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Grijalva urges Corps of Engineers to review Rosemont Copper's permits

Grijalva urges Corps of Engineers to review Rosemont Copper's permits

Feds 'cannot remain on the sidelines' as Hudbay alters washes on private land, S Az Democrat says

U.S. Rep. Raúl Grijalva pushed the Army Corps of Engineers to take immediate action against Rosemont Copper, telling federal officials they "cannot remain on the sidelines any longer," and must review the company's efforts to "hastily" grade and fill dry washes on a chunk of private land along the western reaches of the Santa Rita Mountains.

In a May 24 letter to Michael Connor, assistant secretary of the Army, Grijalva referred to "alarming reports of unlawful actions" by Hudbay, the Toronto mining company that owns the Rosemont mine. Grijalva told Connor and two other members of the Army's civil works agency that Hudbay had "initiated groundbreaking activities" for a "vastly expanded" mine, even while the Corps of Engineers suspended the company's permit under the Clean Water Act pending "further review and analysis." 

Grijalva sent his letter as the chair of the House Committee on Natural Resources, which oversees public lands, conservation and species protection programs, and has oversight over the mining industry.

Long a sharp critic of the Rosemont mine, Grijalva also rejected a recent maneuver by Hudbay to abandon the Clean Water Act permit in an attempt to render "moot" two lawsuits filed by environmental groups and three Native American tribes. While a federal judge agreed with the company—just as Grijalva issued his letter—the congressman told federal officials that "Hudbay cannot evade that review by surrendering the Section 404 Permit for now—a gambit the Corps rightly rejected." 

For the last 15 years, Rosemont has attempted to establish an open-pit mine affecting more than 3,600 acres of land in the Coronado National Forest. However, its efforts have been stymied by a fierce response from environmental groups who have argued the mine—which ultimately could include a mile-wide, half-mile-deep pit across 2,500 acres—would seriously harm the Santa Rita Mountains, and destroy prime habitat for jaguars.

Blocked along the eastern wilderness of the Santa Rita Mountains, the company has now shifted its operations to the western slopes, establishing what it dubbed "Copper World" on a chunk of private land once known as the Helvetia Mining District. Rosemont/Hudbay told Pima County officials in March they would ramp up grading and clearing and "other earthwork activities" on the 3,500-acre site just southeast of Sahuarita, and the site would be used "in connection" with future mining and metallurgical operations.

As part of this effort, Rosemont Copper relied on a Section 404 permit, granted under the Clean Water Act by the U.S. Army Corps of Engineers. However, environmental groups and three Arizona tribes, filed two separate lawsuits, arguing the company was violating the terms of the permit by "filling, grading, and destroying" the area's network of ephemeral streams—dry river washes that will flood during monsoon rains—at Copper World.

In response, Hudbay decided to abandon its permit granted under the Clean Water Act, arguing the change made the two challenges moot. This maneuver was enough for U.S. District Judge James A. Soto, who agreed with Hudbay, ruling the two lawsuits "must be dismissed for lack of jurisdiction" because the Canadian mining company "surrendered the permit, avowed that it will not use it, and does not request that it be reissued."

Grijalva argued in his letter Rosemont was using bulldozers to fill the network of ephemeral streams on the site, "impermissibly cutting off upstream waters of the United States protected by the Section 404 permit." And, he referred to images captured via drone flown by the Center for Biological Diversity, which were presented to Soto as part of the environmental group's lawsuit.

"This unpermitted environmental degradation is causing irreparable damage to jurisdictional waters protected by the Clean Water Act while also degrading a traditional cultural landscape of deep significance to the Tohono O’odham Nation, Pascua Yaqui Tribe, and Hopi Tribe, among other indigenous communities," Grijalva wrote.

