The Economics behind the proposed Pebble Mine
Implementing the pebble mine would lead to guaranteed destruction in Bristol Bay, hindering that region's current geoeconomic status. However, could it economically make sense for the Pebble Mine to be put into place? Even though it would most likely mean the destruction of that region's salmon production, and other revenue streams, surrounding the salmon. Bristol Bay salmon provides the foundation of a robust, renewable, and sustainable economy, including commercial, sport, and subsistence fishing; sport and subsistence hunting; and recreation and tourism—generating $2.2 billion annually and more than 15,000 jobs. (Heimer, 2021)
However, the Pebble Mine has its own financial reapings to be had “The current market value of the Pebble deposit is greater than $300 billion, using 2013 estimates of recoverable metals and July 14, 2014 metal spot prices.” (Higman et al. 2019). With the main precious metals extracted being copper and gold. In May 2013, Northern Dynasty Minerals released an economic impact study indicating the Pebble could increase the U.S. copper production by 20%. This study further estimates that, over a 29 year period, the mine would support 15,000-16,000 nationwide jobs and generate roughly $1 billion in government revenues. The majority of the jobs and revenues would be realized in lower 48 states. (Higman et al. 2019). Also, construction costs could range anywhere from the mid to high single digit billions.
So, let’s say the jobs roughly offset, then what are we left with? According to Northern Dynasty, the lifetime of the mine would be around 45 years, meaning the proposed mine would have pumped around six to seven billion dollars into the American economy over a 45 year period. However, currently Bristol Bay’s salmon, outdoors, tourism, etc. generate 2.2 billion annually. Meaning a running surplus of around $4.5 billion annually, for the next 45 years. That being said, as we can see by the graph below, at one point or another leaving Bristol bay untouched will prove more beneficial financially than adding the pebble mine. Also, it must be noted that the harvesting of copper and gold ore could lead to a decrease in price in those specific assets, which could potentially make the $300 billion in mineable ore worth only $250-270 billion.
Socially, the mine would be a hard sell for any lobbyists in support of the proposed pebble mine. As mentioned above most of the 15,000 jobs would go to people from the lower 48, leaving a lot of Alaskans out of jobs, which could weigh heavily on that economy, as it is already quite fragile. Plus, you are talking about getting rid of the natives and Alaskans subsistence culture. “Some 7,500 people live in the Bristol Bay region, the vast majority of them Alaska Natives. For thousands of years, the primarily Yup’ik Eskimo, Alutiiq and Athabaskan tribal members of Bristol Bay have typically consumed over 500,000 pounds of wild salmon annually.” (“Save Bristol Bay”, 2024). It is hard to look past erasing more than half of a population's diet for a slight bump in overall output of the U.S. Economy. “Wild salmon comprising 52 percent of the average Native family’s diet” (“Save Bristol Bay”, 2024)
That being said, we cannot look past the idea that while currently self-sustaining, climate change’s current pace may eradicate the salmon runs before we reach the intersection point between mining and leaving the area untouched. In my eyes it really just depends on how short-term oriented of an individual you are. Interjecting my personal opinion, as of now given the U.S’s GDP being $25 trillion, the extra $4.5 billion is not enough to condone the destruction of the Bristol Bay area, and one of the most impressive fisheries in the world.
What do you think?
