MINING group Anglo American has pulled out of the Pebble copper-gold project in Alaska, less than two months after pledging to halve a $17bn (£10.7bn) pipeline of potential mines and bring down the cost of keeping future options open.
The decision, announced yesterday, leaves junior exploration company Northern Dynasty to push ahead alone with the plan to develop one of the largest copper-gold deposits in the world – but also a hugely environmentally challenging project that has already been studied for almost three decades.
Anglo said it would record a $300m impairment on a post-tax basis after pulling out.
The decision is unlikely to come as a shock to investors, but confirms new chief executive Mark Cutifani’s ambition of tackling lagging returns and what he called in July a “constipated” pipeline of future mines.
He promised then to cut spending and slash costs like the annual $950m spent keeping afloat early stage projects like Pebble. That number alone will come down by a third, the company said at that time.
Anglo, like many others in the industry, has been heavily criticised for its execution of complex projects to build mines from scratch – so-called greenfield projects. Its Minas Rio iron ore mine and port in Brazil has been hit by repeated delays and cost overruns.
Pebble, some 200 miles (320 km) southwest of Anchorage, could be similarly challenging.
It is one of the largest new discoveries of recent decades, during which fewer and fewer potential new mines have been uncovered. It could also be one of the world’s largest open-pit copper-gold mines, and defenders argue it would be a much-needed economic boon for the region.