What’s next for Pebble mine, now that the federal government has taken extraordinary action to stop it?

February 02, 2023

By Alex DeMarban, ADN

But Pebble Limited, led by small Canadian mining company Northern Dynasty Minerals, has shown remarkable resilience for many years. The project has survived the loss of major mining partners and resistance from the presidential administrations of Democrat Barack Obama, Republican Donald Trump and now Democrat Joe Biden.

Pebble is “like a zombie. They never die,” said Dan Cheyette, a vice president with the Bristol Bay Native Corp., the region’s Alaska Native corporation and a mine opponent. “We’re the persistent ones who will pursue every avenue we have to stop them.”

A far-reaching veto

Pebble spokesman Mike Heatwole said Tuesday that the company had no further comment at the moment beyond its statement reacting to the EPA decision. Pebble chief executive John Shively said in the statement that the company would likely sue over the decision.

[What Alaska leaders, advocacy groups and industries are saying about the EPA rejection of Pebble mine]

The EPA’s decision was a vast overreach that might provide an opening for a legal challenge to go after, said Deantha Skibinski, executive director of the Alaska Miners Association. It affects a 300-square-mile area of the Pebble deposit, a significantly broader area than Pebble has applied with the Corps to mine over 20 years.

EPA officials said the agency wanted to prevent any future, similar mine from being built. Pebble has said before that companies could one day seek to expand the project’s mining footprint in the distant future, though that expansion would require a new federal permitting process of its own.

The EPA is “not just vetoing the project application, they are vetoing a larger area than the project calls for, and the ability of any future company unrelated to Pebble to develop there,” Skibinski said.

Alaska Attorney General Treg Taylor said in a statement Tuesday that the EPA’s decision is misguided and “we look forward to meeting EPA in court.”

Gov. Mike Dunleavy said in a written statement that the EPA’s decision threatens the state’s legal right to develop its mineral resources, at a deposit that could be worth up to $1 trillion, the potential value if it’s fully developed beyond the bounds of Pebble’s 20-year mine plan.

In a letter to the EPA last year calling for the agency to halt its effort, Dunleavy said if the agency blocks the mining project, the state would be owed billions of dollars for a “regulatory taking” of the state’s mineral wealth.

Sam Curtis, a spokesman with the Alaska Department of Law, on Tuesday declined to say if the state would pursue compensation.

“We are considering all options and their merits,” Curtis said. “But all final decisions are reserved until we file with the court.”

It’s possible that Pebble could bring a legal challenge in the separate federal permitting process involving the U.S. Army Corps of Engineers. The Corps in 2020 ultimately rejected Pebble’s application for a permit to develop the mine, but only after initially saying that under normal operations the mine “would not be expected to have a measurable effect on fish numbers and result in long-term changes to the health of the commercial fisheries in Bristol Bay.”

In his statement on Tuesday, Dunleavy pointed to the Corps’ changing statements in the process of denying a permit for Pebble.

The EPA action means the project can’t be permitted for construction, even if Pebble wins its ongoing administrative appeal of a 2020 decision by the U.S. Army Corps of Engineers to deny the company’s permit application.

[EPA issues long-awaited final determination halting Pebble mine]

The decision blocks a project that would have been among the largest open-pit mines in the world. The mine would have unlocked billions of dollars in mineral wealth. But the agency says scientific and technical records dating back more than two decades show the mine would unacceptably harm the world’s largest commercial sockeye salmon fishery and about two dozen Alaska Native villages in the region.

Less certain is what will happen to the project in the court battle likely to follow, though people familiar with past vetoes by the EPA — made only three times in the last 30 years — suggest that Pebble has little hope of winning in court.

After a decades-long controversy, the Biden administration took a rare step this week to stop the giant Pebble copper and gold mine in Southwest Alaska. But observers of the project say the fight could live on in court for years to come.

In separate statements, mine developer Pebble Limited Partnership and the state of Alaska on Tuesday threatened to sue the Environmental Protection Agency after it issued a preemptive veto of the project using its special power under the Clean Water Act.

Conservation and tribal groups and other entities opposed to the mine have said they’re equally ready to fight back to support the agency’s decision, if it must defend itself in court. They’re also looking for additional protections for the Bristol Bay fishery, beyond the EPA action, through potential legislation in Congress.

The EPA’s decision also would seem to dim financial prospects for the project, though a financial analyst who tracks stocks tied to Pebble said major mining companies will always have the Pebble deposit on their radars because of its massive potential value.

The project is located on state land 200 miles southwest of Anchorage, near headwaters of the Bristol Bay fishery.

isting legal problems he sees with the EPA decision, Dunleavy said, “Of particular concern is EPA’s failure to demonstrate why the Army Corps of Engineers was wrong when it reviewed the same scientific data but arrived at the opposite” conclusion.

Brian Kraft, who owns sport fishing lodges in the Bristol Bay region and is part of Save Bristol Bay, an effort organized by Trout Unlimited to halt the mine, said Pebble opponents are prepared to fight in court to defend the EPA’s decision.

“It’s unfortunate that the administration in our state sees that they need to go down the route,” he said. “We fully expect to fight it. It’s disappointing, quite frankly.”

Dennis McLerran, an attorney in the state of Washington focused on environmental law, said EPA’s final veto determinations under the Clean Water Act have proven extremely durable against court challenges. McLerran is the former EPA regional administrator who was involved in the beginning of the agency’s process to halt the mine more than a decade ago, after several Bristol Bay tribes sought the agency’s intervention to stop Pebble.

“I think that this is a very solid decision with a very solid record behind it, and legally challenging it will be very difficult,” he said. “But there is always uncertainty regarding litigation.”

That process could take several years to play out, he said. But “absent some extraordinary relief,” the Pebble project is done for, he said.

“Basically the mine is dead for all intents and purposes unless a court was to overturn that decision,” he said.

[As White House advances Willow oil project, advocates uneasy about Biden administration’s ‘mixed messages’]

‘This project will remain on the radar’

The decision also raises questions about Pebble’s future financial opportunities. The company has lost the financial support of major mining companies over the years, though an anonymous private asset management firm last year agreed to invest $12 million initially and up to $60 million into Pebble for a share of mining royalties.

Andrew Weekly, with SmithWeekly Research, which provides independent analysis of Pebble stock and shares of other mineral companies, said Pebble is not dead.

“It’s just a matter of bringing the EPA’s irresponsible actions to the table, which unfortunately now need to likely be decided by the courts,” he said. “The EPA is saying, ‘Stop, we’ll change the rules before you can proceed.’ It’s quite perverse.”

Weekly said over the long-term, Pebble has a lot of opportunity left because it contains huge quantities of valuable minerals needed in the U.S.

It will always be a prospect that major mining companies eye, he said.

“As their mines are depleted or come to an end, they need to replace those reserves with new resources, and Pebble is a very large-scale project to replace those,” he said. “This project will remain on the radar of major companies around the world because of its sheer scale.”

Russell Nelson, chair of Bristol Bay Native Corp., said in a press conference on Tuesday that despite the EPA action, mining companies years from now will want to develop the Pebble deposit. He said the Bristol Bay region needs a salmon and fisheries preserve that protects every stream.

“Today’s decision is a milestone, but it’s not the end of the road,” he said. “There’s still work to be done to make sure that Bristol Bay’s cultures and fishing-based economy are protected. We look to begin work with our congressional delegation in the coming months on federal legislation that will provide broader protections for the important watersheds in the region.”

“It’s upon us to teach our grandchildren to continue the fight to make sure that resource stays locked up,” he said. “There’s people that are greedy in this world and they would do anything to make money off a resource like that.”

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