SUSTAINABLE MINING

Can one of the world's most powerful women tame the Pebble controversy?

Anglo American’s Cynthia Carroll outranks even media giant Oprah Winfrey on Forbes’ “100 Most Powerful Women List.” But, does she have what it takes to get Alaska’s Pebble project permitted?

SAN FRANCISCO - 

When was the last time a mining CEO outranked Oprah on the Forbes lists for a combination of international business clout, sustainable development expertise, and EQ quotient?

Ranked 7^th on this year's Forbes "100 Most Powerful Women List," headed by the Chancellor of Germany and ranking just behind India's Sonia Gandhi is American Cynthia Carroll, the President and CEO of Anglo American Corporation, who just may be the antidote to help heal the lightning-rod of controversy that has surrounded Northern Dynasty's Pebble copper-moly-gold project in Alaska.

Carroll shattered the glass ceiling of international mining as the first female CEO to head a mega-mining company, specifically with deep South African roots. In an industry, which barely allowed women to work underground a couple of decades ago, Carroll's appointment is a substantive indicator of change in mind-set among international miners.

At the time Carroll's appointment was announced a year ago, Anglo American Chairman Mark Moody-Stuart cited her "clear leadership and communication skills, her highly relevant hands-on operational experience and of her record of working with governments and other key stakeholders."

Carroll also hails from Canada's Alcan, where as President of the Primary Metals Group, she had to convince a skeptical public that smelting aluminum could actually evolve into a sustainable, environmentally clean activity. Alcan has been a member of the Dow Jones Sustainability Index for several years, is a participant in the United Nation's Global Compact, and won numerous awards and recognition for sustainability.

At the same time, Carroll helped shepherd Alcan to the highest profitability and returns in the history of the company, developing a combined $10 billion project pipeline. Her portfolio involved job creation, project development, and transcending all geographies and all aspects of sustainable development.

In an October 24 interview with Mineweb at the Business Sustainable Roundtable conference in San Francisco, Carroll said, "I am very accustomed to thinking and applying pretty rigorous methodology around that. I think it is fundamental like at Alcan, and probably even more so at Anglo because we are that much more broadly based."

"We are establishing ourselves in bigger and bigger projects, more greenfields right now in places where we necessarily haven't been," she added.

Not bad for a former petroleum geologist who spent six years in gas and oil operation in Colorado, Utah, Montana, Wyoming, and, most importantly for Pebble stakeholders, Alaska.

THE PEBBLE BROUHAHA

At the end of July, Anglo American took a 50% stake in the Pebble Partnership with Northern Dynasty, with a commitment to invest up to $1.425 billion in Alaska. Carroll recently had a series of meetings with Alaskan officials and state and federal regulators, aboriginal communities and others concerned about the impacts of the massive Pebble project.

Pebble West alone is believed to have measured and indicated resources of 18.8 billion pounds of copper, 31.3 million ounces of gold and 993 million pounds of molybdenum. The deeper Pebble East project now claims inferred resources of 42.6 million pounds of copper, 39.6 million ounces of gold, and 2.7 million pounds of moly.

Carroll said the native groups potentially impacted by Pebble were particularly pleased to have the mining company CEO meet with them directly "because of all this noise out there that is based on nonexistent facts."

She declared herself "very impressed" with the consultation Pebble partnership Northern Dynasty has been conducting in the area. Nevertheless, Carroll added, "I don't think there has been enough communication on their part. It's a small mining company. ...They don't have the global mining experience. "

During her meetings with officials and other groups, Carroll asked these stakeholders to judge the Pebble Partnership, not on words, but on actions. Exploration drilling on the project is still underway with the new Pebble management team expected to be in place towards the beginning of next year, according to Carroll.

"As an American who has worked in Alaska, spent months climbing mountains, camping, backpacking as a geologist, I can perhaps begin to understand the sensitivities of a project of this nature, located as it is near salmon streams in the Lake Iliamna area" in southwestern Alaska, Carroll recalled. Lake Iliamna is the largest lake in Alaska and one of the largest in North America. "My core message to all those with concerns about the project are that I appreciate at first hand the beauty and value of all Alaska's natural resources."

"It's not all about the mine," she told Mineweb. "It's about building an infrastructure to support the region and to support the communities-whether it relates to water supply, energy supply, infrastructure development-it will be for everybody, not just the mine."

"We are going to work as fast as we know how to continue to work on the socioeconomic studies, environmental assessments. In the meantime, we will embark on stakeholder engagement in the biggest sort of way, in a prescriptive, systematic way. We will be reaching out to everybody we can find," she declared.

"I firmly believe that the Pebble project can be developed by our partnership into a mine that goes well beyond industry standards and is genuinely world class in all we do," Carroll declared. "We will go about this in a rigorously safe manner, and set new industry benchmarks for the benefit of all Alaska, helping sustainable development in the region and beyond many years to come."

Anglo American estimates the capital cost of Pebble to range between $3 billion and $5 billion, which Carroll called, "a huge investment. It stands to bring proportionately massive economic benefits that will be felt by all Alaskans-not in the least in terms of thousands of jobs, directly and indirectly, across multiple generations."

Carroll said the life of the project could range from 50 to 100 years.

ALASKA FISHERIES

Iliamna Lake, near which the Pebble project will be situated, is noted for its sport fishing. The three primary targets of anglers in Lake Iliamna are trout, salmon, and grayling. Sockeye (Red) and Chinook (King) Salmon are consistently found in Lake Iliamna and are open to harvest under Fish and Game Regulations. Lake Iliamna also has one of only two populations of freshwater seals in the world.

