EPA’s unexpected decision welcomed by Pebble opponents
Environmental Protection Agency Administrator Scott Pruitt’s unexpected Jan. 26 comments expressing his environmental concerns about the Pebble mine were welcomed by mine opponents and reflected in the stock price of Northern Dynasty Minerals Ltd., which is the sole owner of the prospective copper and gold project.
Pruitt announced Jan. 26 that the EPA would not finalize the proposed withdrawal of the 2014 proposed determination to prohibit a large mine in the Bristol Bay region through its Clean Water Act Section 404(c) authority.
The agency said in a statement that it has “serious concerns” about the impacts of mining activity in the Bristol Bay watershed and public comments in stakeholder meetings stressed the importance of the world’s largest wild salmon fishery. Pruitt said it would be disingenuous for the agency to not to offer an environmental position at this stage of the project.
Vancouver-based Northern Dynasty’s stock opened trading on domestic markets down 19 percent Jan. 29 from its closing price of $1.52 per share Jan. 26. The EPA’s statement on the project was issued after East Coast markets had closed that day. Northern Dynasty’s stock price stabilized at about $1.18 per share, or down about 22 percent after several hours of trading Jan. 29. Northern Dynasty is also traded on the Toronto Stock Exchange.
Pebble Limited Partnership filed its wetlands fill permit application with the U.S. Army Corps of Engineers Dec. 22. The application outlines plans to fill 3,190 acres of wetlands at the mine site. While not specific to any mine plan — a point Pebble and parent company Northern Dynasty minerals have stressed — the Bristol Bay Watershed assessment published by EPA in 2014 concludes a mine that would fill more than about 1,100 acres would be too damaging to fish habitat to allow.
Pruitt emphasized in his statement that his decision “neither deters nor derails” the Pebble environmental permit application process now underway while at the same time he has heard from stakeholders on whether to withdraw the proposed 404(c) restrictions.
“Based on that review, it is my judgment at this time that any mining projects in the region likely pose a risk to the abundant natural resources that exist there,” Pruitt said Friday. “Until we know the full extent of that risk, those natural resources and world-class fisheries deserve the utmost protection. Today’s action allows the EPA to get the information needed to determine what specific impacts the proposed mining project will have on those critical resources.”
According to the Federal Register docket, just more than 1 million public comments have been submitted to the EPA on the proposal to withdraw the proposed 404(c) restriction, but it is currently unclear how many favor or oppose the action.
With that in mind, Bristol Bay-area Native groups, lawmakers and fishing organizations considered Pruitt’s position — largely surprising given the Trump administration’s push to promote mining and infrastructure projects — a step in the right direction.
United Tribes of Bristol Bay Executive Director Alannah Hurley said the group is happy Pruitt left the proposed veto “on the table,” but it will be several years before the EPA could invoke it under the terms of a May 2017 settlement of a lawsuit filed by the Pebble Partnership.
Pebble sued the agency in 2014 alleging the EPA was biased in its proposed action after improperly colluding with anti-Pebble groups to reach its conclusion.
A federal judge issued an injunction in late 2014 that stopped the EPA from finalizing the proposed restrictions against mining in the Bristol Bay watershed; settlement talks between the EPA and Pebble started late in the Obama administration and were ultimately concluded under Trump’s.
Pebble CEO Tom Collier highlighted in the company’s response that the agreement the EPA reached with Pebble last year gives the company the assurance it can go through the federal permitting process without the worry of the agency finalizing the proposed preemptive prohibition on Pebble.
“The (Corps of Engineers) has determined we have a complete application and has initiated a thorough, objective review of the Pebble project,” Collier said. “We intend to participate fully in the process and encourage al project stakeholders to do the same.
“We believe we can demonstrate that we can responsibly construct and operate a mine at the Pebble deposit that meets Alaska’s high environmental standards. We will also demonstrate that we can successfully operate a mine without compromising the fish and water resources around the project. We look forward to having all of our detailed information fairly reviewed by the Corps of Engineers and other participating regulatory agencies through the longstanding, lawful permitting process.”
