Pebble Mine: Still Crazy After All These Years

As the Army Corps of Engineers ignores requests for a pause in its process, Northern Dynasty Minerals (aka Pebble Partnership) fails to address objections to its preposterous mine plan or fix fatal flaws in its environmental review.

There have been so many things wrong with the destructive Pebble Mine, for so many years—passionately expressed by so many voices—that it sometimes feels impossible to give its flaws the attention they demand. The Army Corps of Engineers—preparing to render a federal permit decision later this summer—could certainly attest to this if it cared more about the quality of its work and less about adhering to Pebble’s inflexible permitting timeline. 

It’s helpful from time to time to stop and simply list the reasons that this widely-condemned project, among all the proposed mining projects in the world, has so many committed opponents, has so few friends, and has lost so much money. 

Some of the project’s flaws can’t be fixed, and some can, but by now we know that none ever will be. 

We know this because what remains of the Pebble Partnership—a mere shell after the departure of mining majors like Mitsubishi Corporation, Anglo American, Rio Tinto, and First Quantum Minerals—consists today of just one small Canadian exploration company called Northern Dynasty Minerals. And this company has demonstrated a penchant for spending money not on “fixing” the project’s flaws but on “fixers”that is, on highly paid DC lobbyists paid to grease the skids of government no matter how bad their client’s project may be.

How bad is the Pebble Mine? Consider just a dozen of its fundamental problems:

  • “Wrong mine, wrong place” – More than any other flaw, it is the project’s location that has been the focus of its condemnation. At the headwaters of the most productive wild salmon fishery on the planet—a fishery that generates 50 to 60 million wild salmon each year, $1.5 billion in revenue, 14 thousand jobs, and 50 percent of the world’s sockeye salmon—the proposed Pebble Mine risks “catastrophic” consequences to the entire Bristol Bay region, according to EPA scientists, if its containment fails—and, short of that, numerous significant adverse impacts even if the mine operates perfectly, which no large mine ever has. It’s a disaster waiting to happen in a natural ecosystem that we can’t afford to lose.​​​​
  • The people who live in the region are overwhelmingly opposed – The opposition will never relent. For the communities of Bristol Bay, this is a fight to save their culture and way of life, their sustainable food supply and economic lifeline, and their children’s future. Local polling conducted by the United Tribes of Bristol Bay found that 80 percent of Bristol Bay residents oppose the mine. A survey released by the Bristol Bay Native Corporation found that 76 percent of its native shareholders strongly oppose the mine—and 85 percent remain very concerned about potential risks posed by the project to Bristol Bay and its salmon runs. For commercial fishermen and business owners in the region, it is a fight to save their livelihood. According to a poll conducted by the Bristol Bay Regional Seafood Development Association, more than 85 percent of commercial fishermen in Bristol Bay oppose the mine. Just last year, the Republican-controlled Alaska Senate published an online state-wide poll of Alaskans on a variety of topics. The results, in a resource-friendly state, were extraordinary: 61 percent of respondents opposed the Pebble Mine, even if “all environmental safeguards are met.”
  • The mine has been condemned by an exceptionally wide and diverse range of local, national, and international voices – The opposition is unprecedented in its demographic and geographic diversityMillions of administrative comments have been submitted by stakeholders from the lower 48 states and around the world in opposition to the Pebble Mine or in support of EPA efforts to restrict it. In 2016, the IUCN’s World Conservation Congress voted virtually unanimously to condemn the project and urge the United States government to deny permitting. Former EPA Administrators from the Nixon, Reagan, George H.W. Bush and George W. Bush administrations, as well as former Interior Secretary in the Clinton Administration, have repeatedly expressed their opposition, calling it “the wrong mine in absolutely the wrong place.” Tiffany & Co., leading the jewelry sector, has spearheaded a “No Pebble Pledge.” Last December, Senator Joe Manchin from the mining state of West Virginia joined the opposition: “There’s no way, shape or form the Pebble Mine should go forward…. Why would we do it?”
  • The mine’s design is preposterous – At the hydrologically rich and seismically active headwaters of the watershed that feeds the incomparable Bristol Bay wild salmon fishery, Pebble proposes to gouge a massive open pit, destroying thousands of acres of wetlands and miles of salmon streams. The project would require three new ports and an 87 mile transportation and infrastructure corridor that includes an 18-mile barge transit of Lake Iliamna year-round (requiring an ice-breaker during winter months), runs within just two miles of the greatest aggregation of brown bears in the world, and ends up at two large-tanker mooring stations in the middle of the tumultuous waters of Cook Inlet. To prevent acid mine drainage, it would require unprecedented levels of water management in perpetuity by an untested system so complex that it would make Rube Goldberg proud. I could go on. In a word, the mine plan is “preposterous” and, if permitted, will likely never be implemented as advertised. 
  • The Pebble Mine is an “abomination” and the environmental review is a “sham” – After chairing a Pebble Mine hearing last September, House Transportation and Infrastructure Chair Peter DeFazio minced no words in condemning both the project and its permit process, which considers the environmental impacts of a mine plan for only one-tenth of the ore body at the site. At the same time, Pebble continues its pitch to potential investors for full development of the entire claim, with the expectation that a “foot in the door” will open up “10 billion tons”—a “multi-generational opportunity,” “perhaps centuries into the future,” without a meaningful environmental review. It’s called segmentation, and it’s illegal.
  • The mine plan proposed for permitting is financially infeasible – Former Rio Tinto environment and permitting director Richard Borden has reviewed the project’s economics and concluded that the proposed ten percent project is “almost certainly not economically feasible,” with an estimated net present value of negative $3 billion—that is, projected costs would exceed projected revenue over the life of the project by billions of dollars. According to Borden:

