Two of Rio’s large institutional investors had asked the mining company in December to divest its stake in the mine because they believed “the reputational risks [to Rio Tinto] now outweigh its market valuation.” The EPA ruling settled the deal.
Rio has now donated its full stake to local Alaskan charities, the Alaska Community Foundation and the Bristol Bay Native Corporation Education Company. Rio Tinto’s CEO said:
By giving our shares to two respected Alaskan charities, we are ensuring that Alaskans will have a say in Pebble’s future development and that any economic benefit supports Alaska’s ability to attract investment that creates jobs.
According to Northern Dynasty, the Pebble deposits are one of the largest ever discovered, comprising a measured and indicated deposit of 5.94 billion metric tons of copper, 67 million ounces of gold and 3.3 billion pounds of molybdenum. Studies also infer an additional 26 billion metric tons of copper, 40 million more ounces of gold and 2.3 billion pounds of molybdenum. Silver, palladium and rhenium are also present.
The EPA ruling prevents the Army Corps of Engineers from approving Northern Dynasty’s application to begin work. The EPA is beginning a review of the potential impact of the company’s proposed Pebble Mine on the sockeye salmon fishery in Alaska’s Bristol Bay.
The EPA released an assessment of mining impacts on Bristol Bay in January that “documents the significant ecological resources of the region and the potentially destructive impacts to salmon and other fish from potential large-scale copper mining in the Pebble deposit.” The study indicated that the proposed mine would “likely cause irreversible destruction of streams that support salmon and other important fish species, as well as extensive areas of wetlands, ponds, and lakes.”
Given the current downward trend in gold prices and the precarious status of the proposed Pebble Mine, Rio Tinto is probably not giving away much of value.
Rio Tinto stock opened higher Tuesday morning, at $56.04 in a 52-week range of $39.14 to $60.61.
Northern Dynasty’s shares closed down 7.6% Monday, at $0.878 in a 52-week range of $0.80 to $2.93.
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