Northern Dynasty Minerals Ltd (NYSEAMERICAN: NAK) is having a strong start to the trading session this morning, but there have been no press releases or SEC filings that would act as a catalyst for the movement. So, what’s the deal?
The gains seem to be the result of a political push to create a supply chain for clean energy. Here’s what’s going on:
What’s Going On With Northern Dynasty Minerals
For those of you who haven’t been following the company, here’s a quick 1,000 foot overview:
Northern Dynasty Minerals is working toward the development of a mine known as the Pebble Project in the Watershed in Alaska. For some time, the company was blocked by the Environmental Protection Agency from permitting submissions. However, a court order a while back gave the company the ability to submit the applications.
Unfortunately, this didn’t mean the company could immediately move forward. Instead, it had to work with the United States Army Corps of Engineers surrounding an Environmental Impact Statement.
Early on, things looked good. The USACE pointed to economic benefit with little-to-no environmental harm. However, things took a turn for the worst when the USACE released their final EIS, suggesting that the project would be detrimental to the delicate environment in this area.
Since then Northern Dynasty Minerals has appealed the decision and is awaiting a response. While many believed this response would be a negative one, the tides are shifting as investors dive into the politics of the mine.
Clean Energy, Politics, & Northern Dynasty Minerals
We all know that President Biden and the democrats in control in Washington DC have been proponents of clean energy for some time. Many suggest that this fact is evidence that we’ll see positive results out of the Northern Dynasty Minerals appeal.
While Biden hasn’t been the most supportive of mining operations, he did recently promise to create a supply chain surrounding the minerals critical for batteries in electric vehicles as well as other technologies in the clean energy space.
The goal here is to create domestic supply chains, mining these minerals in the United States and keeping the money from these materials in house.
That’s great news for Northern Dynasty Minerals.
While most following the company are hoping to see the world’s biggest mine consisting of gold, silver, and other precious metals come to fruition, there hasn’t been much talk about cobalt, lithium, and tellurium, all of which are not only expected to be uncovered in the Pebble mine, but are overwhelmingly important in the development of clean energy technologies.
Considering Biden’s recent promise to create a domestic supply chain for materials like this, there’s a massive amount of new posts across social media suggesting that the Biden Administration is great for Northern Dynasty Minerals.
At some point, and one that’s sooner rather than later, there will be an update surrounding the final EIS from the USACE, and many suggest that the news will be positive.
If all goes well, the goal to create domestic supply chains for clean energy will weigh into the decision, ultimately tipping the scales in favor of Northern Dynasty Minerals and leading to the approval of the project.
However, it’s important to keep in mind that this is still a very speculative bet. While there is tremendous value locked in the Pebble Project, the company can’t yet access that value, and without Pebble, it has little-to-nothing to bank on.
The Bottom Line
The bottom line here is simple. If you’re following Northern Dynasty Minerals, you’ve watched as an interesting story unfolds. However, the company seems to be the phoenix, rising from the ashes with a positive court decision when the EPA blocked the permitting process.
Now, investors expect that the phoenix will rise again.
Ultimately, the political stage is important to pay attention to when it comes to these types of matters, and with recent news out of the White House and other members of the democrat party, one that’s in control in Washington D.C., the chance that investors’ optimistic hopes will come to fruition seems to be growing.
Sure, this is a very risky play, but it may also prove to be a highly lucrative one should the appeal lead to the final EIS being overturned.