The villages of Iliamna, Newhalen, Kokhanok, Pedro Bay and Igiugig lie on the shores of Iliamna Lake. The postage-sized Iliamna (population slightly over 100 people), now dependent on subsistence and sport fisheries, could find itself transformed into a mining town if Pebble is built. Two NGOs, the Bristol Bay Alliance and the Renewable Resources Coalition, have been in the forefront of a national campaign against the Pebble project. Much of the campaign funding has been coming from Bob Gillam, President of the McKinley Capital Management investment firm in Anchorage and the owner of a large vacation home in the Pebble area.

Nonetheless, Carroll insisted that Anglo American "will not be associated with the development of a mine that damages Alaska's fisheries and wildlife, or the livelihoods of Alaska communities. If the mine cannot be planned in way that provides proper protections, it should not be built."

The Pebble Partnership plans to embark on comprehensive stakeholder engagement. To go beyond compliance, Carroll hopes that "we reach a situation where proponents and critics stop talking past each other" and "really understand the concerns and motivations of all the stakeholders in the Pebble project."

"Beyond listening, we understand that this will mean not just being advocates for our own cause, but being genuinely open to thinking about how we might do things differently and incorporating the ideas we hear into our project design and community investment."

Carroll also pledged to bring in an independent panel of experts, knowable in Alaska and beyond to focus on water and water quality. The company also plans to focus on protecting and enhancing the fishery of the area, which has drawn the most media attention and public controversy.

In January 2008 the Pebble Partnership plans to launch the Bristol Bay Sustainable Fisheries Fund, which, in partnership with native peoples, local communities and other stakeholders-aims to support community-led initiatives to enhance the socioeconomic impact of the world-class Bristol Bay fishery. The fund will operate independently from the company.

"It is not just about mining. It is not just about fisheries. We can co-exist. We can live together in a very dynamic, positive, sort of way," Carroll declared. The fund will look at commercial fishing, subsistence fishing, and sports fishing, and the possible impacts of the mining project.

"We will not do this project if it's going to be damaging to the fisheries, the wildlife, their habitats and the culture background, the base of so many people. We will not!"

The actual construction of Pebble is several years away. Pre-feasibility work will not be completed until the end of 2008 at best, according to Carroll. Feasibility work would be completed at the end of 2011. Ground-breaking is planned for 2012 with production slated for 2015.

"This is a project in Alaska for Alaskans. We're not going to bring in a whole bunch of expats, or even other Americans from the lower 48," Carroll declared. "We will develop something that I think will be fantastic for that region."

FOSTERING SUSTAINABLE COMMUNITIES

Anglo American was founded in South Africa in September 1917 by Sir Ernest Oppenheimer with start-up capital drawn equally from Britain and the United States. "We have recently been through a major process of change from being a broad-based conglomerate to a focused mining company with major businesses in platinum, coal, iron ore and the base metals-in particularly copper, zinc and nickel." Anglo also holds a 45% stake in De Beers.

Anglo American is one of the largest producers of copper in the world, yielding 640,000 tons per year from multiple mines in Chile. It also has two significant copper development projects in Peru.

"My vision is for Anglo American to become the leading global mining company of choice, not only for our investors, but also the partner of choice for communities, for businesses and governments; the supplier of choice for our customers; the employer of choice for our workforce."

"For me, modern mining isn't just about delivering returns for shareholders, remote from the project site. It means working in partnership to meet local needs-whether these are in infrastructure, health care, education or business development. ..The result must be real economic opportunities and sustained benefits exercising a positive influence well beyond the lifetime of our operations."

"We believe in supporting a whole range of activities that helps deliver sustainable communities in the long term. Education and skills; language training; new business development, attractive new suppliers; promoting water conservation and clean water; protecting the aquatic habitat; delivery energy efficiency: these are all core areas for Anglo American as a modern mining company."

Anglo's South African enterprise development business, Anglo Zimele, "uses a combination of equity participation, loans, [and] opportunities to complete for contracts and business mentoring" to help entrepreneurs establish viable and sustainable business. "Thousands of jobs and dozens of companies have been created. The large majority of these have stood the test of time and are prospering in a big way. ...Anglo Zimele is supporting 46 thriving companies, giving direct employment to over 4,000 people."

The Zimele model has been expanded to Chile. "As an aspiring producer in Alaska, we see real potential in drawing on this model, perhaps with organizations like the Alaska Federation of Natives," Carroll declared. "I am told that the AFN has worked to scale international development models to foster economic development in rural Alaska, an approach with similarities to models we have developed successfully."

"Water is a key resource for mining, but we look at water issues from all angles," she said. Working through a public-private partnership at Emalheni in South Africa, underground mine water is being pumped from Anglo American colleries. The water is desalinated, cleaned and brought up to drinking standards to supply local reservoirs. "When fully operational, this project will meet some 20% of the area's daily water requirements," she added.

Carroll said she presented a keynote at the recent BSR conference-which was attended by NGOs, multinational companies, consultants, and officials from throughout the world-to raise the reputation of the industry where it belongs.

"If there's any industry that can do wonderful things for so many people around the world, it's this one. I'm not sure that they grasp it, nor embrace it, or even see it as necessary in some cases," Carroll asserted.

"I really believe in what we do, what we stand for. In all the hard work, the projects and the initiatives that I was associated with at Alcan, I have never seen anything like what Anglo does. It's phenomenal."

"We're at a different level in terms of the numbers of people we can touch, in developing countries, in those where they don't have the regulatory framework. Alcan is much more based in developed countries," Carroll concluded.