...by Bruce Switzer, former head of environmental affairs for Cominco Ltd.
Pebble Can't Work for Alaska
Since 2008 Pebble has annually stated that permit applications are forthcoming next year. Five years later, it's still next year. Under the Alaska process Pebble had more than enough environmental information for permitting in 2009. Moreover, approval is foregone as far as the Department of Natural Resources and the administration are concerned. Contrary to Pebble and others, permitting in Alaska is easy -- witness Rock Creek. In fact, the archconservative Frazer Institute every year points to Alaska as one of the most mining friendly places on Earth. Pebble should have been in production two years ago.
So, with commodities at record highs, why did Pebble delay permitting? I think it rediscovered what Cominco knew: Pebble is economically marginal and physically challenging. That's why Cominco sold it for peanuts and waived back-in rights.
The reason for procrastination is simple. Pebble can't devise a mine plan that's profitable. Besides low-grade ore and water management issues, energy and workforce costs are very high. Compounding that, Anglo is in trouble: three CEOs in five years; looming nationalization and violence in its African mines; billions in cost overruns in Brazil; labor problems in Chile; a downgrade by S&P, and gold just took the worst two-day loss in 30 years.