ANCHORAGE, Alaska – London-based mining giant Rio Tinto announced Monday it plans to conduct a review of the Pebble Mine prospect in southwest Alaska, including whether to cut its ties with the proposed project.
The company said in a statement that the strategic review will consider whether the project fits with the “strategy of investing in and operating long life and expandable assets.”
The announcement follows a letter Thursday to Rio Tinto CEO Sam Walsh from New York City Comptroller John Liu and California State Controller John Chiang. The two oversee pension funds that are substantial, long-term shareholders of Rio Tinto plc. They warned about risks of being associated with Pebble, a massive gold and copper prospect near the headwaters of a world-class salmon fishery in Alaska’s Bristol Bay region.
Company spokesman David Outhwaite said the review is not connected to that letter or a letter the financial officers sent him last month.
“It wouldn’t be right to say it was in response to the letter,” he said.
The company owns a 19 per cent share of Northern Dynasty Minerals Ltd., which recently assumed full ownership of the mine project.
In their letter last week, Liu and Chiang said they found Northern Dynasty’s response to their concerns about the project’s possible legal and regulatory risks perfunctory. They said risks outweighed the market value of Rio Tinto’s share in Northern Dynasty.
In a Nov. 4 letter, the financial officers told Walsh that Pebble would have “significant environmental and social impacts” that pose regulatory, legal and reputational risks for any company pursuing it. They asked that Rio Tinto conduct and release a comprehensive review of the risks involved.
“In our view, the investment in the Pebble Project presents undue risk not only to the long-term sustainability of the Bristol Bay region, but also to the long-term value of our investments in Rio Tinto,” they wrote.
Northern Dynasty said in a statement Monday that the project is an “initiative to responsibly develop a globally significant copper, gold and molybdenum deposit in southwest Alaska into a modern, long-life mine.” It said the project will benefit the “people, culture and industries” of Alaska, as well as suppliers, consultants and industries in the Lower 48.
The company said the project has the potential to support 15,000 American jobs.
Northern Dynasty recently assumed full control of the project after Anglo American PLC withdrew. Anglo American has said the decision followed a review of the company’s backlog of projects and that the company is prioritizing money for projects with the highest value and lowest risks within its portfolio.
Northern Dynasty has said it will look for a new partner.
The Natural Resources Defence Council, an environmental group, said Rio Tinto’s announcement is the latest indication from the mining industry that the proposed project site is no place for large-scale-mining.
“The head of the watershed of the greatest salmon fishery on the planet is no place to gamble on one of the largest mining operations ever conceived,” Joel Reynolds, the group’s senior attorney and western director, said in a statement.
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