New York Wants to Divest From Planned Pebble Copper Mine Project

Feb. 7, 2018, 7:44 PM

Another investor in a planned Alaska gold and copper mine is now calling on the mine’s financial benefactor to rethink its investment.

New York’s state comptroller has joined California’s state treasurer in strongly questioning the Pebble Mine project on environmental grounds.

Commercial and sport fishers, environmental advocates, and conservationists “have all raised concerns regarding the negative effects the project could have on the Bristol Bay fisheries and the consequent effects on wildlife and the culture of indigenous peoples in the region,” Comptroller Thomas DiNapoli wrote in a Feb. 6 letter.

The letter was sent to Vancouver-based First Quantum Minerals Ltd., a prominent investor in the Pebble Mine. First Quantum announced a framework deal last December that could deliver $150 million in funding to the mine. The first $37.5 million payment has already been made.

The New York fund holds 161,407 shares of First Quantum, worth some $2.5 million.

‘Biggest Undeveloped Copper Deposit’

The divestment calls won’t stop the project, because of more powerful economic currents, John Tumazos, an independent analyst in Holmdel, N.J., who monitors the Pebble project, told Bloomberg Environment.

“This is the biggest undeveloped copper deposit in the world,” he said. “If the world needs the copper, the price of copper might rise until this is economic.”

The New York and California calls for divestment, however, could exert enough political pressure on the company to change its mine plan to one that doesn’t use an open pit and thus creates less pollution, Tumazos said.

Pebble: No Understanding of Project

First Quantum didn’t respond to an interview request. Last month, Clive Newall, the company’s president and director, told Bloomberg Environment that First Quantum’s option “will only be exercised if the project is economically, environmentally, and socially sound and has the support of stakeholders.”

Mike Heatwole, a Pebble spokesman, called DiNapoli’s letter “another classic case of an organization or individual taking an action without a comprehensive understanding of the project.”

Neither DiNapoli nor California State Treasurer John Chiang, who in late January flatly called for First Quantum to pull out of the Pebble project, has reached out to Pebble or responded to offers to provide more information about the project, Heatwole told Bloomberg Environment.

“Rather, they seem to prefer to do the bidding of environmental activist groups who want to prevent us from a full and fair review via [the National Environmental Policy Act‘s] environmental impact statement process,” Heatwold said. “Ironically, environmental groups call NEPA the Magna Carta of U.S. environmental law. Yet they work overtime to keep us from it. Our door remains open to provide a full briefing about the project.”

Last week, VanEck Associates Corp., which holds more than $180 million of First Quantum stock, told Bloomberg Environment that it was standing by the project.

Environmentalists Hail Letter

Environmentalists, however, viewed DiNapoli’s letter as a sign that support for Pebble Mine is cratering.

“This is the latest public denunciation of the Pebble project by a major shareholder of First Quantum, and by a national leader in sustainable investment,” Joel Reynolds, Western director at the Natural Resources Defense Council, told Bloomberg Environment.

DiNapoli also pointed to a watershed 2014 Environmental Protection Agency assessment finding that the mine would significantly harm fish populations and that a dam failure could be “catastrophic.”

Representatives of other institutional investors—including the Capital Group Companies Inc. and SailingStone Capital Partners LLC, the two biggest institutional investors in First Quantum—haven’t commented to Bloomberg Environment about their holdings.

The U.S. Army Corps of Engineers announced Feb. 5 that it selected engineering firm AECOM to prepare an environmental impact statement for the mine.

To contact the reporter on this story: Stephen Lee in Washington at stephenlee@bloombergenvironment.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bloombergenvironment.com

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