Resources panel's top Dem blasts Ariz. copper project, urges reform of 1872 law

E&E News
By Manuel Quinones
February 26, 2014

The House Natural Resources Committee's top Democrat slammed an Arizona copper mining project yesterday as a prime reason the General Mining Act of 1872 needs to be reformed.

In an interview off the House floor, Oregon Rep. Peter DeFazio called Augusta Resources Corp.'s Rosemont copper and molybdenum project "one of the worst, most creative abuses of the 1872 mining act I've run into."

The law lets companies dig on public land through claims instead of leases. They also don't pay royalties for what they extract.

DeFazio said he toured the Rosemont tract during a recent visit to Arizona. "It's probably worse than I thought," he said.

The U.S. Forest Service released the final environmental impact statement and proposed record of decision on the project in December after years of review (Greenwire, Dec. 13, 2013).

The mine would affect about 1,000 acres of private land in the Santa Rita Mountains and more than 3,600 acres of the Coronado National Forest. Environmental advocates and local groups say it would also affect animal habitats, air quality and water resources.

DeFazio said he's "asking questions" about the EIS, as "local people and advocates would have me believe it's pretty extraordinarily inept."

While the permitting documents detail potential environmental and cultural impacts, Coronado National Forest Supervisor Jim Upchurch says his agency's handling of the project is limited by the mining law.

"My decision to approve the proposal is guided by federal law," said his draft record of decision. "The primary guidance comes from the General Mining Act of 1872, which grants citizens the right to conduct mining activities on public lands that are open to mineral exploration."

The 1872 law has withstood a number of legislative assaults, including one last year from Democratic Reps. Raúl Grijalva of Arizona, Ed Markey of Massachusetts and Rush Holt of New Jersey that would have imposed a 12.5 percent royalty on gross income from non-coal-mining companies (E&ENews PM, June 21, 2013).

With Markey now in the Senate and DeFazio in the Resources ranking member post, the Oregonian is taking a more prominent role in the effort.

"I'm working on a rewrite of mining law reform," DeFazio said. "We need to take on that task again."

President Obama's fiscal 2015 budget proposal -- scheduled to be released Tuesday -- is expected to include mining reform proposals, including a new fee on companies for reclaiming long-abandoned mines.

It has been years since Congress considered mining reform legislation in a serious way. Mining companies and their allies, including Senate Majority Leader Harry Reid (D) of Nevada, say they would support reform measures as long as they're not punitive on industry.

With continued U.S. dependence on imports for a range of minerals, many lawmakers, particularly Republicans, have focused on legislation to ease the permitting process for hardrock mining on public land.

For its part, Augusta Resources is touting recent permitting decisions and expecting a nod from the Army Corps of Engineers on Clean Water Act permits.

The company's board of directors is also trying to ward off a takeover attempt by Toronto-based Hudbay Minerals Inc. This week, they recommended that shareholders reject the offer.

CEO Gil Clausen said the mine could become a "low-cost producer" and the third-largest copper mine in the United States. Amid questions about the company's financial position, Clausen called recent permit decisions "transformational events" in favor of investors and mine development.

Permitting is also moving forward for another controversial project in Arizona, the Resolution Copper mine, backed by global mining giant Rio Tinto PLC.

The company has for years been asking Congress to approve a land swap to aid the project. But House lawmakers postponed voting on legislation last year and have yet to retake the issue.