British mining giant Anglo American’s abandoning the complicated, expensive and grindingly slow slog to develop the rich Pebble prospect in Southwest Alaska is understandable — but you have to wonder how it must appear to other businesses and industries considering investments in Alaska.
Anglo American, which poured more than $541 million into the Pebble effort, points to its deep backlog of projects waiting for development. It says it is looking at higher-value, lower-risk undertakings, planning to cut by a third the nearly $950 million it spends annually on keeping afloat pre-approval stage, complicated, from-scratch projects such as Pebble.
All that may be a dodge, a way of saying Anglo American could see the handwriting on the wall and grew weary of trying to win anything resembling a fair hearing for Pebble in Alaska. With the Environmental Protection Agency poised, if not panting, to block Pebble ostensibly to protect Bristol Bay salmon — based, mind you, on an assessment that could not even pass muster with its own peer review panel — the $300 billion project’s future must have seemed sketchy.
It is notable that Anglo American did not sell, likely because there were no takers in the current environmental and regulatory atmosphere. It simply folded its cards and opted to eat a $300 million post-tax penalty for pulling out.
The company’s partner, Canada’s Northern Dynasty Minerals, says it will soldier on, that it has the dough to shepherd the project through the state and federal permitting process. Its stock took a 33 percent hit when Anglo American, and its deep pockets, took a walk. Pebble potentially could produce 55 billion pounds of copper, 67 million ounces of gold and 3.3 billion pounds of molybdenum. Northern Dynasty does not plan to give up.
What does all this tell investors about Alaska? About special interests? About the environmental industry’s power in this state? About the federal government’s penchant for regulatory intrusion? Is there even interest in extracting and utilizing Alaska’s vast wealth for anything but fueling ever-larger government? Some might scratch their heads.
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