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February 28, 2014 7:31 pm
A controversial plan to mine the world’s largest undeveloped copper deposit in Alaska is facing action from the US Environmental Protection Agency that could result in the project being blocked.
The EPA said on Friday it was exercising rarely-used powers under the Clean Water Act to investigate how to protect the abundant salmon fisheries of Bristol Bay on Alaska’s south coast from being harmed by waste from the proposed Pebble copper and gold mine.
While the investigation is under way, the US Army Corps of Engineers, which is responsible for approving waste disposal at the planned mine, cannot award any permits. At the end of the process, which could last into next year, the EPA has the power to block the project by denying permission for waste disposal.
Gina McCarthy, the agency’s administrator, said on a call with reporters that the action was “not the end of the road” for the project, but studies of the area had shown that the mine “would likely have significant and irreversible negative impacts” on Bristol Bay.
The area provides almost half the world’s supply of wild sockeye salmon.
Pebble is one of the largest examples of the tensions created by environmental opposition to mining projects, particularly in jurisdictions such as the US that are considered safe for investment but which also have tight environmental controls.
It is one of the world’s most significant undeveloped deposits, with its estimated 25m tonnes of copper putting it on a par with Freeport-McMoRan’s Grasberg mine in Indonesia, but has long been seen as environmentally contentious and difficult to develop.
The world’s biggest mining companies have been shying away from the project. Last year Anglo American withdrew from a joint venture to develop Pebble, taking a $300m charge and handing the project over to its former partner Northern Dynasty, a US and Canada-listed miner.
Rio Tinto said in December it was reviewing its shareholding, bought for more than $200m, with a view to a possible sale. It took a writedown of $131m on the value of its stake last year, and last week a Rio executive stepped down from Northern Dynasty’s board. Rio said in December it was focusing on other copper mines, including Grasberg, and two development projects, one in Peru and one in Arizona.
Northern Dynasty has previously said the mine would only affect a very small area and would improve the salmon habitat. It accused the EPA last year of being “biased and manipulative” in its assessment of the project.
Northern Dynasty says more than $700m has been invested in the Pebble project, which it expects would be one of the world’s lowest-cost sources of copper because of the large amounts of gold that could also be extracted. It also says Pebble would create 15,000 jobs and expand US copper output by 20 per cent.
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