Alaska & Northern Dynasty sue federal government over EPA's Pebble decision; state places hefty price tag on taking if mining ban not overturned.

Both the Alaska Department of Law and Northern Dynasty Minerals Ltd. are suing the federal government over broken contracts relating to the Environmental Protection Agency's decision to restrict mining activities at the world-class Pebble copper project in Southwest Alaska.

"We are filing litigation to fully contest the EPA's unprecedented and unlawful actions against the Pebble project," wrote Northern Dynasty, the mining company that hopes to advance Pebble through permitting and into development. "Since our objections to the politically motivated actions by the EPA have long fallen on deaf ears, we have sued the agency in federal court in Alaska to have our issues fairly and objectively heard."

In January 2023, EPA issued a determination under the Clean Water Act that preemptively restricted mining over roughly 309 square miles of state-owned lands encompassing the world-class Pebble deposit.

At the time, the agency stated that after an extensive review of scientific and technical research spanning two decades, it had decided that certain discharges associated with developing a mine at Pebble would have unacceptable adverse effects on certain salmon fishery areas in the Bristol Bay watershed.

"The Bristol Bay watershed is a vital economic driver, providing jobs, sustenance, and significant ecological and cultural value to the region," said Environmental Protection Agency Administrator Michael Regan. "With this action, EPA is advancing its commitment to help protect this one-of-a-kind ecosystem, safeguard an essential Alaskan industry, and preserve the way of life for more than two dozen Alaska Native villages."

Ban breaks federal-state contracts

Alaska contends that EPA's ban on mining at Pebble breaks a contract between the state and federal government that goes back to a three-way land exchange in 1976.

Under the 1976 Cook Inlet Land Exchange, Alaska swapped 700,000 acres of state land for 525,000 acres of federal land. With its newly acquired land, the U.S. was able to create Lake Clark National Park and Preserve. This land exchange, which also included a land swap for CIRI, Inc., an Alaska Native Claims Settlement Act (ANCSA) corporation, was "the largest land exchange in American history."

The land exchange contract also became a Congressional amendment to ANCSA that guaranteed that the new lands received by the state, which includes the lands where Pebble is now located, "shall include mineral deposits" and the "[m]ineral deposits in such lands shall be subject to lease by the State as the State legislature may direct."

The EPA's determination to restrict mining on these lands breaks that agreement, as well as violates the Statehood Act of 1953, which requires Alaska to sustainably develop its resources to achieve economic independence rather than reliance on the federal government.

"Negotiations between the State of Alaska, the United States government, and regional Alaska Native Corporation CIRI in 1976 resulted in a propitious land exchange that balanced conservation with the opportunity for responsible natural resource development in Bristol Bay," said DNR Commissioner John Boyle. "It is a glaring injustice for the federal government to restrict the State of Alaska from performing our constitutionally-mandated duty to responsibly develop our resources for Alaskans. DNR believes that every proposed natural resource development project deserves to be evaluated through a robust, fair and science-based permitting process."

Environmental Protection Agency

Kaskanak Creek in Bristol Bay's Kvichak watershed seen from the air in 2011. It is a perceived threat to waterways like this one roughly 33 miles (53 kilometers) southwest of the world-class copper deposit that prompted EPA to issue a decision that bars mining in the region.

Seeking ban lifted, or cash

Regrouping to contest EPA's decision, the state sought to issue a special legal action that would see its case heard directly by the Supreme Court, bypassing the typical lower court and appeals process. In January, however, this more direct path to where the case will likely eventually land was denied.

Seeing no other course, the state filed for $700 billion in compensation on Thursday in the U.S. Court of Federal Claims in the District of Columbia.

In its complaint, the state cited this number accounts for a rough estimate of the approximately 100 years of mining that could purportedly be done at Pebble – an asset that Alaska was depending on to aid its economic future.

"No land-use project in recent memory was more important to the state than the Pebble deposit," the complaint read. "It would have generated billions of dollars in revenue for the State and tens of thousands of jobs for Alaskans, many of whom are rural residents with limited economic opportunities."

Northern Dynasty and its subsidiary Pebble Limited Partnership filed their own lawsuits centered around the EPA veto that essentially shut down any possible mining at and around Pebble.

The first, which was filed on Thursday in the U.S. Court of Federal Claims, seeks its own compensation for loss of opportunity to develop Pebble. Unlike the state's case, it does not seek a specific dollar amount, but does mention that Pebble Partnership has invested more than $1 billion to acquire, explore, and advance the world-class copper-gold-silver-molybdenum-rhenium project to the permitting stage.

Northern Dynasty's second legal action, filed Friday in U.S. District Court in Anchorage, seeks to overturn the EPA's January 2023 decision of invoking a rarely used Clean Water Act provision to bar permitting of the Pebble project.

The company says the second lawsuit and overturning the mining ban is its top priority.

"Our priority is to advance the District Federal Court Complaint, because overturning the illegal veto removes a major impediment from the path of getting the permit to build the proposed mine," said Northern Dynasty President and CEO Ron Thiessen. "The filing of the takings complaint puts the U.S. government on notice that we will be seeking very substantial compensation if they continue to illegally block the lawful permitting process. It is basically an insurance policy, ensuring that this case is available to us when, or if, we decide to pursue it further."

"We are confident that the court will vacate the EPA veto and allow permitting of the Pebble project to resume because, as we have previously stated, the veto violated the law and was arbitrary and capricious," the company wrote.

The state, which is not endorsing mining at Pebble but believes the project should be allowed to complete the permitting process, also anticipates filing a separate suit in the U.S. District Court challenging EPA's decision that prevents that permitting process from running its course.