News Article

May 30, 2013

Pebble’s Estimated $1 Billion in Annual Operating Costs Could Define a New Economic Engine For Alaska

Economic Impact Study Cites Potential for 15,000 AK & U.S. Jobs During Operations

Anchorage, Alaska, May 30, 2013 -- Development of the Pebble copper deposit could have significant economic impacts to the state of Alaska including an estimated $136 to $180 million in annual taxes and royalties, annual expenditures that could place the operation among the top tier companies in the state, and an estimated 600 percent increase in new tax revenue for the Lake & Peninsula Borough according to an extensive report by IHS Global Insight, a leading global source of critical information and insight.

Among the key findings of the report commissioned by the Pebble Limited Partnership, are that the copper, gold and molybdenum mine could support more than 16,000 jobs nationwide during construction, including nearly 5,000 jobs in Alaska alone during that time frame with an average annual wage of $63,500 per year. Pebble operations could support nearly 15,000 jobs in Alaska and the Lower 48; and potential subsequent development phases could support more than 16,000 jobs nationwide.

“Pebble is a substantial multi-billion dollar state asset as shown by this report, which provides great insight regarding the long-term positive economic impacts the project could have for the region, state and the Lower 48,” said Pebble CEO John Shively. “For perspective, the report indicates Pebble development alone would pay more in annual taxes to the state than the entire fishing industry combined. This clearly shows Pebble development could be an important economic driver for Alaska’s future.”

The IHS Global Insight study is based on a conceptual mine plan using an iteration of the ongoing engineering work undertaken by the Pebble Limited Partnership. The study estimated the state and national economic benefits associated with a five-year construction phase, followed by a 25-year production phase, and the potential for three subsequent 20-year development phases. Currently, scientific studies and engineering work continue related to the deposit, and no final project design has been selected or approved at this time by the Pebble Partnership.

“While we are still finalizing our initial development plan for Pebble, this starts to give us some context about the project from an economic perspective. We are continuing our work on the environmental package for the mine which is one of most critical design elements. We look forward to sharing our plan with Alaskans later this year,” said Shively.

Economic benefits for the state of Alaska as defined in the IHS report are outlined in the table below.

Tabular Data

National economic benefits as defined in the IHS report are outlined in the table below.

Tabular Data

1 Indirect jobs are those supported in sectors providing supplies and services to the Pebble Project. Induced jobs are those supported in sectors benefitting from the spending of Pebble direct and indirect employee wages.

2 The IHS Global Insight study forecasts a range of GDP and government revenue impacts associated with future development of the Pebble Project based on two different long-term metal commodity price forecasts.

Construction of the mine will require a capital investment of more than $1.2 billion annually in direct spending over a five-year timeframe. Construction could generate an additional 2,500 jobs related to the mine site and nearly 1,000 jobs with suppliers and other industries. Spending from mine workers during the construction phase could support another 1,275 induced jobs in Alaska.

Once the mine is constructed, it could provide approximately 2,900 operating jobs, of which 915 will be at the mine. Pebble workers on-site could earn approximately $109,500 per year on average, according to the report, with about 75 percent of the workers expected to be Alaska residents. Pebble operations could contribute $1.1-$1.4 billion annually to gross state product (GSP) during the 25 year operation evaluated by IHS Global Insight.

From the perspective of taxes and royalty payments to the state, IHS reports these will range between $136 million and $180 million per year. Although oil taxes and revenue account for 90% of the state budget, Pebble would make important contributions to the state treasury and to the Permanent Fund because the deposit is located on state of Alaska land.

Based upon the severance tax structure for the Lake and Peninsula Borough, the report estimates Pebble could contribute approximately $29-$33 million annually to the borough for an estimated $725-$825 million during the initial production phase for the project.

“What is critical for us is that Pebble does provide a major positive impact in the region and in Alaska,” Shively said. “At the local level, Pebble could provide a dramatic increase in potential revenues to the borough. This sort of project can create an economic transformation in a region that currently faces economic challenges, due largely to a serious lack of year-round jobs.”

The Pebble deposit is located in Southwest Alaska about 200 air miles from Anchorage and 100 air miles from Bristol Bay, on state lands set aside for mining.

IHS Global Insight is one of the leading economic analysis and forecasting firms in the world. IHS has been in business since 1959 and has a track record for providing rigorous, objective forecast analysis and data to governments and business across the world.

Mike Heatwole, Pebble Partnership, (907) 339-2600
Jim Dorsey, IHS Global Insight, (781) 301-9069

To access a full version of IHS Global Insight’s report The Economic and Employment Contributions of a Conceptual Pebble Mine to the Alaska and United States Economies, visit

Link here for a Pebble deposit economic infographic


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