Northern Dynasty in talks to settle EPA litigation

Shares of Northern Dynasty Minerals (TSX: NDM; NYSE-A: NAK) were still up by about a quarter of their value after announcing a potential settlement on environmental issues to advance its main Pebble project in Alaska. 

The mine developer’s stock was at $2.38 apiece despite wider markets falling on Monday in Toronto, still the company’s highest value in nearly five years. That compared with $1.92 each before the announcement on Friday. The company has a market capitalization of $1.26 billion. 

The company said it’s in talks with the Environmental Protection Agency regarding litigation. It had filed two separate actions in the federal courts in March to challenge the EPA’s role in blocking the proposed Pebble mine. Once built, it would be North America’s largest copper, gold and molybdenum extraction site.

The EPA, in a July 3 filing, confirmed that it is “open to reconsideration” and welcomes further submissions by Northern Dynasty that may be used to reverse its decision. The parties “currently expect to reach agreement within the next two weeks about what that submission would entail,” the EPA stated.

The discussion with the EPA presents “the fastest path forward” to withdraw the Pebble project veto, Northern Dynasty President and CEO Ron Thiessen said in a news release Friday. The agency has “asked for additional information to assist in finalizing that decision,” he said. 

Waste storage

In January 2023, the EPA dealt a blow to the project by prohibiting mine waste storage in the Bristol Bay watershed, site of some of the world’s largest sockeye salmon fisheries. The agency argued that the mine waste could permanently destroy more than 2,000 acres (about 800 hectares) of wetlands protected by the Clean Water Act.

Northern Dynasty claimed the EPA veto contradicted the environmental impact statement published by the United States Army Corps of Engineers in July 2020. Removing the veto would allow the Corps, which has its own approvals process, to revisit its refusal.

A decision to withdraw the EPA veto would help the U.S. to secure a domestic supply of metals such as copper, which is in high demand globally for its use in electrification, and rhenium, a key component in military applications, Thiessen said. The project also holds substantial amounts of gold, molybdenum and silver.

According to a 2023 economic study, the Pebble mine would produce 6.4 billion lb. of copper, 7.4 million oz. of gold, 300 million lb. of molybdenum, 37 million oz. of silver and 200,000 kg of rhenium over 20 years.

In a recent interview with The Northern Miner, Thiessen said that “there’s a good chance that the veto can get removed in the near term, maybe sometime this summer.”