YEAR IN REVIEW: Pebble promises permit application after hurdles fall

  • Pebble Limited Partnership CEO Tom Collier, seen here testifying to Congress as opponents wear anti-Pebble buttons behind him, has said it plans to file permit applications for a smaller mine as soon as the fast-approaching end of 2017. (Screen capture via YouTube)

This was the first good year in a long time for Pebble Limited Partnership and its owner Northern Dynasty Minerals and equally as bad a year for those trying to stop the massive mining project.

After months of talks, the Environmental Protection Agency and Pebble Partnership settled a lawsuit in May that the company filed against the agency in 2014. The suit claimed the EPA, under the Obama administration, was biased in its drafting of the Bristol Bay Watershed Assessment and colluded with anti-mine scientists to reach the conclusion that a large, open-pit mine would cause too much damage to the region’s fisheries.

The 1,000-plus page assessment was the basis for the EPA’s 2014 attempt to use its Clean Water Act authority to ostensibly prohibit development of Pebble.

Per the settlement, the EPA is in the process of withdrawing its Clean Water Act 404(c) proposed determination and Pebble has 30 months and counting from the time of the May 12 agreement to file for the project’s federal permits.

However, Pebble also agreed that the watershed assessment, the only official scientific document examining the potential impacts of the project, would remain valid. The EPA under the Trump administration is just not invoking it any longer.

In early October Pebble released a new, smaller mine plan than original concepts that entails a reduced overall footprint and fewer roads to reach it by way of a ferry across giant Iliamna Lake.

Pebble executives left open the possibility of expanding the mine after initial development and noted that would require a separate permitting process of its own.

They also proposed setting up a corporation to distribute revenue from the mine to local Native village corporations and directly to area residents once it is in production.

Most recently on Dec. 18, Northern Dynasty and fellow Canadian mining company First Quantum Minerals announced the framework of an investment deal in which First Quantum could put $150 million into the project over up to six years.

The first $37.5 million would go towards permitting costs but First Quantum is still evaluating whether or not to finalize the potential investment, according to its press release about the deal. It could also buy a 50 percent stake in the project for $1.35 billion, according to Northern Dynasty.

The parent company to Pebble has said it will need a large investment partner to help fund development and wants to secure one by the end of the year. Additionally, Pebble leaders have said they plan to file environmental permit applications by the end of 2017, which is coming soon.

(Editor's note: This story has been changed to correctly state that the EPA is in the process of withdrawing its 404(c) proposal, but has not done so yet.)

No. 2: Habitat initiative heads to Supreme Court

Three Alaskans from Bristol Bay and Talkeetna filed a proposed ballot initiative to overhaul the state’s anadromous fish habitat permitting requirements and another fight over what are acceptable rules for development in and around salmon habitat has predictably followed.

Proponents contend the “Stand for Salmon” initiative would give the Department of Fish and Game much-needed enforcement authority over unlawful salmon habitat disruption, which they say it currently lacks. They further note the state actually has no formal permitting structure for development in salmon habitat; rather, just a couple vague lines of statute that direct the department to authorize projects that provide “proper protection of fish and game.”

In a June 30 letter to the sponsors, the Department of Law deemed the first iteration of the initiative an unconstitutional allocation of resources and would prohibit projects such as the Pebble and Chuitna mines and Susitna-Watana dam, which the initiative sponsors have opposed.

After the sponsors revised the initiative, Lt. Gov. Byron Mallott still rejected it based on the opinion of Law Department attorneys and wrote that the measure “essentially usurps the Legislature’s resource allocation role.”

He has insisted the state’s position is based on the constitutional implications and has nothing to do with the politics.

In an interesting twist, Elizabeth Bakalar, the assistant attorney general assigned to the matter, said the June 30 letter was in large part a response to industry concerns about the initiative that the department heard. It is the same type of opinion state attorneys issue on any ballot measure, except earlier, she said.

She commented that the department isn’t likely to issue “courtesy” opinions in the future because this one has been incorrectly perceived as the state helping the petitioners. However, it could just as easily be seen as a way to calm development industry concerns by clarifying ahead of time that the initiative would not be certified.

The petitioners appealed to the Superior Court and Oct. 9 Judge Mark Rindner overturned Mallott’s decision, meaning the initiative could be put on the 2018 ballot.

