Analysis: Breaking down the Pebble debate

People are having their say, once again, about the big Pebble mine project. The U.S. Army Corps of Engineers is holding hearings on a Draft Environmental Impact Statement, and the meetings are getting quite a turnout.

Anchorage’s Dena’ina Center was packed Tuesday afternoon for the hearing in that city.

Why is everyone so excited about Pebble? Here’s what it’s about:

Pebble is a large, undeveloped mineral discovery in the hills 18 miles north of Iliamna, which is about 200 miles southwest of Anchorage.

People in the region, particularly in Bristol Bay, worry that pollution from the mine could damage rich salmon fisheries. There are others more open to the proposal, however, because it would bring high-paying jobs and economic development to communities near Pebble that are losing population and with their schools being closed.

The deposit contains mostly copper but also gold and molybdenum. It was first discovered in the 1980s by Cominco, a large mining company, which did limited exploration but judged the deposit to be uneconomic because of its remote location and the low grade of its ore.

In 2001 a minerals exploration company, Northern Dynasty Minerals, Ltd., of Vancouver, B.C., purchased the mining leases, which are on state lands, and explored further.

A lot more ore was found and, interestingly, the ore grade was founds to be higher at greater depth. Northern Dynasty felt a mine might be possible if it were large enough to gain economies of scale in mining lower-grade ore.

Plans were developed for a surface, or open-pit, mine that would initially target parts of the ore body near surface. It would be similar, although larger, to surface mines that now operate in Alaska, at the Fort Knox gold mine and Red Dog lead-zinc mine north of Kotzebue.

A subsidiary to Northern Dynasty was formed, Pebble Partnership, Ltd. to develop a mine.

The initial reaction against Pebble was from operators of upscale sports fishing lodges in the region. Part of their concern was over potential pollution from a mine at Pebble but another part was that a vast and pristine wilderness-type area would be opened to development with roads and infrastructure and new people.

The sports lodge operators enlisted the help of a wealthy Anchorage businessman, Bob Gillam, who also owned a fishing lodge. Gillam financed a public relations and lobbying campaign against the mine.

That helped bring fisheries groups from the larger Bristol Bay region into the fight. Since Pebble was located at the head of steams feeding into salmon-supporting rivers and lakes, there were fears that contamination from the mine would seep into waters and damage a world-famous salmon fishery.

Meanwhile, Northern Dynasty continued work, investing in more exploration, conceptual engineering and environmental research. It was always known that Northern Dynasty would have to bring in large experienced mining companies as partners, and in fact three large companies, Rio Tinto, Anglo American and First Quantum Miners, had stakes in Pebble at different times.

Eventually all three companies withdrew. Their reasons were varied. Anglo American went through a corporate restructuring and shed several of its projects that seemed marginal, Pebble among them. Rio Tinto may have had similar motives.

First Quantum’s reasons were not known but the company’s managers and shareholders were vigorously lobbied by the Natural Resource Defense Fund, a major U.S. environmental organization that opposes Pebble.

For large companies the growing political campaign against Pebble was a concern because large publicly-traded companies don’t like environmental protesters showing up outside corporate offices or at shareholder meetings unless the prize was really worth it, which with Pebble there may be doubts.

Meanwhile, Pebble’s opponents enlisted the U.S. Environmental Protection Agency, under President Barack Obama, to initiate an unusual regulatory action to foreclose large mine development in the Bristol Bay region. The action was targeted at Pebble.

This chilled Northern Dynasty’s ability to bring in new partners, which was a key part of the opposition strategy.

EPA’s action was always seen to be bad precedent and of uncertain legal validity but it was never tested in court because President Donald Trump was elected and the EPA’s initiative was terminated.

Trump’s election, however, cleared the way for Pebble Partnership to prepare its applications for federal permits. Those required further engineering and investment. To date about $850 million has been invested in Pebble including $150 million in environmental monitoring and research.

Pebble Partnership filed its permits and also downsized the project, hoping to mitigate concerns. It doesn’t appear to have done that.

Once permits were applied for the U.S. Army Corps of Engineers began an Environmental Impact Statement, or EIS, process. That is now done and a draft EIS was published Feb. 20, 2019, and public hearings by the Corps are now being held. If the Corps sticks with its schedule a final EIS and a Record of Decision will be issued in mid-2020. If that happens the action would basically approve the federal permits.

However, Pebble has yet to file for State of Alaska permits, which include an important dam safety permit.

The state Division of Lands and Water Management, which is a part of the state Department of Natural Resources, will process many of the applications for Pebble’s permits when they come in, along with the Department of Environmental Conservation. The Department of Fish and Game also has a key role.

Tom Collier, CEO of Pebble Partnership, said his company realized the sheer size and scale of the original mine proposal had spooked people. The project still faced big regulatory hurdles even with President Trump in Washington, D.C. and a new, pro-mining governor, Mike Dunleavy, in Juneau.

A scaled-down mine, which is proposed in the applications to the Corps, covers a much smaller “footprint,” Collier said in a briefing to legislators in Juneau. It eliminates the large-scale use of cyanide and makes major changes in the “tailings,” or waste rock, storage.

One change that is important is that the mine facilities have been relocated outside of the Upper Talarik Creek watershed, from where waters flow to Lake Iliamna and eventually Bristol Bay. However, they are still located in another watershed supporting the Koktuli River, which flows into the Mulchatna River to the Nushagak River and Bristol Bay.

The concern is that any contamination to these watersheds could affect salmon spawning stream.

At the mine itself there would be a large bulk-tailings facility holding 85 percent of the waste rock which will be basically inert, and a smaller facility holding a quantity of “pyritic” tailings that have the potential for generation of acid drainage.

The smaller pyritic tailings facility would be lined with an impermeable layer, following advanced industry practice, to prevent seepage. When the mine is decommissioned these will be moved to the main mine pit and be covered by water, which will prevent contact with air and the formation of acidic fluid.

The large bulk tailings facility, meanwhile, will incorporate a “flow-through” design to allow water to flow through the dam structure to a storage area. This would prevent a buildup of water above the dam, which would create pressure as water accumulated.

This design concept was not used in tailings dams that have failed, such as the Mount Polley dam failure in British Columbia, and recent dam failures in Brazil.

At mine closure the inert rock in the large bulk storage area will be covered with a liner and layer of soil, which would allow vegetation to grow,

A unique aspect to the Pebble design is a system to control the release of water at optimal times for the support of fish habitat, Collier said.

Collier told legislators in Juneau that if Pebble is developed it will have major benefits to the state’s economy as well as small communities near the mine and the Lake and Peninsula Borough.

The mine would pay an estimated $20 million a year in taxes to the borough and $66 million a year in taxes and royalties to the state. It would employ about 2,000 in construction and about 850 in permanent production jobs, which when indirect employments effects are added, such as including contractors, will also total about 2,000. Mining jobs pay well, Collier said, averaging about $100,000 a year.