Pebble Mine - Mining Market / Economics

Mining Market / Economics

Pebble is the largest (known) undeveloped copper ore body in the world, measured by either the amount of contained metal or the amount of ore.

Northern Dynasty Minerals, Ltd. estimates that Pebble contains over $300 billion worth of recoverable metals at early 2010 prices.

A report released by Northern Dynasty in early 2011 predicts profits for mine owners if a large scale open-pit mine is built at Pebble, given certain assumptions about the; cost of building the mine ($4.7 billion), size of the mining operation (200,000 tons per day), years that the mine will operate, metal prices over the life of the mine, as well as particulars of the mine design plan. The study assumes a slurry pipeline will deliver ore concentrate from the mine to a new port on Cook Inlet, and that there will also be trucks hauling ore concentrates to Cook Inlet. For a 45-year mine life with current copper, gold, and molybdenum prices the mine is expected to; return the initial capital investment (i.e. pay for itself) in 3.2 years, employ over a thousand people for the first 25 years, and provide a 23.2% pre-tax internal return on investment for the 45 year period. Expected pre-tax cash-flow of a 45-year operating mine is approximately $2 billion per year for much of the mine life, and significantly more during the later years. The report states that 58% of the ore resource will remain at year 45, given the same assumptions.

Several prominent UK jewelers and American jewellery retailers and manufacturers have pledged not to buy gold from Pebble, should it ever be developed. This is due to the environmental impact that is characteristic of mines of this type and the sensitivity of the surrounding ecosystem.