Don't call Alaska's Pebble project isolated

Stephen Hodgson, vice president of engineering for Northern Dynasty Mines Inc., says he often hears people who don't live in Alaska talk about the isolation of his company's Pebble mine prospect, but he doesn't consider Pebble to be isolated at all.

"Pebble is probably one of the least isolated major copper projects in the world," he said. "We're at low elevation, about 815 feet above sea level, and only 85 miles from tidewater."

Northern Dynasty's Pebble gold-copper-molybdenum deposit, near Iliamna in southwestern Alaska, is close to concentrate markets in Asia. Hodgson told an audience at the Pac Com conference in Anchorage Feb. 23.

"It's a big advantage for us," he said. "Alaska offers that advantage, not a disadvantage."

The company's recent discovery of a rich zone of mineralization east of its originally proposed open pit mine has entirely changed the way the company is looking at its project, Hodgson said.

"Because of the discovery of Pebble East, all of our concepts about how we are going to develop the project are undergoing a lot of rethinking" he said. "Pebble was already a significant mining project, but with Pebble East it became part of some pretty elite company."

Adding the east zone to the original resource makes a much larger mine possible, Hodgson said.

"We put about 22 drill holes into it last year and outlined 1.8 billion tons based on a cutoff rate of .6 percent copper equivalent, but to put it more simply Pebble East has added about 50 percent more gold to our resource and doubled the amount of copper," he said, adding that the east zone appears richer than the earlier discovery to the west.

"More important than size is the fact that it contains twice the value per ton that Pebble West does, and that gives us some opportunity to look at things that we didn't have the opportunity before and this is the reason why were deferring the completion of our feasibility study."

Plan for plant on plateau

Pebble's current plan calls for a crushing and processing plant to be located on a plateau above the proposed pit.

"Pebble ore would be fed to a plant and upgraded from about half a percent copper or less that it is in the ground, to a concentrate containing about 25 to 30 percent copper," Hodgson said. "The plant as we currently have it laid out would process about 250,000 tons per day."

Hodgson sad the ore would be taken out of the pit and crushed to about six inches in size and fed with water into two parallel semi-autogenous mills, each 44 feet in diameter, containing thousands of steel balls.

The ore would be crushed down to one-half inch in diameter, and ground to talcum powder size suitable for the floatation process.

Hodgson said in floatation, three sets of additives are mixed with the ore. One conditions slurry to enhance the separation of minerals. Another additive creates the bubbles of the froth. A third additive - a long polymer - has one end that adheres to the copper mineral, and another end that is hydrophobic and repels water. When mix air is blown into the tank, the polymer sticks to the bubbles and floats to the top. Copper, the heavy mineral, is bonded with the polymer and actually floats to the top.

Molybdenum is separated in a similar, separate process.

"What is left other than the concentrate is sent out to the tailings pond in two streams. The first is about 80-90 percent of the material that is fed into the plant - we've found that to be benign," he said. "The second is potentially reactive, and that will be stored underwater to preclude that reaction from happening."

As much as 70 percent of the gold from the raw ore will end up in the concentrate, he said.

Non-reactive rock is used to construct the impoundment structures at either end of the valley, Hodgson said

"As we currently designed it, through the operation we don't plan on discharging water," he said.

Electricity needed

The power needs for a mine of this size are substantial. Hodgson said the operation would draw 275 megawatts, actually requiring about 300 megawatts after factoring in line losses.

In 2005 the company developed a joint venture arrangement with Homer Electric to investigate how to provide power to the mine.

Currently the companies have chosen a plan that calls for installation of three 130-megawatt natural gas fired generators at Nikiski, across Cook Inlet from the proposed Pebble port site, Hodgson said. Two generators would operate continuously, and another would be on standby.

"The reason we picked Nikiski is that is a brown field site, making it easier to permit," Hodgson said. "There's gas supply already to Nikiski and there's also an LNG port."

