By Dan Frasier
We have until June 30th 2019 to speak out against the Pebble Mine and for America.
We live in a particularly divisive world these days. Issues that used to be fodder for spirited conversation amongst friends and family now create permanent rifts; dividing and alienating people from each other. So it’s rare to find an issue upon which even the most extreme believers from either side of the aisle can agree. Fortunately, that issue is an important one and one which, thanks to the comment period being open until June 30th, we can voice our opposition to from either side of the aisle. Of course, I’m talking about the current Pebble Mine proposal being reviewed by the Army Corp of Engineers.
The environmental opposition to this mine, a topic that tends to resonate more with left-leaning voters, though not exclusively their domain, is very clear. In the history of mines of this type, never has one managed to avoid serious detrimental impacts to clean water. Add to that the unique and fragile ecosystem upon whose headwaters this particular mine sits and you have a recipe for environmental disaster. Little more needs to be said to rally environmental support for preventing the construction of Pebble Mine.
What I think is far less understood is the business and economic reasoning for the elimination of this threat to a great American industry. A reality that should motivate anyone who supports the current administration’s economic policy to oppose this mine. There is a lot of misinformation and some complicated corporate structure here so allow me to explain.
Pebble Mine is a figment of the imagination of a Canadian shell corporation.
That’s how these things work. A small speculative company, in this case, Northern Dynasty Minerals (ticker: NAK), will buy a mining claim. They have no real assets aside from the claim, and absolutely no ability to actually construct a mine. What they do have is some cash and a prayer. They spend that cash speculating on there being ore in the ground on the claim they’ve purchased. Very few have this bet pay-off but when it does, it pays off big. If they find ore, they then put together a partnership of legitimate mining companies who develop a mine plan, help shepherd the plan through the appropriate regulatory agencies, and then actually own and operate the mine. That’s how it usually works. But not in this case.
Here, Northern Dynasty tried to follow that plan, but all of the partners backed out a number of years ago as they recognized the environmental, economic, and reputational risks and infeasibility of the mine. In fact, one of the ex-partners gifted their shares to two Alaskan charitable organizations. Leaving a TINY Canadian company holding the claim on some potential ore in the Bristol Bay headwaters but without any approvals or the actual ability to build and operate a mine. So Northern Dynasty decided to attempt to get the approvals themselves, and then bring in partners later. And that is where we currently stand. Tiny Canadian shell company, no partners and no approvals.
So what happens if the Army Corp approves the current plan?
Well, the Canadian company looks for partners. When they managed to have partners in the past there were four other companies involved. Rio Tinto, headquartered in Australia, Mitsubishi Corporation, a Japanese firm, Anglo-American, a London based mining outfit and First Quantum Minerals out of Canada. If you hadn’t noticed, that means the rights to pursue the world’s second-largest copper reserve, estimated at a half a trillion dollars in value and located on American soil, were owned by a Canadian, Australian, Japanese and British consortium of companies. In exchange for the ownership of all of this precious metal, they estimated Alaska would get around 1000 jobs out of the deal until the mining stops.
Now, there is nothing to say those would be the partners on this go-round. Northern Dynasty will have its pick of potential partners from around the globe. There is some speculation that the Chinese Government would very much like control of one of the globes great metal supplies; something they are already pursuing with impunity throughout Africa. Regardless, these foreign firms would be glad to get their hands deep into American soil.
Keeping foreign entities out of US mining operations wouldn’t be the only benefit to American Industry by killing this mine plan now.
The much bigger direct threat is to the industry that could be protected by denying Northern Dynasty’s attempts to mine Bristol Bay. Half of the world’s sockeye salmon supply comes from this drainage. This fabulous American resource creates an industry that puts blue-collar workers into jobs; 14,000 in the commercial fishing industry in Bristol Bay alone having something like a $1.5bln direct economic impact every year. Those figures don’t include the economic impact this American frontier has in terms of the outdoor, sportfishing, hunting and other peripheral industries. All of these American jobs and this globally important resource could be protected by simply rejecting the application of one tiny Canadian shell company to mine on American soil.
So where does that leave us?
A small Canadian shell company wishes to bring in partners, quite possibly foreign entities to extract precious metals from Alaska. If approved, that mine threatens America’s stronghold on a globally important food resource that creates thousands of US jobs and puts billions into the local economy. If we’re willing to take on Chinese trade agreements, threaten US firms that move jobs overseas, and disrupt trade with our allies in order to create American jobs and maintain our industrial might, this one seems like a no brainer.
Your voice counts. Please help.