"The Corps cannot remain on the sidelines any longer," Grijalva wrote, adding federal officials have "extensive information regarding Hudbay’s expanded mining operations, including the fact that the company proposes to develop the Copper World area in conjunction with the Rosemont mine." And, he added the Corps of Engineers has "extensive evidence" Hudbay’s operations are "causing irreparable harm to jurisdictional waters of the United States, cultural properties, and wildlife habitat."

"The Corps must analyze this information and consult with Native American tribes to ensure that any decision regarding the suspended Section 404 Permit avoids or minimizes impacts," he said.

"Pending that essential—indeed mandatory—review and consultation," Grijalva said, the Army Corps should "consider taking immediate action to cease Hudbay’s destruction of waters of the United States and traditional cultural properties."

"The company agreed that there are waters of the United States flowing across the Copper World area; it cannot cut off those jurisdictional waters by hastily grading and filling downstream reaches," he said. "Nor can it degrade traditional cultural properties that it previously promised to avoid."

Hudbay: 'Copper World' mine could be worth $1.3 billion

While Grijalva pushed for additional reviews, Hudbay told investors it could begin mining for copper on its private land by 2023.

On Wednesday, Hudbay released an assessment of the Copper World complex, telling investors the "two-phase mine plan" would be worth almost $1.3 billion and generate an 18 percent rate of return based on the price for copper around $3.50 per pound.

Hudbay said began evaluating "alternative" options for the Rosemont mine after Judge Soto agreed with environmental groups in separate lawsuit, ruling in 2019 the U.S. Forest Service "improperly evaluated and misapplied" federal law, leading to "an inherently flawed" approval of the open-pit copper mine. Hudbay appealed, but on May 12, the 9th Circuit Court of Appeals upheld Soto's halt in a 2-1 decision.

Following Soto's decision, Hudbay began "exploring nearby patented mining claims" in the historic Helvetia mining district. The following year, the company drilled and found four deposits on the private land. "An initial mineral resource estimate was declared at the Copper World deposits in December 2021, which was larger and at a higher level of geological confidence than expected," the company said.

Hudbay said it "does not believe any federal permits are required for Phase I of the mine plan for the Copper World Complex." Instead, the company has sought state-level permits, which were approved by the Arizona State Mine Inspector in October 2021. "An aquifer protection permit and air quality permit are the remaining key state-level permits required for a private land operation, which, along with other minor permits, are expected to be advanced in the second half of 2022," Hudbay said, adding it has "previously received aquifer protection and air quality permits for the 2017 design of the Rosemont project and these permits have been successfully upheld through litigation."

Copper World is "significantly de-risked and has the potential to nearly double our annual copper production while maintaining Hudbay’s first quartile cash cost positioning," said Hudbay CEO Peter Kukielski.

Hudbay said it expects to have all its permits by 2023.

The company plans to operate two pits, all part of what the company called a  "traditional open pit shovel and truck operation" on the Helvetia site.This will include a copper sulfide mineral processing plant and an oxide leach processing facility producing copper cathode, molybdenum concentrate and silver.

The mine could churn out 100,000 tons of copper a year for the next 16 years, including around 86,000 tons of copper.

The global copper industry needs to spend more than $100 billion to build mines able to close what could be an annual supply deficit of 4.7 million tonnes by 2030, Erik Heimlich, head of base metals supply at CRU said this week.

Hudbay expects to operate Phase 1 for up to 16 years, scooping around 86,000 tons of copper from the mine. The company also said it expects Phase II, which will occupy federal land, to extend the mine another 44 years, extracting 101,000 tons of copper. The company expects to earn nearly $1.3 billion from the two operations, though it warned this is "highly sensitive" to the price of copper, and the company's earnings could range from nearly $1.2 billion to more than $1.9 billion.

However, copper demand will likely increase as energy companies shift toward "green" technologies and demand for electric vehicles rises. During the CRU World Copper Conference hosted in Chile, an analyst for the copper industry said the global copper industry needs to spend more than $100 billion to build mines to close what could be an annual deficit of 4.7 million tons of copper by 2030, reported, a trade magazine and website.

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