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Will the "Pebble Mine" Rock the Industry?
August 29, 2008

We may see an interesting intra-industry controversy brewing over the proposed "Pebble" gold and copper mine in Bristol Bay, Alaska.

Last week, Tiffany hosted a screening of "Red Gold,"  a compelling documentary about the issue.  The documentary definitely had a slant to it, but it was certainly enough to give me, and I would guess most people in the audience, pause about the whole project. The mine's opponents argue that its construction poses environmental risks and will destroy one of the world's greatest salmon fisheries, and with it, the Bristol Bay fishing culture that has existed for generations. The New York Times said the debate boils down to "fish or gold."

And yet the crusade to stop the mine has run into roadblocks: This week, "The Alaska Clean Water Initiative," which would have put significant barriers to the mine, was voted down. For many Alaskans, the proposed economic benefits of the mine outweigh possible downsides. Still the fight over this mine is likely to be long and ugly.

Tiffany has spoken out against the mine and vowed not to source gold from it. Now, taking a stand like this has undeniable benefits. If the mine does go forward, we will probably see a lot damaging publicity about "where your gold comes from" a la the No Dirty Gold campaign. Strictly from a business standpoint, Tiffany is wise to get ahead of this issue.

And yet there is no doubting the sincerity of company's principals. It is one thing to declare you won't buy gold from Pebble (as other retailers, like Fortunoff and Helzberg's, have done.) It's another to host a screening of an anti-mine documentary. It is still another to actually visit Bristol Bay in Alaska to scout things out, as CEO Michael Kowalski did recently. Kowalski has even taken to asking for Alaskan salmon when he goes out to restaurants.

It's also worth nothing that Tiffany's stand is in direct opposition to that of Anglo-American, the mine's developer. Anglo is, of course, the parent company of De Beers, the company that Tiffany buys quite a bit of diamonds from.

On past social issues, like "conflict diamonds," the industry acted more or less with one voice. But we could be seeing a real split here.  With the mine now facing one less hurdle, it will be interesting to see how this plays out ...

UPDATE: And by the way, if McCain chooses Alaska governor Sarah Palin as his running mate, this issue could get a boost in profile ...

Posted by Rob Bates on August 29, 2008 | Comments (3)