Two Outside mining companies partner on Pebble project

Northern Dynasty, Anglo American plan 50-50 venture

Posted: Thursday, August 02, 2007

ANCHORAGE - The Canadian company that owns the Pebble Mine prospect has partnered with a London-based company to develop the mine in Southwest Alaska.

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Mining giant Anglo American has joined Northern Dynasty Minerals Ltd., in a 50-50 joint venture, Northern Dynasty announced Tuesday. The company said it will pump up to $1.425 billion into the gold and copper project.

The agreement means that the Pebble project near Iliamna will have new leadership composed of executives from Anglo American and Northern Dynasty Minerals. However, it will not change the ownership of Pebble from Northern Dynasty, though both companies will have equal rights in developing the deposit.

If it is developed, Pebble could become one of the world's largest mines. Controversy about the project stems from its location - at the headwaters of two rivers that feed Bristol Bay, one of the world's biggest salmon fisheries. The project faces intense opposition from environmental groups, fishermen and some villages in the Bristol Bay region.

Anglo was formed in South Africa. Last year, it earned $6.4 billion in profit on $33 billion in revenue. It has operations in 45 countries, spanning Europe, Africa, Australia, North and South America and Asia. In North America, Anglo owns two Canadian diamond mines and the Cripple Creek & Victor Gold Mining Co. in Colorado.

Anglo is involved in two large copper mines and is developing others as well, said Bruce Jenkins, Northern Dynasty's chief operating officer.

Anglo and Northern Dynasty said they will create a new company to explore and develop Pebble. Jenkins said the company will be based in Anchorage and its chief executive will live there.

The companies signed their agreement Tuesday after notifying regulators.

Anglo has committed to spending $125 million to finish a pre-feasibility study for the mine, targeted for the end of next year.

To retain its 50 percent partnership, Anglo will then have to commit $325 million for a feasibility study, targeted for 2011. If a decision then is made to develop a mine, Anglo must commit $975 million to build it.

The companies said Tuesday their targeted production start date at Pebble is 2015, though they will have to acquire state and federal permits.

Many observers had anticipated that Northern Dynasty would partner with Rio Tinto, another London-based mining giant, which already owns nearly 20 percent of Northern Dynasty.

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