To make a profit—or even to recoup the necessary financial investment for construction and operation—developers would be compelled to immediately begin the process of expanding the permitted mine plan, leading to an accompanying significant increase in size, waste, disturbed footprintand risk.

In other words, the project makes financial sense only if the mine plan is eventually expanded significantly—at a point when, due to construction on the ten percent project, consideration of the true environmental trade-offs will no longer be possible. Pebble has rejected all requests for an economic feasibility analysis, knowing that potential investors would be underwhelmed.

  • The environmental review is fatally flawed and has been widely criticized, even by agencies of the Trump Administration – The overwhelming consensus of public comment on the Army Corps’ draft environmental impact statement (“EIS”) has been negative. The Department of the Interior, for example, called the draft “so inadequate that it precludes meaningful analysis.” The EPA concluded that “Pebble may have substantial and unacceptable effects” on fisheries in Bristol Bay, and the Fish and Wildlife Service and the National Marine Fisheries Service, too, raised a range of similarly significant issues. According to Alaska’s senior Senator Lisa Murkowski, “the Corps’ DEIS has failed to meet my standard of a robust and rigorous process.” And these are just the tip of the iceberg.
  • The environmental review fails to consider a major containment failure – Even though a containment failure releasing massive amounts of contaminated mine tailings to the surrounding region happens all too frequently (e.g., most recently in Canada, Mexico, and Brazil), Pebble has refused to address a catastrophic containment failure. According to former Rio Tinto mining expert Borden, the largest failure scenario considered in the DEIS was only .004% of the mine tailings—no more than a pipe break. Even with a cover, Borden explained, water will get into the tailings and “a majority or at least a significant minority of the tailings will retain water,” leading to liquefaction and slurry conditions. Borden finds the analysis “clearly inadequate,” failing not only to “definitively demonstrate the geotechnical stability of tailings embankments, water storage facilities and pit walls throughout operation and closure” but unjustifiably failing to analyze “the impacts of any catastrophic release” at all. 
  • Pebble refuses to credibly address harm to the fishery – After three years of twice peer-reviewed scientific study, EPA concluded in 2014 that the proposed mine would result in significant and unacceptable adverse effects” to important fishery areas in the Bristol Bay watershed, that the Pebble Mine would have "significant" impacts on fish populations and streams surrounding the mine site, and that a tailings dam failure would have "catastrophic" effects on the region. Against this scientific record—and contrary to all common sense—Pebble argues that gouging a massive open pit mine into the tundra at the top of Bristol Bay’s watershed will actually improve the world’s most productive wild sockeye salmon fishery (from Pebble’s CEO Collier to BBNC in December 2018—citing “our sophisticated models”—the project will have a “potentially positive impact on fish habitat . . .”; and from Northern Dynasty’s Thiessen at its 2018 Annual General Meeting of shareholders, the value of the Bristol Bay fishery will “actually be enhanced” by development of the Pebble Mine). What?? Thanks, but no thanks. The Bristol Bay fishery doesn’t need that kind of help.
  • Harm from the Pebble Mine will not be credibly mitigated – Within the areas of the project’s permanent impact, nearly 100% of the current ecosystem services provided by “Waters of the United States” would be lost, not to mention the many miles of additional indirect impacts to salmon-bearing rivers and streams caused by permanent river crossings and mining-related changes in flow regime, temperature and water chemistry. To offset these impacts, Pebble’s “compensatory mitigation plan” proposes, in its entirety, just three small mitigation projects: (1) wastewater treatment improvements in three villages on or near Lake Iliamna, (2) upgrading some existing culverts to reduce barriers to fish movement, and (3) cleanup of marine debris along 7.4 miles of Amakdedori Beach. According to Rio Tinto expert Borden, these projects “will almost certainly offset less than ten percent of the Pebble Project’s impacts to Waters of the United States in the Bristol Bay region and may offset significantly less than one percent."
