EPA takes another shot at stopping Pebble

In a polarizing announcement, the Environmental Protection Agency released a revised Proposed Determination under Clean Water Act Section 404(c) to prohibit and restrict the use of certain waters in the Bristol Bay watershed. If finalized, the decision would lock out any future for a Pebble mine, and the enormous quantities of copper and other resources it could provide for the global transition to renewable energy.

"This is clearly a giant step backwards for the Biden Administration's climate change goals," Pebble Limited Partnership CEO John Shively told North of 60 Mining News. "I find it ironic that the President is using the Defense Production Act to get more renewable energy minerals such as copper into production while others in the Administration seek political ways to stop domestic mining projects such as ours. As we are still actively working through the established permitting process via our appeal of the Army Corps of Engineers permit denial, we oppose any action that is outside of that process."

You can read about the initial Army Corps denial at Army Corps denies permit for Pebble Mine in the November 25, 2020, edition of North of 60 Mining News.

"This preemptive effort is clearly a political maneuver to attempt to block our ability to work through that established process," continued Shively. "Further, the Army Corps of Engineers published an Environmental Impact Statement for Pebble in 2020 with input from many agencies including the EPA that states that the project can be done without harm to the region's fisheries."

You can read about the release of the FEIS at Major milestone on long path for Pebble in the July 31, 2020, edition of North of 60 Mining News as well as the full impact statement at https://www.arlis.org/docs/vol1/Pebble/Final-EIS/Pebble-FEIS-ch1.pdf.

"The EIS further notes the tremendous economic opportunity the project represents for the communities around Illiamna Lake where year-round jobs are scarce, and the cost of living is very high," added the Partnership CEO. "We still need an opportunity to review the specific details that will be in the preemptive veto action. It is also worth noting that there are several internal steps that the EPA must follow before anything is final including a public comment period and a decision by the Assistant Administrator."

Many of the groups opposed to developing a mine at Pebble came out praising the EPAs decision – although the actual Proposed Determination has not been published until May 26, a "pre-publication" Federal Register Notice for Proposed Determination can be read at https://www.epa.gov/bristolbay/2022-proposed-determination-pebble-deposit-area – with Alaskan anglers, hunters, local businesses, indigene and Native tribe representatives, as well the extensive fishing industry in Southwest Alaska rallying behind the announcement.

"Bristol Bay Native Corporation welcomes EPA's announcement today," said BBNC President and CEO Jason Metrokin. "This proposal is good news for Bristol Bay, and it could not come at a more opportune time, as millions of sockeye salmon return to their home waters and the people of the region ready their nets once again engage in annual subsistence and commercial fishing activities."

One of, if not the largest, reason for such opposition toward Pebble is the perceived potential that waste from mining the large copper-gold-molybdenum-silver-rhenium deposit could harm the world-class Bristol Bay fishery.

EPA's Proposed Determination would prohibit and restrict discharges of dredged or fill material associated with mining the Pebble deposit into waters of the United States within the mine site footprint located in the South Fork Koktuli River, North Fork Koktuli River, and Upper Talarik Creek watersheds.

Bristol Bay's salmon resources have significant nutritional, cultural, economic, and recreational value, both within and beyond the region with a total economic value, including subsistence uses, of the Bristol Bay watershed's salmon resources being estimated at more than US$2.2 billion in 2019.

Furthermore, Bristol Bay commercial salmon fisheries generate the largest portion of this economic activity, resulting in 15,000 jobs and an economic impact of US$2 billion in 2019, with roughly US$990 million contributing to Alaska.

However, as an argument, a Pebble Mine project advanced to the final step of the permitting process would produce 320 million pounds of copper; 363,000 ounces of gold; 15 million pounds of molybdenum; 1.8 million oz of silver; and 12,000 kilograms of rhenium over the first 20 years of mining.

With these numbers, at a processing rate of 180,000 tons per day, the initial 20-year mine considered in the preliminary economic assessment is forecast to generate a post-tax internal rate of return of 15.8% and a net present value (7% discount) of US$2.3 billion.

At forecast long-term metals prices, these expansion scenarios generate an IRR of 18.9 to 22.7% and an NPV of US$6.7 to US$9.8 billion.

Under the expansion scenarios, this operation would pay roughly US$22 billion to the state; US$4 billion to the borough; and US$19 billion to the federal government over roughly a century.

You can read a complete breakdown of the Pebble PEA at PEA reveals Pebble economics, benefits in the September 10, 2021, edition of North of 60 Mining News.

After careful consideration of the environmental concerns, the Army Corps of Engineers approved the FEIS for developing a mine at Pebble only to deny federal permits when it came time to issue a record of decision shortly after the 2020 U.S. presidential election.

You can read about the contradiction by USACE at Pebble assails Corps economic findings in the March 19, 2021, edition of North of 60 Mining News.

"The EPA was intimately involved with the review process and the Army Corps of Engineers' determination that the mine would not harm the salmon fishery," said Power the Future Alaska State Director Rick Whitbeck. "The only 'determination' that the EPA has made is to agree to interject itself and further politicize a process that hasn't yet played out. ... Pebble – based on science – will never impact the Bristol Bay fishery, but will provide hundreds of jobs, along with millions of tons of domestic supplies needed for renewable energy products."

Regardless if one is for or against Pebble, lawmakers are concerned with EPA's intention to implement a predetermined Section 404(c) of the Clean Water Act decision. By law, the 404 section of the Clean Water Act is under the jurisdiction of the Army Corps of Engineers, with the EPA given the option to veto after a determination has been given by USACE.

Concerns arise from EPAs encroachment and overreach into Pebble due to the possible precedent set by EPA advancing final section 404 determination that could deter other companies from investing in U.S. projects for fear that EPA could subjectively issue a veto without a full evaluation of the proposal – a predetermination before all the information has been accumulated.

Nonetheless, a final environmental impact statement was issued showing that negligible harm would befall the Bristol Bay fisheries, and Northern Dynasty Minerals Ltd. – the company heading the advancement of the Pebble mine – stands firmly behind the data.

"The Pebble project remains an important domestic source for minerals necessary for the Biden Administration to reach its green energy goals and if it blocks Pebble it will have to seek minerals to meet its goals from foreign sources which simply do not have the same environmental standards as we do," finished Shively.

A follow-up story when the EPA releases its proposed determination will be published by North of 60 Mining News.