Biden administration moves to block Alaska Pebble mine

Drilling at the Pebble project in Alaska. (Image courtesy of Northern Dynasty Minerals.)

The Biden administration said it will relaunch a process that could permanently protect Bristol Bay — a vital Alaskan watershed — from the development of the controversial Pebble mine project.

In an Alaska federal district court filing on Thursday, the Department of Justice asked that the court vacate a 2019 decision by the Trump-era Environmental Protection Agency to remove protection of the Bristol Bay watershed, home of one of North America’s biggest sockeye salmon fisheries.

The Pebble project has been pursued for more than a decade, faced environmental opposition from the onset, and its development has been surrounded by controversy and delays, including the EPA’s decision in 2014 to propose restricting the discharge of mining waste and other material in the area.

But the developer — Canada’s Northern Dynasty Minerals (TSX: NDM; NYSE: NAK) and the EPA in 2017 ended the long dragged out dispute over the federal agency’s decision to block construction. The settlement paved the way for an eventual federal permitting decision that could allow Northern Dynasty’s subsidiary — Pebble Limited Partnership — to move forward.

The Pebble mine project has been pursued for more than a decade, faced environmental opposition from the onset, and its development has been surrounded by controversy and delays

The project was dealt another blow in November 2020 when Northern Dynasty announced its 100%-owned, US-based subsidiary Pebble Limited Partnership received formal notification by the US Army Corps of Engineers (USACE) that its application for permits under the Clean Water Act and other federal statutes had been denied.

The lead federal regulator found Pebble’s ‘compensatory mitigation plan’ to be ‘non-compliant’, and that the project is ‘not in the public interest’.

The company vowed to appeal, and in January the office of Alaska Governor Mike Dunleavy issued a statement to announce the administration will formally appeal the USACE denial of the key federal permit.

“The flawed decision by the Alaska District creates a dangerous precedent that will undoubtedly harm Alaska’s future and, any potential project can fall victim to the same questionable standards,” Governor Dunleavy said in January. “We have to prevent a federal agency, in this instance, the Alaska District of the Army Corps of Engineers, from using the regulatory process to effectively prevent the State from fulfilling a constitutional mandate to develop its natural resources.”

New PEA released

Also on Thursday, Northern Dynasty Minerals announced the results of a 2021 Preliminary Economic Assessment (PEA) providing updated production, financial and cost estimates for the proposed project.

The 2021 PEA examines three potential mine expansion scenarios, and potential alternative strategies for gold recovery that could form the basis for future permit applications and review, Northern Dynasty said.

If the court grants the Department of Justice request, it would automatically reinstate the EPA’s Clean Water Act Section 404 review process, which would enable the agency to resume an effort to protect certain waters in the Bristol Bay watershed.

“The Bristol Bay Watershed is an Alaskan treasure that underscores the critical value of clean water in America,” said EPA Administrator Michael Regan. “What’s at stake is preventing pollution that would disproportionately impact Alaska Natives, and protecting a sustainable future for the most productive salmon fishery in North America.”

With resource estimates including 6.5 billion tonnes in the measured and indicated categories containing 57 billion pounds of copper and 71 million ounces of gold, 3.4 billion pounds of molybdenum and 345 million silver ounces, if permitted, Pebble would be North America’s largest mine.

(With files from Reuters)