Oct. 19--Construction costs for the proposed Pebble mine have topped $6 billion, the president of the company that would develop the project told the Alaska Support Industry Alliance Oct. 9.

Costs have been pushed up by inflation that is affecting all major industrial projects, as well as the increasing complexity of the project. It is $1 billion higher than was estimated last year and about three times the initial estimate made when mining companies began serious work on Pebble.

Pebble is a copper-gold-molybdenum deposit located about 18 miles north of Illiama. If a mine were developed, it would be one of the largest of its kind in the world.

John Shively, CEO of the Pebble Partnership, the mine development company, told the Alliance that the project also requires a 95-mile road to a new port that would be built on the west side of Cook Inlet. The mine would also need a pipeline to carry a slurry, a mixture of ore and water, from the mine to the port and a second pipeline to return recycled water from the slurry back to the mine for re-use.

A small pipeline may also be needed to ship diesel fuel for mine equipment, he said.

The Pebble Partnership, formed to develop the mine, is owned 50 percent by major mining company Anglo American Mines and mine developer Northern Dynasty Minerals. Mining company Rio Tinto owns some 20 percent of Northern Dynasty Minerals.

Shively told the Alliance that the electricity requirements for the mine have now been estimated at 600 megawatts to 700 megawatts, an amount of power that would provide enough new baseload demand to build substantial new generation capacity for the state's railbelt power grid.

Shively said power for the project may be generated elsewhere, most likely on the east side of Cook Inlet, and sent to the mine through long-distance transmission lines, including a submarine cable crossing the inlet.

The amount of power required could provide enough new baseload electricity demand to justify substantial generation capacity additions in the main railbelt power grid and benefit the entire system, he said.

"This could help justify a bullet line to bring gas from the North Slope, or a major geothermal project," such as one being discussed near Mount Spurr, west of Anchorage, Shively said.

However, until that happens the company is also considering short-term options, including gas-fired power generation using imported liquefied natural gas, he said.

Substantial work is continuing at Pebble this year, with a goal for the company to file permit applications with government agencies in late 2009 or early 2010.