JUNEAU, Alaska (AP) — The chief financial officers of New York City and the state of California have asked Rio Tinto plc to sell its shares of the company behind the proposed Pebble Mine project in southwest Alaska.
New York City Comptroller John Liu and California State Controller John Chiang said they oversee pension funds that are substantial, long-term shareowners in London-based Rio Tinto. The company owns a 19 percent share of Northern Dynasty Minerals Ltd., which recently assumed full ownership of the mine project.
The financial officers, in a letter dated Thursday to Rio Tinto CEO Sam Walsh, said they found the company’s response to their concerns about the project’s possible legal and regulatory risks perfunctory. They also said there were risks to Rio Tinto’s reputation for being associated with Pebble, a massive gold-and-copper prospect near the headwaters of a world-premier salmon fishery in Alaska’s Bristol Bay region.
They said they believed those risks outweighed the market value of Rio Tinto’s shares in Northern Dynasty.
The company didn’t immediately respond to a request for comment Friday.
Last month, the financial officers wrote to Walsh, saying Pebble would have “significant environmental and social impacts” that pose legal, regulatory and reputational risks for any company pursuing it. They asked that Rio Tinto conduct and release a comprehensive review of the risks involved.
“In our view, the investment in the Pebble Project presents undue risk not only to the long-term sustainability of the Bristol Bay region, but also to the long-term value of our investments in Rio Tinto,” they wrote in the Nov. 4 letter.
A Rio Tinto executive, Jean-Sebastien Jacques, responded that his company continued to encourage “a responsible approach” to developing the project. He said his company’s position has been that it will only participate in Pebble if it can be built, run and closed in a way that protects water, fisheries and wildlife “in perpetuity”; meets Rio Tinto standards for health and safety, cultural heritage, environmental protection and community relations; and ensures compliance with laws.
“I can assure you that we understand and take very seriously our responsibilities regarding Pebble, and indeed any project or operation in which Rio Tintois involved,” Jacques wrote.
Northern Dynasty recently took full control of the project after Anglo American PLC pulled out. Anglo American CEO Mark Cutifani had said the decision followed a review of his company’s backlog of projects. He also said Anglo American’s focus has been on prioritizing money for projects with the highest value and lowest risks within its portfolio.
Pebble critics, however, sought to cast the departure as a sign that the controversial project was in trouble.
Northern Dynasty has vowed to press on and look for a new partner.
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