First Quantum agrees to option on Pebble Project
Miner First Quantum Minerals announced that is has signed an option agreement with Northern Dynasty Minerals in which First Quantum will pay $150 million over four years to help fund the permitting process for Northern Dynasty’s Pebble Project in Alaska.
The Financial Times reported that the move could net First Quantum a 50 percent stake in the project, the world’s biggest undeveloped copper project.
The agreement gives the company the right to a 50 percent stake in the project after a further $1.35 billion investment, the company said. The pact comes amid signs the administration of President Donald Trump could take a more favorable stance toward the project. Located in Alaska’s Bristol Bay, a center for salmon fishing, the Pebble Project came under environmental scrutiny under President Barack Obama.
In October, Scott Pruitt, current administrator of the U.S. Environmental Protection Agency (EPA) directed his staff to withdraw a plan to protect the watershed of Bristol Bay.
“We believe a successful outcome to the permitting process for Pebble would deliver the potential for further growth in copper for First Quantum well into the future,” Philip Pascall, chairman and chief executive of First Quantum, said.
Mining companies are scrambling to increase their exposure to copper as analysts forecast a deficit of the metal by early in the next decade. Both Rio Tinto and Anglo American have previously had stakes in the project before selling out. The agreement is expected to be finalized in the second quarter of 2018, First Quantum said.