Northern Dynasty Minerals Ltd. plummeted Friday after the collapse of a pact with First Quantum Minerals Ltd. to finance the controversial Pebble mining project in Alaska.
The two companies were unable to reach an agreement on a proposed deal disclosed in December, Northern Dynasty said Friday in a statement. The arrangement would have given a unit of First Quantum an option to earn a 50 per cent interest in Pebble in return for $150 million paid over four years to fund permitting.
The project at one of the largest copper and gold deposits has been fraught for years. Effectively banned by the U.S. Environmental Protection Agency under President Barack Obama, shares of Northern Dynasty surged after Donald Trump’s election victory. The shares climbed further in January 2017 during nomination hearings for Scott Pruitt, a climate-change skeptic, to become head of the EPA.
Since then, the stock has slipped. Earlier this month, opponents disrupted First Quantum’s annual general meeting in Toronto and took out a full-page ad in the Globe and Mail vowing to continue fighting the project. Critics have said the Pebble project would harm indigenous communities and the world’s largest sockeye salmon fishery.
One of the opponents of Pebble, the Natural Resources Defense Council, said it hoped First Quantum’s decision closes the door “on this ill-conceived and uniquely reckless scheme.”
“There is no more widely condemned project anywhere in the world today, and now it’s time for Northern Dynasty to walk away,” Joel Reynolds, NRDC’s western director, said in an e-mailed statement.
The environmental group Earthworks also applauded First Quantum’s decision.
“It is to First Quantum’s credit, and good news for First Quantum shareholders, that their leadership listened to Pebble’s overwhelming opposition including Alaska Natives, commercial and recreational fisherman, jewellers, churches, among others,” Bonnie Gestring, the group’s northwest program director, said in an e-mailed statement. “We hope First Quantum’s decision convinces EPA to follow through on its initial plan to protect the Bristol Bay watershed from industrial scale mining.”
Northern Dynasty dropped as much as 37 per cent Friday in New York, and traded down 25 per cent at 53 cents as of 11:02 a.m. First Quantum fell 3.7 per cent to C$20.03 in Toronto.
– With assistance from Natalie Obiko Pearson