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Will Alaska owe Northern Dynasty if it Denies Mining Permits?

Having a mining claim does not give Northern Dynasty the "right to mine".
Read below for an explanation.

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The Pebble Mine project is a controversial proposal by Northern Dynasty Minerals to build one of the largest gold and copper mines in the world, in southwest Alaska, near Lake Iliamna. Northern Dynasty has not yet applied for permits, but their current proposal involves both a large open pit and an underground mine, as well as removal of the water from the headwaters of Upper Talarik Creek and the Koktuli River ( important fish habitats). The site sits at the headwaters of two major Bristol Bay drainages ( Nushagak and Kvichak), and potentially poses a large threat to the region's salmon. This proposal has become a major political issue in Alaska, pitting pro-mining forces against local native villages and commercial and sport fishermen.

Is Alaska locked into this project?

No: Once permit applications are filed, the state is free to issue permits, or to deny them. That's the whole point of the permitting process.

In 1999, there was an Alaska Supreme Court case about this very thing: Beluga Mining Co. v. the state of Alaska Department of Natural Resources. Beluga held mining claims, just as Northern Dynasty does, and Beluga wasn't allowed to mine.
According to attorney Jeff Parker (with Trout Unlimited) "The right to mine could not arise until the state issued permits to mine, so they have no right until they get those permits." The Alaska Supreme Court held that there is no right to mine simply because someone has a mining claim, he said. "The court said it is prospective and contingent on state permission to mine. That's the essence of the case."

Rep. Paul Seaton (R-Homer), has said that the state advised him that reclassification of the land use of the area to make mining illegal, or regulatory or legislative action that imposed excessive requirements for necessary permits, could require the state to pay the area claim holder.
There's some debate over what exactly this means. Attorney Jeff Parker says "The memo doesn't address any particular bill. It is not a statement that anything in particularly is or is not a taking,"
Either way, it doesn't force the state to issue permits. But there might be legal questions if Alaska made mining illegal in the area.

Attorney Frances Raskin (who worked on Pebble issues for Trustees of Alaska) has pointed out that even when the company actually owns the land (Pebble is owned by Alaska), the state can deny development rights. In a case in South Carolina, a property owner was denied building rights based on erosion prevention measures the state had put in.
"The government has the ability to regulate their activities even when they own their own land," Raskin said. "They only get a 'taking' (legal opinion of land rights taken away) if the regulations deny the property owner all economically viable use of his land."

For more information, read this article in the Homer News.

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All content by Erin McKittrick, copyright 2006-2007. Contact me with comments or questions at mckittre at gmail dot com.
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Last modified: 2/11/2007