EPA Leans Towards Blocking Controversial Alaska Pebble Mine

Alaska’s giant copper Pebble mine project may be on its last legs.

The U.S. Environmental Protection Agency (EPA) started a process on Friday that is likely to end up killing the proposed mine, constituting a major blow to its developers. The move comes weeks after a critical report released in January on the mine’s environmental impact that warned the open pit mine could severely damage regional wetlands.

The EPA opened review of the project under its Section 404(c) Clean Water Act authority. Though no final decision has been made, the process could end in a veto or other restrictions for the $6 billion project. But mine developers and other parties have months to debate again and more public hearings could be scheduled.

Still, EPA administrator Gina McCarthy acknowledged in a call with reporters that Pebble advocates probably need to bring new information to the table, if they want to sway the EPA in the mine’s favor. The debate over the controversial mine has been going on for years, and developers may need to redouble efforts to convince environmental activists and officials.

“Three years of scientific assessment provided ample reason for the EPA to believe that a mine of the size and scope of the Pebble mine would have significant and irreversible negative impacts,” said McCarthy on a media call. “The Bristol Bay fishery is an extraordinary resource and is worth out-of-the-ordinary agency actions to protect it.”

In an unusual move, the review was announced before Pebble mine developers had submitted permits for the project. During the review, permits cannot be approved by the U.S. Army Corps of Engineers. Similar past reviews have taken about a year on average to conclude.

Pebble Partnership CEO Tom Collier, who represents the developers, told IBTimes they haven’t yet ruled out submitting permits in 2014, even if they can’t be approved during an ongoing review.

“We kind of saw this coming,” said Collier. “I think the administrator is dead wrong … I think the Administrator McCarthy has gotten out there before her own scientists.”

Collier has filed a request with the EPA’s inspector general, asking for an investigation into how the EPA’s important environmental report was prompted. He criticized the science behind the report and said it relied upon studies from mine critics.

“This watershed assessment had a pre-determined result that the EPA caused to happen, and I think the inspector general will investigate that,” said Collier.

Other mine executives have said in the past that such an EPA action represents government overreach, which could chill mining developments across the country.

The agency’s most recent veto of a project under the 404(c) Act came in 2011, scuppering a mine project which hadn’t yet submitted permits. The West Virginia coal mine project was known as the Spruce surface mine. EPA officials insisted on the call that the Pebble review had no implications for its broader policy or other mine permits.

“This is an authority we use sparingly for exceptional situations,” said EPA regional administrator Dennis McLerran. “Bristol Bay is the home of the largest salmon fishery in the world … Bristol Bay produces nearly half of the world’s sockeye salmon.”

The EPA’s decision is a response to a 2010 petition launched by native Alaskan tribes who live near the proposed mine site. Bristol Bay tribes have lived off the local salmon ecosystem for at least 4,000 years, according to McLerran.

According to the EPA, local salmon fisheries provided $490 million in direct economic impact in 2009 and now support 14,000 jobs. Developers counter that a new mine could support 15,000 new jobs and boost local tax revenues.

“This is good news, but how good is yet to be determined,” wrote Anchorage attorney Geoff Parker, who represented the tribes in their initial petition, to IBTimes. “We will need tough standards from the EPA in a 404(c) determination.”

He added that the EPA’s action doesn’t address other potential large-scale mines in the Bristol Bay area, though it may make it harder for them to succeed.

Chief Pebble developer Northern Dynasty Minerals Ltd. (TSX:NDM) planned to file permits later this year. It lost Anglo American PLC (LON:AAL) as a partner in September and saw the world’s largest miner Rio Tinto PLC (LON:RIO) review its stake in the project in January.

“Mining the Pebble deposit will involve excavation of the largest open pit ever constructed in North America,” said EPA chief McCarthy. “It’s just an extraordinary set of circumstances in Bristol Bay that really deserves this special type of consideration.”

Despite the EPA’s important opposition, Pebble mine execs hung onto their hopes for the project.

“I didn’t see this as much of a significant development,” said Collier. “I think that we’ll prevail.”