The state Supreme Court has instructed lower courts interpret initiatives broadly to give voters a say whenever possible, Rindner noted in his order.

The state appealed Rindner’s ruling to the Supreme Court Oct. 25. The high court has since been quiet about its path forward and in the meantime the sponsors are gathering the required signatures to place it on the 2018 general election ballot.

No. 3: NANA rebound

High zinc prices made it a much better year for NANA Regional Corp.

NANA, the Native regional corporation for Northwest Alaska, owns the Red Dog Mine — one of the largest zinc mines on Earth — that is operated by Vancouver-based Teck Resources Ltd.

In September, Teck said it expects production from Red Dog to be between 525,000 and 550,000 metric tonnes this year. Output in that range would be about 10 percent above prior production forecasts.

Zinc sold on spot markets for between 80 cents and about $1 per pound for several years before dipping to 70 cents per pound in early 2016. Since, the corrosion-resistant metal commonly used in steel coatings has steadily increased in value to its current spot price of about $1.45 per pound.

NANA CEO Wayne Westlake said Red Dog’s increased revenue of late has largely made up for the recent decline in 7(i) distributions brought on by $50 oil. He noted that the resource development payments — required to be shared among the 12 Native regional corporations, with NANA a major contributor for its mineral royalties — are often one of few private cash flows going into rural Alaska communities.

While the oil price depression hit Native corporations through revenue sharing, NANA is also among the group of corporations that is heavily invested in the business side of Alaska’s oil and gas, with seven subsidiary firms working on the support services side of the industry in Alaska, Colorado and the Gulf Coast.

About 40 percent of NANA’s revenues come from the oil and gas sector in some fashion, according to company leaders.

That led to NANA absorbing a $109 million loss in 2016 and its business operations company, NANA Development Corp., also had its credit rating downgraded last year as a result of its oil business struggles.

No. 4: Ambler Road permitting begins with AIDEA in lead

Development of the Ambler Mining District road project is now in federal hands.

The Bureau of Land Management issued a Federal Register notice Feb. 28 requesting public input regarding what topics the agency should consider in drafting the environmental impact statement, or EIS, for the mining access road.

Early environmental and financial study work for the proposed gravel road running west from the Dalton Highway for 211 miles to the remote Ambler Mining District has to this point been led by the state Department of Transportation and more recently the Alaska Industrial Development and Export Authority.

The Ambler Mining District stretches for about 75 miles along the southern flank of the Brooks Range in the upper Kobuk River drainage. It has long been identified as an area of great potential for copper, zinc and precious metals but access issues have largely inhibited development.

Vancouver-based Trilogy Metals Inc., formerly NovaCopper, is one company that has been busy exploring multiple prospects in the region. According to Trilogy, its well-defined Arctic deposit in the Ambler district likely holds about 2.3 billion pounds of zinc, more than 1.7 billion pounds of copper, 40 million ounces of silver and a small amount of gold.

No. 5: Southeast exploration

Alaska Mental Health Trust Land Office officials keep plugging away at their heavy mineral prospect on the Gulf Coast near Yakutat.

In October, the Mental Health Trust Authority Board of Trustees approved $3 million more for exploration at the Icy Cape prospect in 2018.

The prospect is a long stretch of coastline about 75 miles northwest of Yakutat in Southeast Alaska owned by the trust at the entrance of Icy Bay that appears to hold world-class deposits of several heavy minerals. The entirety of the area is roughly 48,000 acres and stretches for more than 30 miles along the Gulf of Alaska coast.

Trust Land Office leaders have stressed that they are still in the preliminary exploration phase of evaluating the prospect but early drilling samples from the broad delta at the point of the cape indicate the ore there could be up to 40 percent heavy minerals.

Overall, an average of 26 percent of the sands are heavy minerals, according to the Trust Land Office reports.

The minerals of value in the “ore” — which is mostly old beach sands — are roughly equal portions of epidote and garnet in the areas of highest concentration with small amounts of zircon and even gold.

Epidote and zircon are semiprecious gemstones. Garnet has also been used as a gemstone for hundreds of years, but more recently the hard mineral has been put to use as an industrial abrasive on sandpapers and in sandblasting applications. It is also used in water filtration; garnet’s small pores allow for the passage of liquid while catching some contaminants.

If developed, the Trust property would be the only source for garnets on the West Coast, Land Office officials have said.

12/21/2017 - 8:38am