The companies see the Nikiski liquefied natural gas export plant operated by ConocoPhillips as a potential source of supply if gas supplies become scarce from Cook Inlet fields; a move that would require the LNG plant to be converted into an import facility.

"There's lot of discussion in Anchorage about the potential for the Cook Inlet fields to deplete," Hodgson said. "With the LNG export facility at Nikiski, the possibility exists to import gas to Nikiski and fire the station from there.

"The next step is to build a 230 megawatt transmission line to Anchor Point, connect it into the existing grid on the Kenai, build 45 miles of parallel submarine cable, and then 120 miles from the western coast of Cook Inlet to the site - four miles of which is submarine cable, the rest is all overland transmission."

The power situation is being further assessed, Hodgson said, adding that many options have been studied.

Pebble logistics

Hodgson said the logistical challenge, and the scale of Pebble development is massive, but lessons can be learned from previous projects in Alaska.

"In many ways Pebble has attributes parallel to other large projects that Alaskans have successfully built," he said. "The process plant is akin to that at Red Dog, and Pebble has similar access and product handling issues, however the scale is more comparable to that of several projects on the North Slope."

Hodgson said Northern Dynasty has four major considerations to keep in mind for Pebble logistics.

First, access must be established quickly.

"Pebble is a green-field site, and we need to establish access as quickly as possible to minimize the overall project schedule," he said.

Second, the length of the construction season must be maximized.

It is also important, given the comprehensive construction plan, and construction quantities, to obtain continuous access or as close as we can to that," he said. "We do have seasonal constraints but we anticipate that we can get at least 11 months access to the port."

Third, project components will be spread over 100 miles between the mine, the port and across Cook Inlet to the Kenai Peninsula. The large mine and its components require extensive re-supply.

Finally, the environment and residents of the area must be kept in mind, and incorporated into plans for the mine, Hodgson said.

Hodgson said during constructions materials could be staged at the Port of Homer, on the east side of Cook Inlet, or at Kodiak Island, then barged across the inlet to the Pebble port.

Services into Iliamna

The company has benefited from the airport as well as the existing roads and barge service at Iliamna.

"We can take advantage of the excellent airport facilities at Iliamna," he said. "Two cross 5000-foot strips are capable of handling planes as large as Hercs, and small jets."

Northern Dynasty has conducted exploration with helicopters from the Iliamna airport for the last four years, Hodgson said, adding that the contractor used existing barging service and roads to mobilize to Iliamna.

"We believe that a similar approach will allow us to establish a beachhead here and commence construction along the road while we are establishing a permanent port," Hodgson said.

In addition to the significant quantities of materials to build and operate the mine, there will be numerous pieces of equipment 100 tons or larger to move, he said.

"We have operating supplies like bulk fuel and processing chemicals that require special handling, and the concentrate, besides the value, must also be handled carefully from an environmental perspective," he said.

In its current design the mine will need 140,000 tons per year of lime. One option the company is exploring for lime would be to haul it in 30,000-ton or 40,000-ton bulk carrier ships, to be broken into smaller barge loads at Homer or Kodiak.

The company is also looking for lime in the area. Several Native corporations have potential lime sources in the area of the mine and the company is investigating that possibility, Hodgson said.

If ore concentrates are sent to port by pipeline, the water return line could potentially be used to transport lime to the mine, Hodgson said.

Northern Dynasty is proposing to build two eight-inch pipelines in a trench, one bringing concentrate to the port, while the other carries the filtrate water back to the mine.

A concentrate pipeline isn't a given, however. The company is continuing to evaluate concentrate haulage as an option.

Road haulage may be just a part of the concentrate transport plan. An icebreaking ferry is a possibility to potentially eliminate sections of the road, Hodgson said.

A transportation study last year identified a number of options to solve needs for construction transport, re-supply, and ore concentrate shipping.

"We'll assemble the final configurations by fitting the components together like Lego bricks," Hodgson said.