TORONTO (miningweekly.com) – The discord between Canadian mining hopeful Northern Dynasty Minerals, which plans to develop the Pebble polymetallic deposit in Alaska, and the US Environmental Protection Agency (EPA), which had started a seldom-used regulatory process under the Clean Water Act (CWA) to pre-emptively veto the project, is coming to a head after Northern Dynasty on Thursday filed suit in the US District Court for Alaska to halt the process.

Northern Dynasty’s subsidiary, the Pebble Limited Partnership (PLP), complained that without a permit application in hand, the EPA's CWA Section 404 (c) regulatory process, which started on February 28, exceeded the federal agency's authority and violated the Alaska Statehood Act, among other federal laws.

"While Congress provided EPA a legitimate and important role in assessing CWA 404 permits, it is clear that the US Army Corps of Engineers (USACE) is the lead federal agency for such permits and that the State of Alaska also has a central regulatory role to play," Northern Dynasty president and CEO Ron Thiessen said.

He added that the “EPA’s unilateral process to pre-judge Pebble before a project is proposed or permits are sought not only undermines the legitimate authority of the USACE and the state, it would also establish a damaging precedent that will have significant long-term effects on business investment in Alaska and throughout the US”.

The PLP's complaint explains that, while the EPA has authority under the CWA to veto Section 404 ‘dredge’ or ‘fill’ permits issued by USACE, if it determined the permitted activity posed an unacceptable risk of adverse effects to aquatic resources, it must do so based on an actual permit specifying both a specific disposal site and specific fill material.

The CWA does not provide EPA the power to proactively veto potential uses of state land in the absence of a permit application or approval, noting the US Supreme Court has repeatedly recognised that, “regulation of land use, as through the issuance of development permits … is a quintessential state and local power”.

The PLP also held that the EPA's regulatory process was contrary to the Alaska Statehood Act and other federal legislation by which the Pebble lands were granted to the state, stating that, “A veto would be an unlawful revocation of Alaska's statutory right to select and develop minerals on these lands.”

The PLP, the State of Alaska, as well as Alaska business and Native groups, had called on the EPA to stand down from its unprecedented, unilateral and pre-emptive regulatory process, and to wait for PLP to submit a development proposal for Pebble and for the USACE to undertake an environmental-impact statement (EIS) review process under the National Environmental Policy Act (Nepa).

The EPA would retain its statutory authority to participate in the Nepa process to come, and as no development can be started without the requisite permits, no environmental harm can occur during the Nepa process.

"Thus far, the EPA has refused our and others' repeated requests to allow Pebble to be reviewed via an objective, exhaustive, transparent and inclusive EIS process under Nepa. At this point, we feel we have little choice but to petition the federal court to issue an injunction to halt a regulatory process we believe is contrary to law,” Thiessen said.

Last month, mining major Rio Tinto gave away its 19.1% holding in the company to two Alaskan charities.

The decision followed the strategic review announced last year of Rio Tinto's interest in Northern Dynasty, which concluded the Pebble project did not fit with Rio Tinto's strategy. Anglo American pulled out in September, as part of its plan to cut the cost of future options.

Despite its potential to support 15 000 jobs and contribute $2.5-billion-plus a year to US gross domestic product over decades of production, the concern of the local Eskimo fishing community centres on Bristol Bay’s ‘renewable’ wild salmon fishery being negatively impacted on by the ‘nonrenewable’ Pebble mine potentially disposing waste into fishing waters.

The Stop Pebble initiative argues that the proposed Pebble mine will be gouged out of an "American paradise" that is filled with salmon, bears, moose, caribou, wolves and whales and that has sustained local livelihoods for thousands of years.

More than 67 varieties of state and federal permits will be required before construction can begin and more than a dozen state and federal entities will oversee the process.

Acquired by Northern Dynasty in 2001, Pebble is, however, a project that could help to close the economic void that is being left by depleting Alaskan oil.

WORLD-CLASS POTENTIAL

The project proposes to construct a large openpit mine; an on-site milling facility; on-site storage for rock, ore and tailings; a port facility; an access road connecting the mine site to the port; an on-site water supply for the mill; and to provide electrical power for the mine site, in south-west Alaska.

In addition, the project plans to include an on-site 378 MW gas-fired turbine plant, a 138 km transportation corridor to Cook Inlet for road and pipeline rights of way and a new deep-water port at Cook Inlet.

The project’s key assets are the near-surface 4.1-billion-tonne openpit-style Pebble West deposit and the deeper and higher-grade 3.4-billion-tonne Pebble East deposit, which is amenable to underground bulk mining methods. The Pebble resources rank among the world’s most important accumulations of copper, gold and molybdenum.

Estimates show that the Pebble deposit comprises measured and indicated resources of 5.94-billion tonnes, grading 0.78% copper equivalent and containing 55-billion pounds of copper, 67-million ounces of gold and 3.3-billlion pounds of molybdenum.

The deposit also has 4.84-billion tonnes of inferred resources, grading 0.53% copper equivalent and containing 26-billion pounds of copper, 40-million ounces of gold and 2.3-billion pounds of molybdenum.

Capital expenditure on Pebble is expected to reach between $6-billion and $8-billion.