UPDATE 1-U.S. EPA pushes ahead with plan to block Alaska copper mine

Fri Jul 18, 2014 6:00pm EDT

(Adds company response)

By Julie Gordon

July 18 (Reuters) - U.S. environmental regulators laid out proposed protections for Alaska's Bristol Bay watershed on Friday that would effectively block the development of the Pebble deposit, which could be one of the world's largest copper mines.

In a 214-page document posted to its website, the Environmental Protection Agency (EPA) proposed to restrict the use of certain waters in the region for disposal of dredged or fill material associated with mining the Pebble deposit.

It is the latest step by the agency to use a rare process under the Clean Water Act to try to stop work on the proposed copper-gold mine, which they say would threaten the region's valuable salmon fisheries.

"The science is clear that mining the Pebble deposit would cause irreversible damage to one of the world's last intact salmon ecosystems," said Dennis McLerran, regional administrator for the EPA, in a statement. "Bristol Bay's exceptional fisheries deserve exceptional protection."

Project owner Northern Dynasty Minerals Ltd, meanwhile, has sued the EPA for trying to derail development before the company has even applied for its permit or environmental assessment.

The miner called on the agency to refrain from imposing pre-emptive conditions and to allow the project to be reviewed by federal and state authorities, including the EPA, as part of normal environmental review for major developments.

It also pledged to work with the EPA and other agencies to ensure that the mine would be built in a safe manner.

"We continue to believe the project must be developed in a way that protects clean water, healthy fish and wildlife populations, and the Alaska Native communities that rely on them," it said in a statement.

Pebble is one of the richest undeveloped copper deposits in the world. Northern Dynasty has said the project could employ thousands and filter hundreds of millions in tax dollars to federal, state and local governments each year.

But opponents say environmental risks outweigh the benefits, citing potential widespread damage if polluted water were to enter streams in the region.

The EPA's proposal would make it difficult to build and operate the project by restricting the discharge of dredged or fill material related to mining that would result in the loss of streams, wetlands, lakes and ponds, or alter the flow of streams where salmon have been documented.

The agency said proposed restrictions affect only mining claims surrounding the Pebble deposits and not other projects in Alaska or other states.

But some Republicans oppose the EPA's action, saying it would set a dangerous precedence that could be used to stop economic development across the United States.

Northern Dynasty's shares were down 6.6 percent at 85 Canadian cents on Friday on the Toronto Stock Exchange. The stock has fallen more than 60 percent in the last 12 months, hurt by a series of setbacks including the loss of its joint venture partner Anglo American and by the EPA action. (Reporting by Julie Gordon in Vancouver; Editing by Nick Zieminski and Ken Wills)