The Environmental Protection Agency (EPA) move is a victory for environmental activists, the fishing industry and indigenous groups who had been fighting the Pebble mine for two decades.
Citing the Clean Water Act, the EPA said it was blocking the project to "help protect Bristol Bay, the most productive wild salmon ecosystem in the world."
"The Bristol Bay watershed is a vital economic driver, providing jobs, sustenance, and significant ecological and cultural value to the region," EPA administrator Michael Regan said in a statement.
Assistant administrator Radhika Fox said the EPA had determined that discharge from the proposed mine would have "unacceptable and adverse effects on certain salmon fishery areas in the Bristol Bay watershed."
Alaska Senator Lisa Murkowski welcomed the move saying "EPA's final determination should mark the end of Pebble."
"To be clear: I oppose Pebble," Murkowski said in a statement. "To be equally clear: I support responsible mining in Alaska, which is a national imperative."
The company behind the Pebble Project, Vancouver-based Northern Dynasty Minerals Ltd, pledged to fight the EPA move.
"Today's action by the EPA to preemptively veto the proposed Pebble Project is unlawful and unprecedented," Pebble Partnership CEO John Shively said. "As such, the next step will likely be to take legal action to fight this injustice."
According to promoters of the Pebble mine, the region holds gold and copper deposits worth hundreds of billions of dollars.
Bristol Bay produces half the wild sockeye salmon in the world and the commercial fishing industry employs some 15,000 people.
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