Market Developments
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Tiffany leads industry in boycotting Pebble Mine
By Teresa Novellino
October 19, 2009
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| Tiffany and Co. is urging the trade to join its boycott of gold from the Pebble Mine in southwest Alaska, where Bristol Bay's fisheries industry, valued at nearly $400 million annually, produces up to 70 million salmon each year. |
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New York--When Tiffany and Co. Chairman and Chief Executive Officer Michael Kowalski headed into the Alaskan wilderness to go fly fishing in Bristol Bay, wild salmon swam free, brown bears frolicked in streams and the hot new "Tiffany Keys" collection seemed a million miles away.
Yet the two industries--jewelry and fishing--are now oddly intertwined because of a mining company's plan to build what would be North America's largest gold and copper mine in Bristol Bay.
The operation promises to create jobs and pump billions into the southwest Alaskan economy, but for Kowalski, there's a deal-breaking element: The proposed site for the mine--which by its nature will be destructive to the environment--is on land that is home to the world's largest sockeye salmon fishery and sandwiched between two national parks.
Generations of Bristol Bay natives who fear their days of reeling in salmon for a living are now on the line have aired their grievances, grass roots style, via rallies and the sale of "No Pebble Mine" T-shirts and bumper stickers.
Kowalski, who visited Alaska to see the area for himself, thinks the fishing community is right, and after presenting his case and a documentary on the subject titled Red Gold to Tiffany and Co.'s board of directors, they agreed.
If the Pebble Mine eventually opens, Tiffany will boycott its gold, and the company has launched an advertising campaign within the trade to encourage other jewelers to join in. But why get involved?
"I think the question is one of risk assessment," Kowalski said in an interview with National Jeweler editors at his offices in Manhattan. "I think it's highly unlikely that there wouldn't be a severe impact on the fisheries. Is the price of developing the Pebble Mine simply too high to pay for the jewelry industry, for Tiffany jewelry?"
The Pebble mine, proposed for state-owned land, is currently going through the requisite rounds of environmental assessments. If Alaskan voters eventually approve its opening, the Pebble Limited Partnership has vowed to run an environmentally clean operation.
While Kowalski doesn't challenge the partnership's intentions, he knows enough about the mining process to be concerned about how effective any mitigation plan will be.
While diamond mine waste is chemically inert, the same is not true of metal mining's refuse. The proposal is for an open-pit mine, which requires building the world's largest earthen dam to hold back the waste, with 99 percent of the waste tonnage consisting of acid-laden rock.
"It will require containment and perpetual treatment--forever," Kowalski said. "That raises some tough questions."
For jewelers, there are additional questions that go to the heart of what it means to run a responsible business at a time when global warming, clean water and recycling are no longer fringe issues.
"In a world where [conscientious consumption of resources has become so important], consumers will legitimately ask, 'How can the jewelry industry be an island of irresponsible consumption?'" Kowalski said.
But would something like the Pebble Mine truly impact sales? Just a few years ago, jewelers fretted over Blood Diamond, a movie that starred A-listers Leonardo DiCaprio and Jennifer Connelly and brought attention to the conflict diamonds that were coming out of Sierra Leone more than a decade ago. The film, released before the holidays, didn't put a dent in diamond sales.
But Kowalski said this doesn't mean that consumers don't care about social or environmental issues.
"It's not top-of-mind awareness, it's not as if people are coming in and asking about where our gold is sourced," Kowalski said, adding that Tiffany has a chain-of-custody system to keep track of the origins of its gold and silver. "I think it's dangerous to say 'No one's asking about it, therefore it doesn't matter.' I think you need to be careful about warily approaching a tipping point. A few years ago, no one talked about climate change. Al Gore writes a book, a few other things happen, and suddenly climate change is at the top of everyone's agenda."
While Kowalski acknowledged that the mine would create jobs, he contends they will be temporary.
"A mine, by definition, is a wasted resource...it will be gone, it will be depleted and likely be abandoned," Kowalski said.
But he points out that fisheries jobs are in jeopardy as well.
Bristol Bay produces up to 70 million salmon annually, providing as many as 4,000 fisheries-related jobs with an estimated annual value of nearly $400 million, according to Trout Unlimited, which, along with a number of sports fishing and environmental advocacy groups, has aligned itself against the Pebble Mine. The federal government is also eyeing the impact on the national parks near the site, Lake Clark and Katmai.
"The people of Alaska need to make a decision about the Pebble Mine," Kowalski said. "It's their decision. Conversely, it's our decision of where we source metal. We don't want the Pebble Mine to transform into the next big mining district."
Joining Tiffany in its plan to boycott Pebble Mine are other jewelers, including Ben Bridge Jeweler, Birks and Mayors, Commemorative Brands Inc., Hacker Jewelers, Helzberg Diamonds, Herff-Jones and Chicago independent Leber Jeweler.
And for its part, Tiffany does not want to sway the minds of Alaskan voters. Its appeal is to fellow jewelers.
"If we can't say 'no' to [a mine in a] place as magnificent as Bristol Bay, what can we say no to?" Kowalski asks.
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