Specifically, the EPA-Pebble settlement called for the agency to start the process of withdrawing the proposed mining restriction, which it did in July, but it does not require that process be finalized and because it is a proposal to remove a proposal with nothing final, Pruitt’s action set a tone but did not change anything formally.
The settlement also does not allow for the EPA to resume restricting the development until a final environmental impact statement is published for the project or four years after the May 2017 settlement, whichever comes first.
UTBB President Robert Heyano said Pruitt’s decision shows the power of a unified local voice even in times of highly partisan politics.
“The United Tribes of Bristol Bay would like thank EPA Administrator Scott Pruitt, (Region 10) Administrator Chris Hladick and the staff at EPA for their work. The fight to protect our watershed from Pebble is far from finished. But today’s decision, and all those who worked tirelessly to get us here, will be celebrated,” Heyano said.
Hladick, a former city manager of Dillingham, where the project is widely opposed, transitioned from heading the Commerce Department in Gov. Bill Walker’s administration to leading the Alaska-Pacific Northwest region of the EPA in December.
Walker said told the Journal while campaigning in 2014 that he opposed development of Pebble but also was worried about the precedent the EPA’s preemptive push to prevent the mine could have on other development projects in the state.
The governor told Alaska Public Media in October that he had not been convinced Pebble should move forward and the company had a high bar to clear to had taken appropriate steps to prevent potential damage to the fish and wildlife habitat — a stance Pebble deemed appropriate at that time.
“I have spoken to Administrator Pruitt about the Pebble Mine Project many times in the past year, and I have shared with him my belief that in the Bristol Bay region we should prioritize the resource that has sustained generations and must continue to do so in perpetuity. I thank the Environmental Protection Agency and the Trump administration for listening to my input, as well as the input of thousands of Alaskans who oppose rescinding the EPA’s Bristol Bay (restrictions),” Walker said Jan. 26.
California treasurer weighs in
Meanwhile, California Treasurer John Chiang sent a letter Jan. 29 to leaders of First Quantum Minerals Ltd. urging them to stay out of the Pebble project. Chiang is also a trustee to the California Public Employees’ Retirement and California State Teachers’ Retirement systems.
He wrote that the California pension funds believe sustainable business practices are fundamentally important to long-term value growth for sharheolders and therefore, First Quantum, a Canadian mining firm investigating whether or not to invest in Pebble, should not.
“As a fiduciary of these funds, I cannot ignore the far-reaching economic implications and sustainability risks at play here,” Chiang wrote to First Quantum CEO Philip Pascall and President Clive Newall. “In my view, investment in the Pebble project presents undue risk not only to the long-term sustainability to the Bristol Bay region, but also to the value of our long-term investments in First Quantum Minerals, Ltd.”
CalPERs, with a total market value of $362 billion, holds nearly 4.3 million shares of First Quantum as well as bonds in the mining company with a maturity value of $2.3 million, the fund’s latest annual report states. There are more than 689 million outstanding shares of First Quantum stock, according to the company’s 2017 annual report.
First Quantum and Northern Dynasty announced a framework investment agreement Dec. 18 under which the former could invest up to $1.35 billion in Pebble to buy a 50 percent interest in Pebble Limited Partnership, the project operating company.
First Quantum made an initial $37.5 million option payment to Northern Dynasty to support permitting costs shortly after the deal outline was announced, according to Northern Dynasty officials. The company is expected to make a decision on the overall agreement in the second quarter of this year.
Chiang noted that he and then-City of New York Comptroller John Liu in 2013 expressed their concerns about Pebble to Northern Dynasty’s then-partner Rio Tinto, a mining major, and Rio Tinto divested its share of Pebble in April 2014.
Northern Dynasty has said it will need a large investment partner to help fund mine permitting and development.
Elwood Brehmer can be reached at [email protected].