Hudbay again reduces Rosemont spending
Toronto-based Hudbay Minerals Inc. plans to spend $20 million in 2017 on its proposed Rosemont open-pit copper mine, down from $30 million last year and $50 million in 2015.
“Arizona spending of $20 million on the Rosemont project is intended to support ongoing permitting efforts,” Hudbay reported last week.
The roll-back in investment in Rosemont comes at the same time Hudbay states it may challenge the jurisdiction of the U.S. Army Corps of Engineers to require Hudbay’s subsidiary Rosemont Copper Company to obtain a Clean Water Act permit before construction can begin on the $1.5 billion mine.
Hudbay’s threat to challenge the Army Corps’ permitting authority comes after the agency’s district office recommended last summer that the Section 404 CWA permit be denied. The Corps regional office in San Francisco is expected to make a decision on Hudbay’s permit application later this year.
Neither Hudbay, nor Rosemont’s former owner, Vancouver, B.C.-based Augusta Resource Corp., had previously challenged the Corps’ permitting authority since plans for the Rosemont mine were first announced in 2006.
Hudbay’s sabre-rattling comes two months after it was reported that Rosemont’s lobbyist was working on President Trump’s transition team. David Bernhardt served as the head of Trump’s Interior Department transition team before being removed in an apparent purge of lobbyists from the team, the Arizona Daily Star reported in November.
Bernhardt lobbied for the mining company from 2011 through 2015, among numerous other lobbying contracts, and remains a consultant to Rosemont, the Daily Star reported.
Hudbay stated in November that it plans to release an updated feasibility study on the Rosemont project in the 1st Quarter of 2017. The study will be based, in part, on extensive exploration drilling at the Rosemont site conducted in late 2014 and 2015.
The exploratory drilling came after Hudbay announced that the previous feasibility study prepared by Augusta Resource in 2012 was not done by a “qualified” person.
“A qualified person has not done sufficient work for us to classify Rosemont’s mineral reserves or resources as current mineral reserves or resources,” the Toronto-based company stated in its Annual Information Form for 2014.
The lack of a “qualified person” raises questions over Augusta’s previous feasibility studies that provided resource estimates for the proposed open pit copper mine in the Santa Rita Mountains on the Coronado National Forest southeast of Tucson.
Hudbay reclassified the amount of copper as “historical estimates” rather than as current mineral reserves. Hudbay CEO Alan Hair told investment analysts in a Nov. 3 conference call the company expects to issue a report in early 2017 “outlining the feasibility work completed to date and an updated reserve and resource estimate.”
Hudbay warns it may challenge federal authority requiring Clean Water Act permit for its Rosemont copper mine
Toronto-based Hudbay Minerals Inc. is warning the U.S. Army Corps of Engineers that it may legally challenge the Corps’ authority requiring Hudbay’s Rosemont Copper Company subsidiary to obtain a Clean Water Act permit prior to beginning construction of the proposed Rosemont Mine.
Neither Hudbay, nor Rosemont’s previous owner, have previously challenged the Corps’ jurisdictional authority over the proposed mine.
Hudbay’s salvo comes after the Corps’ Los Angeles district office recommended last July that Rosemont’s application for the permit be denied. The Corps’ South Pacific Division in San Francisco is reviewing the permit application and is expected to make a decision later this year.
Hudbay vice-president Patrick Merrin stated in a Nov. 17 letter to the Corps that the company will likely challenge the Corps’ permitting authority if the federal agency refuses to issue Rosemont’s request for the permit that would allow its mile-wide, half-mile deep open-pit copper mine to dump waste rock and mine tailings on 3,000 acres of the Coronado National Forest.
The waste piles, that would tower up to 900 feet high, would destroy washes, seeps and springs that drain the eastern slope of the Santa Rita Mountains and contribute to the recharge of metropolitan Tucson’s potable ground water supplies. The mountain drainages flow into tributaries of the Santa Cruz River.
“In our view, there is significant uncertainty as to whether the Corps’ has jurisdiction over the onsite drainages,” Merrin wrote in his letter to Colonel D. Peter Helmlinger, commander of the Corps’ South Pacific Division. “In the event of an adverse final decision on our application, we anticipate that jurisdictional arguments will be a key element of our appeal…”
Federal jurisdiction over washes and other Santa Rita Mountain drainages hasn’t been previously questioned since Rosemont Copper first announced its plans to build the $1.5 billion project a decade ago, the Arizona Daily Star reported on Jan. 16.
Hudbay acquired Rosemont Copper in July 2014. Rosemont’s previous owner, Vancouver, B.C.-based Augusta Resource Corp., announced its intention to seek a Clean Water Act permit from the Corps in 2008 and submitted its permit application in 2011, the Daily Star reported.
Col. Helmlinger stated in a Dec. 28 letter to Merrin that the “Corps current analysis of the permit application” is based on documents submitted by Rosemont’s consultant that accepted the Corps’ authority to issue the permit under a regulatory provision called “preliminary jurisdictional determination”.
Col. Helmlinger wrote Merrin that Hudbay may request an “approved” jurisdictional determination at any time, “including before the final permit decision or during an administrative appeal.”
Such a request, Col. Helmlinger wrote, would require another Corps regulatory investigation that could require a supplemental Environmental Impact Statement and “a new” Clean Water Act certification from state environmental authorities.
