HUDBAY MINERALS: PLANS TO APPEAL COURT RULING AGAINST ROSEMONT / 5 Geotech_Earlug_2016_Alt2.pdf 1 2016-06-24 4:27:20 PM
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Glencore to mothball Mutanda DRC Northern Dynasty Minerals’ Pebble copper project in Alaska. NORTHERN DYNASTY MINERALS
Northern Dynasty seeks EIS, permitting for Pebble after ‘milestone’ EPA decision COPPER-GOLD
| U.S. EPA removes Obama-era regulations
BY BRENDA BOUW
T
Special to The Northern Miner
he U.S. Environmental Protection Agency (EPA)’s decision to remove proposed restrictions on mining operations in Alaska’s Bristol Bay is being called a “massive de-risking event” for Northern Dynasty Minerals’ (TSX: NDM; NYSE-AM: NAK) Pebble project. The move could also improve the Vancouver-based company’s chances of finding a partner to build the mine, which the company describes as the “most significant underdeveloped copper and gold resource in the world.” In late July, the EPA removed a proposal started by the Obama administration in 2014 under Section 404(c) of the Clean Water Act that effectively stalled the Pebble project. The proposed limitations were never legally finalized. The decision doesn’t guarantee the U.S. government will issue a permit for the Pebble project, but removes a major barrier and overhang on the company.
In an interview with The Northern Miner, Northern Dynasty president and CEO Ron Thiessen described it as “a big psychological bonus for us in the marketplace.” He said the move could make it easier for Northern Dynasty to secure an investment partner for the project. “We’re likely not to do it on our own,” Thiessen said, adding that his company specializes in discovering and permitting mines, and bringing on developers. “It’s a different skill set to build a mine … and another skill set to operate a mine.” In the July 30 release, Northern Dynasty called the EPA move “one of a series of important milestones” to help get the mine approved. Thiessen said the announcement means the Environmental Impact Statement (EIS) and permitting process for the Pebble project, currently led by the U.S. Army Corps of Engineers, may advance “without the cloud of uncertainty created by EPA’s unprecedented, pre-emptive regulatory action.” In the interview, Thiessen said
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the Trump administration is simply following the “proper permitting process, while the Obama administration was trying to usurp [it],” based on “an environmental agenda.” The controversy has largely been around the protection of Bristol Bay, home to the world’s largest salmon run. Project opponents such as the United Tribes of Bristol Bay (UTBB), a consortium of 15 tribal governments, have called Pebble a “toxic project” that would “destroy the world’s last great sockeye salmon fishery for the project of a foreign mining company.” In the meantime, project proponents considered the Obama-era restrictions to be an unfair veto of the mining project based on outdated assumptions about the mine design and its risks. Northern Dynasty said Pebble is located on state land in southwest Alaska designated for mineral exploration and development, and that the Obama-era EPA sought to veto the Pebble project before it could be proposed, or an EIS permitting process undertaken. The EPA said it would now focus on the permit review process for the Pebble project. The decision “restores the proper process for 404(c) determinations, eliminating a pre-emptive veto of a hypothetical mine, and focusing EPA’s environmental review on an actual project before the agency,” EPA general counsel Matthew Leopold said in a July 30 release. In a July 30 note, Cantor Fitzgerald analyst Mike Kozak described the EPA move as a See NORTHERN DYNASTY / 2
| Low prices, high taxes make world’s largest cobalt mine uneconomic BY TRISH SAYWELL tsaywell@northernminer.com
L
ow cobalt prices and higher taxes under the new mining code in the Democratic Republic of the Congo have combined to make Glencore’s (LON: GLEN) Mutanda cobalt and copper operation uneconomic, the company says. Mutanda — the world’s largest cobalt mine — will transition to care and maintenance by year-end. Last year the mine produced 27,000 tonnes cobalt (20% of the world’s supply of the metal) and 200,000 tonnes copper. “The suspension of Mutanda should put a f loor under cobalt prices, given the extent of production removed from the cobalt market, which is likely to make purchasers nervous,” BMO analyst Colin Hamilton says in a research note to clients. “Indeed, this effectively removes the surplus we have in the cobalt market over the next couple of years.” Stratfor, a geopolitical intelligence publisher based in Texas, notes that “new mines in different countries will likely come online in the future, but for the moment, companies that deal in cobalt have few other options than accommodating the hard-line government in Kinshasa that looks to squeeze as much advantage as it can from its current supply stranglehold.” Stratfor also points out that pressure has been mounting on Glencore’s operations in the DRC for more than a year. “These include international criticism over Glencore’s association with Israeli businessman Dan Gertler, who has been sanctioned by the U.S.; legal battles between Glencore and state-owned Gécamines; the country’s new mining codes and its tenfold increase in royalty taxes on cobalt; and recent security issues at its mines. Even though longtime President Joseph Kabila left office after the elections that
named his successor, a fraction of the Congolese government loyal to him has maintained control over the mining sector, indicating that the country’s mining strategy is unlikely to change.” Longer term, the decision to put Mutanda on care and maintenance and conditions in the DRC may also impact the future composition and mix of metals used in the battery sector. (Cobalt is a component in lithium-ion batteries.) “Sustained higher prices or the departure of other cobalt producers from the DRC would benefit the battery makers that have strategically begun to move away from cobalt,” Stratfor notes. “Chinese battery manufacturer CATL, for example, reported they started producing lithium-ion batSee GLENCORE / 2 PM40069240
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