Controversial Alaska mine gets lifeline from Trump EPA

The area where Pebble mine would be built, 320 km southwest of Anchorage, within the Bristol Bay watershed. (Image courtesy of Northern Dynasty Minerals)

The Trump administration is throwing a lifeline to the massive Pebble Mine planned near Alaska’s Bristol Bay, as regulators move toward undoing Obama-era environmental restrictions that have thwarted the project.

The Environmental Protection Agency will resume considering on Wednesday whether to withdraw the proposed water pollution restrictions that have effectively stalled the project since they were outlined in 2014, said a senior EPA official who asked for anonymity to discuss the matter before it is public. Reconsidering the issue — after a year-and-a-half hiatus — is a necessary prelude to the EPA officially lifting the restrictions later.

The EPA’s action is a significant boost for Northern Dynasty Minerals Ltd. and Pebble LP supporters, who have called on the EPA to lift the Clean Water Act restrictions and let the proposed gold, copper and molybdenum mine move forward.

Northern Dynasty rose the most since November on the news, jumping as much as 28% in New York trading.

Developers have touted the mine’s potential, saying it aims to tap “the most significant undeveloped copper and gold resource in the world,” with 6.5 billion tons of known minerals and another 4.5 billion tons of assumed minerals. The bounty of gold alone is estimated to be worth more than $100 billion.

But that mineral lode has been out of reach largely because of the project’s location in southwestern Alaska, inside an area that drains into Bristol Bay, home to the world’s most productive wild salmon fishery. Conservationists, local activists and fishing operations have fought the project for more than a dozen years, warning it could jeopardize the region’s salmon — and a flourishing fishery with a catch that topped $281 million last year.

Developers have touted the mine’s potential, saying it aims to tap “the most significant undeveloped copper and gold resource in the world”

The Trump administration action targets the EPA’s 2014 proposal limiting the discharge of mining waste in the Bristol Bay watershed. The proposed restrictions, issued under former President Barack Obama even before project developers submitted a mine plan or formally sought government authorizations, could preclude the company from obtaining essential permits from the U.S. Army Corps of Engineers.

The restrictions can’t legally be finalized until 2021 because of a court settlement the EPA reached with Pebble Mine in May 2017. Until then, the EPA has agreed not to impose more permanent restrictions under a section of the Clean Water Act governing the dumping of dredged or fill material.

Developers have since sought a permit, and the Army Corps is evaluating the project’s environmental impacts. However, confusion about the status of the five-year-old proposed limits casts a cloud over the process, EPA General Counsel Matthew Leopold said in a draft memo reviewed by Bloomberg. It is important to make a final decision on the 2014 proposal to provide clarity and transparency to the public, Leopold argued in the memo.

EPA’s move follows calls to scrap the proposed restrictions from conservative and business groups, including Americans for Tax Reform, Americans for Prosperity and the Competitive Enterprise Institute. The groups argued Obama’s EPA effectively issued a preemptive veto of the project, short-circuiting substantive review of the mine based on assumptions about what it would look like. Pebble also argued its new mine plan is significantly different from what the Obama administration anticipated.

While restarting the review doesn’t guarantee the proposed limits will be scrapped, the drafted memo echoes the conservative criticism of the agency’s approach under Obama. The EPA is now also preparing to invoke provisions in the Clean Water Act allowing it to coordinate with the Army Corps as it vets the mine, according to the drafted document.

The Trump administration has taken an inconsistent approach to the project.

First, under former EPA Administrator Scott Pruitt, the agency proposed lifting the Obama-era water limits before Pruitt made a surprise decision to leave them in place eight months later. Now, the EPA is effectively reinstating the process that was underway before Pruitt’s pivot. Current EPA Administrator Andrew Wheeler has recused himself from any involvement in the issue, because his former law firm Faegre Baker Daniels LLP provided services to Pebble.

Northern Dynasty has been raising funds amid the government review. On June 24, the company closed the sale of 12.2 million shares, raising $5 million, saying it needed the money to fund the ongoing environmental impact study of the project and continued “outreach and engagement with political and regulatory offices.” It also sold large blocks of shares in March, raising more than $10 million.

The project still faces headwinds — including stiff political opposition in Congress, where a provision that would temporarily block the project was tucked into a House spending bill earlier this month.

(By Jennifer A. Dlouhy)

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