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Anti-Pebble Group Releases So-Called Investment Advisory

Because apparently professional investment boutiques want to solicit the advice of radical environmental groups, Earthworks has released what masquerades as an unbiased, independent “investment” analysis of the proposed Pebble Mine project. If you’re interested, you can check it out here (.pdf).

Though the advisory does contain a decent factual overview of the permitting process and a brief discussion of the technological scale of the project, it quickly turns into a thinly-veiled attempt to convince laypeople and investors that the Pebble Mine is some sort of financial and environmental disaster waiting to happen. The report mentions that there are a number of legal uncertainties regarding the permitting of Pebble Mine, including attempts by environmentalists to use the Clean Water Act to pre-emptively deny the permit.

Finally, a few howlers from the end:

In February 2008, the Pebble Limited Partnership hired an independent contractor, the Keystone Center, to develop and coordinate a stakeholder dialogue process to develop an environmentally preferred mine plan. Key stakeholder groups, such as the United Fishermen of Alaska and Nunamta Aulukestai (an association of nine Native Village Corporations in Bristol Bay), have rejected the proposed process on the grounds that it does not include a valid “no mine alternative.”

Indeed, a mining company that is in the business of developing mines, and wants to develop a mine in an environmentally responsible fashion didn’t include the option of not developing the mine at all. Shocking, I know.

And a few questions that Earthworks wants investors to ask:

The infrastructure necessary to develop the Pebble project is unprecedented. The political, regulatory and technological challenges associated with permitting the mine, a 378 MW power source, 200 miles of transmission lines, 100 miles of road and slurry pipelines, a deep water port are substantial, and appear to belie Anglo American’s forecast for completing the permitting process has already been delayed three years, and a permit application has yet to be submitted. What is Anglo American’s rationale for this timeline? What are the risks associated with securing a financial return on the Pebble project associated with permitting or construction delays or the failure to secure permits for any one of these facilities?

The Pebble company would also have to build a road (*GASP*) and a power plant much smaller than the average power plant size in the United States. Do you really think its possible to build a power plant and a road?

Alaska business leaders are describing Pebble as the next Arctic National Wildlife Refuge (ANWR), referring to the decades-long stalemate over oil and gas development in the Arctic National Refuge. What are
the reputational and financial risks to Anglo American of becoming embroiled in what appears to be an increasingly controversial project?

This is laughable. Does the average American, or even the average Alaskan, have any idea which companies want to produce oil and gas from ANWR? Perhaps an Alaskan will, but if you ask the average American this question they’re going to have no idea. The reputation of oil companies are long established, and often negative (because people hate how expensive gasoline has become). The idea that developing the Pebble Mine could ruin the value of the involved mining companies is far-fetched.

Some environmentalists will pursue all sorts of avenues to prevent development of the resources that have made the world a more livable place for humanity. Thankfully, when people or organizations make investments using their own money, they actually take a close look at these issues and won’t buy into propaganda by environmental groups.

 

 

 

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