The US Army Corps of Engineers (USACE) has ordered Northern Dynasty Minerals (TSX: NDM) to craft a plan that would mitigate environmental impacts of the controversial proposed Pebble copper-gold-molybdenum mine in Alaska.
In a letter dated August 20 to the project’s developer, Pebble Limited Partnership, the body said that “mitigation is required for unavoidable adverse impacts to aquatic resources” the project could bring.
The document marks a surprise reversal from the Corps’ July decision. The regulator cleared at the time the last environmental hurdle for the proposed Pebble mine.
The Pebble Partnership, in turn, noted that the USACE’s fresh request did not constitute a “delay or pause” in the permitting process, adding it would submit a plan “within weeks.”
Shares of Northern Dynasty plunged 47% on Monday after media reports said the Trump administration plans to block the Pebble mine, despite denials by the company over the weekend.
The stock was down 40% by 4 p.m. EST after falling as much as 56% at the open. Northern Dynasty’s market capitalization is C$582.58 million.
The approval of the final environmental impact statement (EIS) for the project was supposed to put an end to an almost two-decade-long permitting process.
The mine only needed the federal nod to go ahead. Doubts around what many considered a done-deal, however, surged in early August, with President Donald Trump pledging to hear out “both sides of the issue.”
The unexpected statement followed Trump’s son Donald Jr. tweeting he opposed the project supported by his father’s administration.
The Vancouver-based miner denied the report, saying that the message pushed by the media outlet was “clearly” an error.
“It was likely made by a rush to publish rather than doing the necessary diligence to track down the full story,” the company said.
The WSJ, however, had a senior Trump administration official supporting Politico‘s story.
“All those reports kind of said the same thing: not enough facts, nowhere near the right mitigation, and the project would result in significant degradation of the environment … We do support mining. But this just didn’t work,” the source told WSJ.
Pebble mine would be built in the salmon-rich Bristol Bay region, about 200 miles southwest of Anchorage. This has triggered opposition from conservationists and local Indigenous communities, who claim the mine would cause irreparable damage to the environment and the fishery-based economy.
Northern Dynasty said in early August that it supported calls for an independent review of the project’s EIS to be undertaken by relevant inspectors general of the US Army, the US Defense Department and the USACE.
The measure, which sought to disprove critics of the development, was followed on Monday by an advertising and outreach campaign to push for the approval of Pebble.
Northern Dynasty said the move targeted “the Trump Administration, the Republican Party, its delegates and influencers.
The Pebble Partnership, in turn, noted that the USACE’s request did not constitute a “delay or pause” in the permitting process. It also said it would submit the plan demanded “within weeks.”
The potential cost of the requested mitigation plan is unknown and thus concerning, Cantor Fitzgerald analyst Mike Kozak said in research note. “It will be exceptionally challenging to reach a compensation plan … that will satisfy all parties,” he said.