New state laws or regulations that prevent development of the massive Pebble mine prospect could end up costing the state, which might have to compensate the claim holder for the value of the minerals in the ground, according to a legal opinion from the Legislature's lawyers.
The Pebble prospect in Southwest Alaska is in the headwaters of some rivers that feed Bristol Bay, which hosts the world's largest sockeye-salmon fishery. It also is touted by the company exploring it as one of North America's largest copper and gold deposits.
The proposed project has become mired in controversy because of environmental concerns. Opponents say it could damage the state's most lucrative commercial fishery as well as sportfishing and subsistence, and they are campaigning vigorously to stop any development.
Executives with Northern Dynasty, the company with rights to Pebble, have said that if they proceed with development, they can mine the minerals safely.
Among the unknowns Northern Dynasty is working on are the full extent of the minerals in place, how best to mine them and how to supply the massive amounts of power a mine would need.
Rep. Paul Seaton, R-Homer, said he asked for the legal opinion because he thought lawmakers should know the potential fallout of any action they might take affecting the development.
"The Legislature needs to look at the potential ramifications," Seaton said.
The 10-page memo by legislative counsel Donald M. Bullock Jr. says if the state were to block the development by taking back the land through the power of eminent domain or imposing excessive requirements for permits, it likely would have to pay the mining company, Northern Dynasty, just compensation.
Seaton, a commercial fisherman by trade, said he favors putting strict measures in place to protect the area's environment, fish and wildlife but is concerned that officials might be persuaded to take action that could require the state to pay Northern Dynasty for the value of the minerals in the ground.
"Just saying 'no' would bring some consequences," he said. "It could hugely impact Permanent Fund dividends and many other things."
The compensation could amount to billions of dollars, Seaton said, though the exact amount is unclear because it likely would be determined in court.
Bullock's memo said the court would determine the compensation by figuring the value of the minerals in the ground minus what it would cost to extract them.
Executives of Northern Dynasty did not return a phone call Friday.
In a recent presentation to investors, Northern Dynasty said the Pebble prospect has 49 billion pounds of copper, 65 million ounces of gold and 2.9 billion pounds of molybdenum, which together have a gross value of $92 billion.
Daily News reporter Richard Richtmyer can be reached at firstname.lastname@example.org or 257-4344.