mining company with worldwide reach has entered a limited partnership with Northern Dynasty Minerals Ltd. to jointly develop the huge Pebble Mine deposits northwest of Iliamna.
In a press release Tuesday, officials with British Columbia-based NDM Ltd. announced it had penned an agreement with Anglo American plc, one of the world's largest mining and natural resource groups that has operations in 45 countries in Africa, Europe, Australia, Asia and North and South America.
Under terms of the partnership, Anglo will become a 50-50 partner with NDM through a staged cash investment that, over time, would reach $1.425 billion (U.S.).
The phased effort aims to engineer, acquire permits, build and operate Pebble mining claims held by NDM by 2015.
Those claims include the estimated 4.1 billion-ton Pebble West deposit to be mined open-pit style, and the deeper, higher-grade deposit estimated at 3.4 billion tons called Pebble East that NDM has said likely would become an underground mine.
The Pebble resources, NDM said, rank among the world's most important accumulations of copper, gold and molybdenum. If developed, the mine would be one of the largest, if not the largest, of its kind in the world.
According to the press release, Anglo has agreed to spend $125 million this year to help complete by the end of next year an ongoing pre-feasibility study being conducted by Northern Dynasty Mines Inc., an Anchorage-based subsidiary of NDM Ltd.
Then, to retain its 50-percent share, Anglo must commit to spending a further $325 million for a full-out feasibility study to be finished by 2011, at which point the two firms would make the decision whether to proceed with mine development.
If a decision were made to move forward, Anglo would then be obligated to commit another $975 million to the project. Thereafter, NDM said, all further expenditures would be on a 50-50 basis.
The agreement gives both corporations equal project control rights. Ron Thiessen, president and CEO of Northern Dynasty Minerals, said that over the next three to six months, they will put in place management and operating team for the Alaska-based operating company (not yet given an official name) that would be guided by a board of directors with equal representation by Anglo and Northern Dynasty. Meanwhile, Northern Dynasty Mines will continue as operator, Thiessen said.
Anglo's CEO Cynthia Carroll said in the press release that the corporation sees Pebble as a potential world-class operation, adding, "We are excited to be initiating operations in the state of Alaska, a jurisdiction known around the world for the responsible development of its natural resources.
"Alaska's environmental standards and permitting requirements are among the most stringent in the world," Thiessen added.
He noted that NDM's Alaska-based team had been "undertaking thorough and balanced technical, environmental and social assessments to ensure that the Pebble project is developed in a manner that protects the environment and traditional ways of life." Anglo, he said, would bring "commitment and depth" in all those areas.
"Our shared goal is to develop a state-of-the-art operations with a high annual metal production profile that will bring direct benefits to the local communities, as well as being a catalyst for sustainable economic development in the region and across the state," Thiessen said.
Northern Dynasty is a "junior" mining company, a term defining companies that explore and secure financing for mining projects, but which do not actually operate mines.
Typically, juniors partner with or sell out to "major" mining companies, such as Anglo, when mines move into the development phase.
For more than a year, NDM has been negotiating with several majors, finally settling on the deal with Anglo.
Even with the influx of Anglo's cash, the new partnership is facing mounting opposition from Bristol Bay region villages, tribal groups, environmental groups and individuals who see mine development within the critical fish and wildlife habitat as a threat to the sustainable resources those areas produce.
However that opposition, while sizeable and growing, is not universal, and many people and leaders within the region have expressed support for mine development, seeing it as an opportunity for jobs and an enhanced regional economy.
Hal Spence can be reached at firstname.lastname@example.org.
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