Hudbay files appeal over construction halt of Rosemont Project

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Hudbay Minerals Inc. [HBM-TSX, NYSE] has filed an initial brief with the U.S. Court of Appeals for the Ninth Circuit in relation to the U.S. District Court for the District of Arizona’s decision in July, 2019, which revoked the U.S. Forest Service’s issuance of the final record of decision (FROD) for the Rosemont project in Arizona.

The FROD was issued in June, 2017, after a thorough process involving 17 co-operating agencies at various levels of government. The filing of the Hudbay brief follows the U.S. federal government’s initial brief, which was filed last week. The briefs explain how both Hudbay and the government believe that the district court misinterpreted federal mining laws and Forest Service regulations as they apply to Rosemont.

“Today’s filing represents the next milestone in our efforts to correct what we believe is a misinterpretation by the district court of the current laws and regulations that govern mining operations on public lands,” said Peter Kukielski, President and CEO. “We believe, based on the arguments filed by Hudbay and the government, that the appellate court will reverse the district court’s decision, allowing us to move forward with constructing and operating the Rosemont project.”

Both briefs assert that current law broadly authorizes mining-related activities, such as ore processing and tailings storage, to be conducted on open Forest Service lands. The district court’s determination that the Forest Service’s mining regulations do not apply to mining activities unless those activities are conducted entirely on valid mining claims is contrary to plain language readings of the general mining law, as well as Forest Service regulations, which explicitly allow for mining-related activity to occur on lands not covered by any mining claim.

“All functions, work and activities in connection with prospecting, exploration, development, mining or processing of mineral resources […] (are authorized) regardless of whether said operations take place on or off mining claims.” — 36 Code of Federal Regulations, paragraphs 228.1 and 228.3.

The Hudbay brief states: “Prior to the district court’s decision, no court had ever held that a mining plan of operations may only be approved if all mining and mining-related operations will occur exclusively on valid mining claims. The district court imposed this novel requirement on the Forest Service after misreading both the relevant statutes, which provide a broad grant of free and open access to federal lands for mining and mining-related operations, and the relevant regulations, which authorize the Forest Service to approve those operations on or off of mining claims.”

Similarly, the government brief states: “The district court’s decision […] rested on a fundamental misinterpretation of the Mining Law and the regulatory scheme applicable to the (U.S. Forest) Service’s review of mining plans. That decision should be reversed.”

“We believe that the brief filed today thoroughly demonstrates that the district court misinterpreted federal mining laws and ignored more than 150 years of precedent,” said Andre Lauzon, vice-president of Hudbay’s Arizona business unit. “The brief also points out that this decision, if not reversed, will disrupt the long-standing policy of the U.S. federal government to promote mining on public lands, including within national forests.”

Hudbay anticipates a final decision in the appeal process in late 2021.

Once in production, Hudbay’s 100%-owned the Rosemont mine 50 km south of Tucson is expected to be one of the largest copper mines in the United States, stimulating billions in new economic activity, and creating thousands of new direct and indirect, high-paying jobs.


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