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Pebble backers hope Trump administration breathes new life into mine project

  • Author:
  • Updated: December 26, 2016
  • Published December 24, 2016

WASHINGTON — The companies behind a decade-long effort to build a massive gold and copper mine in Alaska's Bristol Bay region are hoping the new administration of President-elect Donald J. Trump will breath new life into their struggling efforts.

Trump was adamant during his campaign that he would pull back government oversight for natural resource projects, limiting the scope of environmental regulations and slowdowns that stand in their way. His pick to head the Environmental Protection Agency, Oklahoma Attorney General Scott Pruitt, has been a staunch courtroom opponent of what he sees as federal overreach.

So now, the company is "hopeful," said Mike Heatwole, vice president for public affairs with Pebble Limited Partnership, the company created to ferry the project through to its golden end.

The course of the proposed Pebble mine has been rocky, a long affair that has been dragging through the courts for years since the EPA determined that there was no way the project could go forward without damaging the Bristol Bay watershed and the associated salmon industry. The proposed mine site is near salmon streams that produce some of the largest runs of sockeye salmon in the world. Currently, Pebble and the EPA are engaging in legal mediation.

They expect that the Trump administration, and Pruitt at the EPA, will quickly reverse the agency's course and allow the company to apply for an Army Corps of Engineers permit.

Bristol Bay opponents of the project are "disappointed with what we think is coming down the pipe" from the EPA under the Trump administration, said Alannah Hurley, executive director of the United Tribes of Bristol Bay.

She noted particular concern with Pruitt. Hurley cited a recent New York Times article that extensively quoted a major supporter of the nominee, Andrew P. Miller, whose clients include a Pebble mine backer.

But expected support from the Trump administration doesn't mean it's a done deal, Heatwole stressed. The permitting process will take years.

And if the company can gather the dozens of necessary state and federal sign-offs, they still have to get the project past the Alaska Legislature. In 2014, 65 percent of Alaska voters approved a ballot measure that would give the Legislature a say on whether to ban mining, if lawmakers believe a project would endanger wild salmon stocks, adding another layer to the approval process. (Voters rejected a 2008 effort to simply ban large-scale mining in the region.)

In 2014, the EPA issued an unusual preemptive "veto" over the project's necessary Army Corps of Engineers permit. The agency said in-depth research into the area's ecology showed that there was no way a large-scale mining project could move forward without detrimental impacts. Bristol Bay Native groups sought out help from the agency.

Heatwole said company officials believe Pebble hasn't been given a "fair treatment from EPA under the Obama administration." And the "president-elect ran on a campaign to push back on federal overreach," he said, noting that Pruitt's selection as EPA administrator nominee seemed likely to carry that promise forward.

"For us it means the opportunity and ability to bring forward a plan of development and initiate the permitting process via the Army Corps of Engineers," which will be a "rigorous, science-based review of all of the information," Heatwole said.

Before the EPA issued a preemptive "veto" of the project's federal permit, Pebble and its financial backers were criticized for years for failing to apply for a permit as they waited out the Obama administration.

But it's not a simple matter, Trump administration or not.

Heatwole said the company, which has lost most of its financial backing save for Canadian mining company Northern Dynasty Ltd., will have to find new financial supporters — both before applying for a permit and, if it gets mining authority, before construction begins. The company will "clearly need to secure additional financing to get us into the next phase," he said.

But the market is optimistic too.

Shares in Northern Dynasty, which is now the sole owner of the Pebble deposit in Southwest Alaska, have surged upward nearly 130 percent since the election, starting with a bump on Nov. 9. Still, the price per share — $1.72 at close of markets on Thursday — is a far cry from its peak of $22.01 in February 2011.

Northern Dynasty needs new financial partners to see the project through. Partner Anglo American Plc pulled out in 2013 after spending more than $500 million, and Rio Tinto gave its 19.1 percent stake to charity after EPA issued its 2014 veto.

Investors in Pebble have spent several hundred million dollars in testing and pursuit of permits since 2007. (The company never filed for its federal permits, however.) The gold, copper and molybdenum below the ground is thought to be worth hundreds of billions of dollars.

But efforts to rebuff the project have not been put on hold, Hurley said.

Earlier this month, the United Tribes of Bristol Bay and others urged the Alaska Department of Natural Resources to put more stringent requirements into a permit renewal for Pebble Partnership's exploratory work in the region.

The Miscellaneous Land Use Permit is set to expire on Dec. 31. A spokesperson for DNR did not respond to a request for more information about the permit's status.

"They need the permit to do reclamation and to store their equipment out there," Hurley said. The tribes are asking for more "robust monitoring" and stringent cleanup of equipment that has been left in the area, she said.

The permit renewal is just a preliminary part of a permitting process for construction that has not yet begun. To get the project underway would be a "multi-year undertaking," Heatwole said.

There are nearly 60 "major classifications and approvals required for development," and that includes up to 100 individually approved stream crossings from the Alaska Department of Fish and Game.

Nevertheless, in some Republican circles, the hope is that the long timeline of permitting can be sped up.

"It's certainly something that we would like to have conversations about," Heatwole said. Across mining, building and extraction industries, many "believe there has to be a way to get more time certainty in permitting," and make the process more efficient, he said.

Whether the group will be able to get a federal permit remains unknown. But advocates both for and against the mine agree — it will be much easier.

"Regardless of who the president is and the leadership in the state and nation, the people of Bristol Bay remain overwhelmingly opposed to this project, and committed to protecting our fish and our way of life," Hurley said.

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