Pebble Mine Company Releases Study On Economic Impact From Project; Opponents Respond

The embattled Northern Dynasty Minerals, the Pebble Mine’s chief investor, has suffered a series of defeats and embarrassing scandals as its Bristol Bay project fell apart, has a new glimmer of hope in the form of the State of Alaska calling on the Supreme Court to intervene.

Today, Northern Dynasty, despite having its project halted by Environmental Protection Agency protections, released a new economic impact study – they refer to it as a Preliminary Economic Assessment” – that reflects the company’s expectations for the project. Here’s a sample of what the report says:

“The proposed mine for the Pebble Project would provide good-paying, year-round employment for thousands of Alaskans, something desperately needed in Southwest Alaska,” said Ron Thiessen, President and CEO of Northern Dynasty. “The mine would mean substantial tax revenues for Alaska, including contributions to the Alaska Permanent Fund, which will be important for the future economic sustainability of the region. New infrastructure developed to support the proposed project would offer the additional benefit of potentially lowering energy costs for the region.  The July 2020 Environmental Impact Statement of the Pebble Project (the “FEIS”) states that the proposed mine can be developed and operated without harming the fishery, and so, with Alaska’s excellent track record of managing all its resources for the benefit of its people, it can have BOTHthe mine AND the fishery.”

The 2023 PEA was prepared to accomplish several objectives.  The report is an independent review of the project that provides cost and price estimates to reflect current economic volatility.  It includes an infrastructure plan that uses the “southern route” for project access as defined in the original permitting application for the Pebble Project.  In addition, the 2023 PEA updates the status of the Environmental Protection Agency (“EPA”) Final Determination and United States Army Corps of Engineers (“USACE”) Record of Decision Appeal processes (see Northern Dynasty January 31, 2023 and July 28, 2023 news releases, respectively). …

The Proposed Project would be capable of processing 1.3 billion tons of mineralized material over 20 years of mining at a low strip ratio of 0.12:1, with an average annual mine operating cost of $14.17/ton.  Average annual metal production is forecast to be 320 million lb copper; 368,000 oz gold; 15 million lb molybdenum; 1.8 million oz silver and 10,000 kg rhenium, with Life-of-Mine metal production of 6.4 billion lb copper; 7.4 million oz gold; 300 million lb molybdenum; 37 million oz silver; and 200,000 kg rhenium. 

The forecast financial results of the Proposed Project with third parties providing key infrastructure (the “Base Case”) are tabulated below.  On July 27, 2022, Northern Dynasty announced a Royalty agreement by which the Royalty Holder has the right to acquire five Royalty tranches. Currently, the Royalty Holder has acquired one tranche but the table provides the financial results assuming all five tranches of the Royalty are acquired.

In June 2021, Pedro Bay Corporation (“PBC”) announced they had signed an agreement whereby a fund had obtained an option to buy portions of their land to create a conservation easement. PBC and the fund announced the exercise of the option in December 2022. While the Pebble Partnership has not explored the full range of options available to it with this announcement, its current assumption is that the northern route defined in the FEIS is no longer practicable and thus does not qualify as an alternative as defined by the Clean Water Act (“CWA”). Accordingly, the 2023 PEA analyzes the amended version of the southern transportation alternative proposed by the Pebble Partnership for the transportation route in its original 2017 permit application.

Those in and out of Alaska who have been opposing the project for years have cited the risk such a mine would have in the vicinity of Bristol Bay’s salmon runs. Today’s report is sure to be questioned. Here’s a statement from Bristol Bay Defense Fund:

Bristol Bay Defense Fund Responds to North Dynasty Minerals’ Pebble Project Technical Report 

(Dillingham, Alaska) — This week, Northern Dynasty Minerals — the company behind the recently rejected Pebble Mine project in Bristol Bay, Alaska — announced they will release an assessment detailing the alleged economic benefits of a hypothetical operational mine. 

The assessment falsely claims that the Pebble Mine can be built and fully developed without harming Bristol Bay or the people, salmon, and sustainable economy the watershed supports. In fact, the Biden Administration and Trump Administration both found that the Pebble Mine would harm Bristol Bay’s salmon fisheries and thus rejected the project.  

In response, the Bristol Bay Defense Fund issued the following statement:

“This assessment is nothing more than patching tape on a sinking ship. Alaskans don’t want Pebble Mine to be built, and the EPA’s decision made it clear that it will not be built – no matter how fanciful Northern Dynasty’s illusions are. The only thing Northern Dynasty is mining at this point are the pockets of their investors and shareholders. The public wants protections for Bristol Bay’s critical salmon fisheries, not more misleading figures from a foreign-owned mining company desperate to salvage this unpopular and dangerous mine.”

This assessment comes shortly after Northern Dynasty Minerals agreed to pay millions of dollars after being sued by a group of investors who were misled about the size and scope of the proposed Pebble Mine project. This settlement is one of many instances where the company misrepresented the size and duration of the proposed project in their permitting mine plan, which resulted in the U.S. Army Corps of Engineers conducting an environmental review of a fantasy mine one-tenth the size of the project the company actually intended to build and operate. 

Additional Information: 

Earlier this year, the Environmental Protection Agency (EPA) issued 404(c) Clean Water Act protections that rejected the Pebble Mine due to the adverse risks posed to Bristol Bay’s waters and the surrounding ecosystem. Recent polling shows a strong majority (74 percent) of Alaskans remain concerned with permanently protecting Bristol Bay from large-scale mining, and nearly two-thirds (63 percent) are supportive of legislation that would protect Bristol Bay from large-scale mining forever.

To address the remaining threats in the fight to protect Bristol Bay, the Bristol Bay Defense Fund launched the campaign, “Bristol Bay Forever,” in an effort to fight for the majority of Alaskans who are concerned with protecting Bristol Bay from large-scale mining and to secure permanent protections for the entire Bristol Bay watershed, and nothing less. 

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The Bristol Bay Defense Fund is a broad coalition of local, state and national groups representing Bristol Bay Tribes, commercial fishermen, businesses, and conservation nonprofit organizations including the United Tribes of Bristol Bay, Commercial Fishermen for Bristol Bay, Businesses for Bristol Bay, SalmonState, Wild Salmon Center, Native American Rights Fund, and Natural Resources Defense Council. 

We’ll update this with more reaction as it becomes available.