  • Pebble can’t be trusted – Pebble has a history of questionable assurances, so it's sensible to be skeptical. Prominent among its representatives is CEO Collier—the person whose contract entitles him to a $12.5 million bonus if an Army Corps permit can be obtained on schedule. Consider, for example, its pursuit of a permit for, and environmental analysis limited to, development of only ten percent of the ore body, while at the same time pitching full-scale development to potential investors. Or its assurances to the public or to the Army Corps asserting that the mine will have ‘no effect’ at the site, minimizing or failing to mention risk related to complex hydrological connections between surface and subsurface waters in the area of impact, and contending that the project will have a ‘potentially positive impact on fish habitat . . . .’ These assertions contrast sharply with EPA’s findings of “significant and unacceptable adverse effects” to important fishery areas in the Bristol Bay watershed and to more recent comments submitted in response to the Army Corps’ DEIS, including by EPA and the National Marine Fisheries Service.
  • Northern Dynasty Minerals has a long history of failed partnerships and financial decline -- Northern Dynasty is the sole remaining Pebble partner following the departure of Mitsubishi Corporation (2011), Anglo American (2013), Rio Tinto (2014), and First Quantum Minerals (2018), and since 2011 it has itself been looking for an exit. It’s share value has declined over 95 percent since February 2011, and, according to its financial reports, “there is material uncertainty that raises substantial doubt about the Group’s (Pebble and its parent company’s) ability to continue as a going concern.” Its 2019 fourth quarter report shows a loss of $48.48 million since the beginning of the year, and, following repeated stock issuances and special warrants to raise operating cash, the company last year took out a loan of $3.5 million from a group of lenders that included its own CEO and a member of the board. Further stock offerings to raise funds occurred in January and April 2020. At the end of 2019, it had a negative working capital of $0.2 million (compared to a positive working capital of $9.7 million at the end of 2018), and its consolidated deficit was $556 million. According to the report, “[i]f the Company is unable to raise the necessary capital resources to meet obligations as they come due, the Company will at some point have to reduce or curtail its operations.”

While there is considerably more that could be said—a considerably longer list that could readily be compiled—it’s clear that, even after all these years, the proponents of the Pebble Mine have done nothing meaningful to address the fundamental problems that have compelled years of intense opposition, led by the people of Bristol Bay. Northern Dynasty, its leadership, and its captured shareholders haven’t listened, as the Pebble Partnership has disintegrated and their company’s sole asset has become an international pariah, even within the mining industry that over the past decade has abandoned it.

Is this a project and a company to which Americans can feel comfortable entrusting the health and sustainability of our national treasure in Bristol Bay? The answer is no.

After all these years, the Pebble Mine is still crazy, and the opposition will never relent. 

Channels Section of Kvichak River Flowing Between Lake Iliamna and Bristol Bay.

Robert Glenn Ketchum

About the Authors

Joel Reynolds

Western Director, Senior Attorney, Marine Mammals, Oceans Division, Nature Program

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