Families on the front lines of mining, drilling, and fracking need your help. Support them now!

Complaint to UK watchdog says Anglo misleading shareholders on risks of project

Joint press release: Nunamta Aulukestai * Earthworks

DILLINGHAM, Alaska, Oct. 20 — This week, voters in the Bristol Bay region said no to Anglo American plc's plans to dig a massive open-pit gold and copper mine at the headwaters of the world's richest salmon fishery. But if you're a Anglo American investor, don't expect the company to tell you about the risk to your share value by growing opposition to the mine or the chance that it might not be built at all.

According to a formal complaint filed by Alaskan Native villages with the UK's financial reporting watchdog, Anglo American has failed to obey the law requiring disclosure to shareholders the environmental, regulatory and liability risks of the proposed Pebble Mine near the salmon-rich waters of Bristol Bay.

Nunamta Aulukestai, the association of nine Native village corporations in the Bristol Bay region, has filed a petition with the Financial Reporting Review Panel (FRRP) over the failure of Anglo's Directors Report for 2010 to comply with the UK Companies Act, which requires publicly quoted companies to be transparent in their disclosures about environmental and social issues. Nunamta was joined in its filing by Earthworks, an international mining reform group.

“We find that (Anglo's 2010 report) does not relay information about extremely significant environmental matters and social and community issues relating to the proposed Pebble Mine, nor the risks that these issues pose to the company,” says the petition (PDF). “Anglo American is facing risks in relation to both its local licence to operate and its international reputation as a responsible miner. . . . These issues and risks are material to the company's shareholders and long-term value.”

Bristol Bay is the world's most valuable salmon fishery, and in the region fishing is both a traditional way of life and an economic engine producing of $450 million in annual revenue and providing 10,000 jobs. Anglo American is seeking US government approval for North America's largest open-pit gold and copper mine. The proposed mine holds billions of dollars worth of ore, but would dump up to 10 billion tonnes of toxic mine waste at the headwaters of Bristol Bay.

On Monday, a majority of voters in the Lake and Pen borough in the Bristol Bay region passed the Save Our Salmon Initiative, which bans large-scale resource extraction, including mining, that would destroy or degrade salmon habitat. It is the latest sign of community opposition to the project.

“Shareholders should know that the local communities oppose the Pebble project, and we are taking measures to stop it,” said Kim Williams, executive director of Nunamta Aulukestai (“Caretakers of the Land” in Yu'pik).

“Anglo American is trying to hide the truth about Pebble Mine from everyone,” said Bobby Andrews, spokesman for Nunamta Aulukestai . “Now we see they're hiding the truth from their shareholders and investors. We're asking the FRRP to make Anglo come clean.”

Anglo's report makes no mention of the environmental, social and community concerns about the Pebble mine, preventing shareholders from making an informed judgement about how the company's management is securing Anglo's long-term value. Pebble is in fact mentioned in passing in just three instances, with nothing to suggest that the project could be blocked due to overwhelming community opposition or the U.S. EPA's concerns. Nor is there any mention of the liabilities that could stem from the dumping of billions of tonnes of mine waste at the headwaters of the world's richest salmon fishery.

In a recent similar case before the FRRP, Client Earth complained that the mining company Rio Tinto's 2008 report failed to disclose the required information about environmental and social issues around their worldwide operations. On review, the FRRP agreed and through negotiation secured Rio Tinto's pledge to include more information about such matters in future reports. (Most complaints brought to the FRRP are settled this way, although the Companies Act of 2006 does give them the authority, if a company refuses to make changes to its reporting, to file a court request for an order to comply.)

“Full disclosure of risks to shareholders and investors is not only the right thing to do — it's the law,” said Bonnie Gestring of Earthworks. “Anglo knows that Pebble Mine can't go forward if the facts are made clear, so they're desperate to muddy the waters. It's time for them to tell the truth.”

# # #