The Daily Star reported that federal authority over many desert washes in the Tucson area has been clear since 2008, when the U.S. government declared the Santa Cruz River a legally navigable river even though most of it also runs only during storms.
Under the Corps’ and the U.S. Environmental Protection Agency’s interpretation of court rulings, dry washes that are significant tributaries to a navigable river are legally covered by Clean Water Act rules. That means permits are needed for anyone wishing to significantly alter or otherwise impact the washes, the Daily Star reported
The Army Corps warned Rosemont Copper in 2014, while it was owned by Augusta Resource, that its application for the Section 404 Clean Water Act permit fell short of regulatory standards.
The Corps stated in a Feb. 28, 2014 letter that “it is imperative Rosemont focus on restoration/enhancement of WUS (Waters of the United States) to offset the direct loss of 40 acres of WUS,” Col. Kimberly Colloton, Army Corps District Engineer, stated in the letter to former Rosemont President and CEO Rodney Pace.
“Unfortunately,” Colloton stated, “Rosemont has continued to present mitigation plans which provide more acres of upland and riparian preservation, with some enhancement, than acres of actual restoration/ enhancement of WUS.”
Despite the 2014 warning, Rosemont has not made significant changes to its proposed mitigation plan.
Col. Helmlinger’s Dec. 28 letter states that the Corps’ district office determined that Rosemont’s mitigation plan that calls for proposed reestablishment of riparian areas at Sonoita Creek Ranch, which is outside the Rosemont drainage area, and Davidson Canyon falls short of regulatory requirements.
“The permanent loss of 40.4 acres of water would not be mitigated,” Col. Helmlinger wrote to Merrin.
Col. Helmlinger’s Dec. 28 letter also stated that the Corps determined the mining project would “cause or contribute to” violations of Arizona water quality standards and would have adverse effects on cultural resources and traditional cultural properties important to tribes.
The Corps agreed to meet with Hudbay officials sometime in January to discuss technical issues related to the permit.
Army Corps says Rosemont Mine would violate Arizona clean water rules and seriously degrade federal washes
The Daily Star obtained a Dec. 28 letter from the Corps’ regional office in San Francisco to Hudbay that details the rationale behind the district’s recommendation. The Daily Star obtained the letter through a federal Freedom of Information Act request.
The U.S. Army Corps of Engineers Los Angeles district office, which last year recommended denial of Toronto-based Hudbay Minerals’ application for a federal Clean Water Act permit to construct the proposed Rosmont Mine, determined the project would “cause or contribute to” violations of Arizona water quality standards and trigger “significant degradation” of federally regulated washes, the Arizona Daily Star reported on Jan. 14.
The letter states the district office concluded:
- Rosemont Copper’s plan to buy, preserve and environmentally restore more than 4,800 acres to offset its impacts is inadequate.
- Completion of what would be the U.S.’ third-largest copper mine would negatively affect surface water quality, sediment distribution and use of the area by humans and wildlife, including federally protected species.
- Granting the permit would be against the general public interest. To approve a permit, the Corps must find that it would be in the public interest.
Col. Pete Helmlinger, commander of the Corps’ San Francisco-based South Pacific Division, will make the next decision on the $1.5 billion mine. Hudbay is seeking state and federal permits to construct the mile-wide, half-mile deep open-pit mine in the Santa Rita Mountains on the Coronado National Forest 35 miles southeast of Tucson.
Hudbay can appeal a negative decision from Helmlinger to higher-ranking Corps officials.
The U.S. Environmental Protection Agency, which has sent letters to the Army Corps repeatedly opposing the mine, can veto Corps approval of Hudbay’s request for a Section 404 Clean Water Act permit needed to construct the mine.
EPA has determined that the Upper Santa Cruz River groundwater sub-basin, where Rosemont would be located, provides 20 percent of the total groundwater recharge for the state’s water management area covering Tucson and its suburbs, the Daily Star reported.
Helmlinger’s Dec. 28 letter also states that “among the key public interest are adverse effects on cultural resources and traditional cultural properties important to tribes.”
The Tohono O’Odham tribe and others have warned that the mine would seriously damage artifacts and other cultural resources in the Santa Ritas, although the mining company has promised extensive mitigation, the Daily Star reported.
Hudbay sent two letters (Sept. 7, and Nov. 17) to Helmlinger last year requesting additional information concerning the district’s denial recommendation and presenting its reasoning why the permit should be approved.
“We feel strongly that we should have an opportunity to respond to any technical concerns about the Project’s impacts and proposed mitigation prior to a decision on our permit application,” Hudbay vice-president for its Arizona business unit Patrick Merrin stated in the Sept. 7 letter.
The Corps offered Hudbay an opportunity to meet sometime this month to discuss technical issues related to the district’s denial recommendation, according to Helmlinger’s Dec. 28 letter.
Hudbay has stated the company plans to release an updated feasibility study for the Rosemont mine in the first quarter of this year. The company is reportedly preparing a revised mine plan of operations which could impact its application for the Clean Water Act permit.
If Hudbay’s CWA permit application changes, it may be sent back to the Corps’ L.A. office’s district engineer for evaluation and, potentially, for more analysis which could include consulting with other agencies and obtaining additional public comment, Helmlinger’s letter states.