This Massive Gold Project Is Doomed

Despite the hurdles, the lure of Pebble has been a siren song. According to IHS Global Insight, the project would create some 4,700 jobs in Alaska during construction, 2,900 during its 30-year production cycle, and an additional 2,750 through various subsequent development phases. It would create tens of thousands of additional jobs in the lower 48 while producing $2.4 billion annually to the economy and $9 billion in new state and federal tax revenues.

The mine itself has the potential to produce as much as 55 billion pounds of copper, 67 million ounces of gold, and 3.3 billion pounds of molybdenum during its nearly 80-year life. It would have become the world’s biggest open-pit mine, but that seems to be in jeopardy as Northern Dynasty doesn’t have the financial wherewithal to alone pay for the project.

The miner has said it will soldier on with permitting but will undoubtedly need to find a new partner if it ever hopes to finish the process. While Anglo American will pay a $300 million breakup fee, that’s small solace to Northern Dynasty, which lost a third of its market value on the news.

With environmentalists, industry, and the regulatory apparatus arrayed against it, the Pebble project seems to be one filled only with fool’s gold now. Its only hope for salvation is sustained recovery in the price of gold, which would make it a more tenable project to wage battle over.

The article This Massive Gold Project Is Doomed originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool owns shares of Vale and Sturm, Ruger.

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