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The announcement of a potential partnership for the Pebble Mine project resurrected hopes the copper and gold mining project would finally move forward in Alaska.
In twin statements, Northern Dynasty Minerals Ltd. and First Quantum Minerals Ltd. both revealed the framework for an option agreement that would give First Quantum a right to acquire a 50 percent interest in the Pebble Limited Partnership for $1.35 billion after a four-year installment plan totaling $150 million.
“We have made good progress in the partnering process and are very pleased to be in advanced-stage discussions with First Quantum, an industry leader in mine development and management,” Northern Dynasty President and Chief Executive Officer Ron Thiessen said in the announcement. “Just as importantly, the immediate capital contribution from First Quantum will allow Northern Dynasty to execute on its plan to move the Pebble Project forward to initiate federal and state permitting in the very near-term.”
The four $37.5 million annual payments from First Quantum will help pay for ongoing environmental analysis and regulatory permitting processes to advance the Pebble Project, according to company statements.
The permitting and review process will likely be contentious, as opposition from the fishing industry, native tribes, and environmental organizations continues, including a new coalition, Businesses for Bristol Bay, opposing the project.
The mine was thought to be dead after the Obama administration attempted to preemptively nix the mine in 2014 using Environmental Protection Agency protections under the Clean Water Act, effectively preventing the project from ever entering the permitting phase.
Freedom of information requests conducted after the 2014 decision revealed documents showing the agency “orchestrated opposition to the mine” with opponents.
“We will soon initiate the permitting and review process with a much smaller and more environmentally sensitive plan for a mine at Pebble,” said Pebble Limited Partnership Chief Executive Officer Tom Collier in a statement. “We are very pleased to have the financial resources to move through that process. This thorough and comprehensive process allows everyone an opportunity to express their views about Pebble.”
“The Option Agreement is an important opportunity to carry out a detailed assessment of the Pebble Project which is widely acknowledged to be one of the outstanding unmined copper projects in the world,” Philip Pascall, Chairman and Chief Executive Officer of First Quantum said.
Mining at Pebble could deliver up to 26 million tons of copper, 70 million ounces of gold and 1.5 million tons of molybdenum, Pascall said. Estimates place the mineral deposit’s value at between $300 to $500 billion.
“This initial investment by a well-established copper mining company speaks volumes about the economic opportunity Pebble represents to Alaska,” Collier said. “Pebble development could make a significant contribution to Alaska’s economy and provide year-round jobs for Southwest Alaska. Additionally, Pebble could provide important revenue to state and local governments.”
The option agreement does not guarantee a commercial arrangement until finalization in the second quarter of 2018, the companies said.
But the project faces renewed headwinds.
A December 12 ad featuring former EPA administrators under previous administrations opposing the project was based on incomplete information, a company spokesman said.
“If they are interested in being fully informed, our door is open,” Pebble spokesman Mike Heatwole told E&E News. “It is a bit surprising that they do not trust the [National Environmental Policy Act] process that they used to administer.”
“We are very aware of the environmental and social sensitivity of this project and will utilize the lengthy option period to apply our extensive project development and operating experience to ensure that this project can be developed with the support of stakeholders,” Pascall continued.
“We will continue to expand our Alaska team and engage with Alaskan firms to help us advance Pebble through the permitting process. We look forward to 2018 and more open dialogue with all stakeholders about our mine plan,” Collier said.
Pebble Partnership spent more than $700 million preparing for a permitting process the Obama administration never allowed to proceed. The EPA decided in February 2014 to halt the company’s ability to proceed with an environmental analysis that would only kick off a lengthy permitting process. Normally, the permitting of such a project would begin with the Army Corps of Engineers’ review, not the EPA.
The unusual intervention by EPA put other mining projects across the West at risk, according to John Shively, now Chairman of the Pebble Partnership. In 2013, he argued that Obama-era decision-making to “preemptively veto” mining projects before they even had the chance to submit a permit application could lead to blocking other mining activity in the Great Lakes and Upper Colorado River Basin region on Colorado’s Western Slope.
“The preemptive veto is the ultimate weapon against not only mining, but all resource-development industries,” Shively wrote in an op-ed.
A new administration gave renewed life to the project’s prospects by rejecting the 2014 agency determination to prevent Pebble from seeking to initiate the permitting process itself.
In reversing the previous administration’s decision in 2017, EPA Administrator Scott Pruitt halted the agency’s ascent to “superregulator” status able to deny not just permitting, but access to the permitting process and environmental reviews that should be a part of a “transparent federal process,” according to a Wall Street Journal house editorial.
