Alaska mine developer Northern Dynasty wins U.S. EPA reprieve, shares soar

TORONTO (Reuters) - The Trump administration said on Tuesday it would lift an Obama-era restriction on the world’s biggest undeveloped gold and copper resource owned by Northern Dynasty Minerals Ltd, sending the Canadian company’s shares soaring.

Under former U.S. President Barack Obama, the U.S. Environmental Protection Agency in 2014 proposed limits on large-scale mining in Alaska’s Bristol Bay watershed, citing environmental concerns. Under President Donald Trump, the EPA has dismantled scores of environmental rules and Trump rejects mainstream climate science.

Northern Dynasty’s site is near Lake Iliamna in southwestern Alaska between the headwaters of two rivers that drain into Bristol Bay, and is known for its huge salmon runs, wilderness and abundant brown bears.

The pebble mine is expected to produce 70 million tons of gold, molybdenum and copper ore per year and create a pit 1,970 feet (600 meters) deep.

The proposed restrictions were based on hypothetical scenarios that were different from Northern Dynasty’s submitted permit application, the EPA said in a statement, adding the company will still need to go through the permit application process.

Shares of Vancouver-based Northern Dynasty surged to close up 67% at C$1.20, their highest level since March.

“Finally, this Administration has reversed the outrageous federal government overreach inflicted on the State of Alaska by the Obama Administration,” Tom Collier, chief executive of Pebble Partnership, owned by Northern Dynasty, said in a statement.

Development of the mine, near one of the world’s biggest sockeye salmon fisheries, has been fiercely opposed by environmentalists, native groups and fishermen for years.

“The EPA’s arbitrary withdrawal of these protections for Bristol Bay... is just another example of the Trump Administration working hand in hand with Pebble’s lobbyists,” Alannah Hurley, executive director of the United Tribes of Bristol Bay, which represents 15 area tribal governments, said in an emailed statement.

The shift paves “the way for this toxic project to destroy the world’s last great sockeye salmon fishery for the profit of a foreign mining company,” she added.

There were already signs the restrictions could be eased in February, when the U.S. Army Corps of Engineers released a draft environmental impact statement pointing out the economic benefits from the project, and noted the mine plan incorporated ways of mitigating the environmental impact.

Reporting by Nichola Saminather; editing by Bill Berkrot and Grant McCool