Nevada Groups Challenge Molybdenum Mine Over Public Water Rights

Mount Hope in central Nevada (Photo by Lisa J. Wolf)


By Lisa J. Wolf

RENO, Nevada, February 28, 2013 (ENS) – Two Nevada environmental groups have filed legal action contesting U.S. government approval of the Mount Hope molybdenum mine, saying it would remove an entire mountain and replace it with a giant open pit mine.

The Great Basin Resource Watch and the Western Shoshone Defense Project filed a motion for a preliminary injunction against the mine in federal court in Reno on February 20.

This legal action follows their filing of a February 15 complaint challenging the decisions of the U.S. Department of the Interior and Bureau of Land Management in approving the Mount Hope Project in central Nevada, 23 miles north of the town of Eureka.

Mount Hope in central Nevada (Photo by Lisa J. Wolf)
Mount Hope in central Nevada (Photo by Lisa J. Wolf)

“The Project will have immediate, irreparable, and permanent impacts to the local ranching and farming communities and families which have lived there since the 1860s and to the critical environmental, historical, cultural and wildlife resources that will be outright eliminated or significantly degraded by the Project,” the motion states.

The Bureau of Land Management signed the Record of Decision for Eureka Moly LLC’s Mount Hope mine in central Nevada on November 16, 2012.

Eureka Moly is wholly owned by General Moly, a publicly traded company that operates two world-class molybdenum projects in central Nevada. The Mt. Hope project is the company’s flagship project, containing some 1.3 billion pounds of proven and probable molybdenum reserves. It is considered one of the world’s largest and highest grade molybdenum deposits.

With its high melting point, molybdenum is used to make high-grade and construction-grade steel alloys for building, manufacturing, the military and in space exploration.

The company said February 19 that early construction activities are “progressing as planned at the Mt. Hope project site,” including “cultural clearance, clearing and grubbing, wood harvesting, and the development of wells and water pipelines.”

In their legal challenge to the mine, the groups say the Bureau of Land Management has failed to uphold an Executive Order protecting springs and waterholes on public land in the West issued 87 years ago by President Calvin Coolidge in 1926.

The groups object to the federal government’s “failure to protect Federal Reserved Water Rights and Withdrawn Lands, unauthorized disposal of federal property in these waters and lands, and violation of Public Water Reserve No. 107.

PWR 107 states, “[I]t is hereby ordered that every smallest legal subdivision of public land surveys which is vacant, unappropriated, unreserved public land and contains a spring or water hole, and all land within one quarter of a mile of every spring or water hole located on unsurveyed public land, be, and the same is hereby, withdrawn from settlement, location, sale, or entry, and reserved for public use in accordance with the provisions of Section 10 of the Act of December 29, 1916.”

“The ground water withdrawals associated with the Project are predicted to cause many springs and/or waterholes to be eliminated or have substantially reduced flows. The BLM must ensure that these springs and/or waterholes are not impaired by the Project, particularly the dewatering.

The groups contend that “[u]nder this Executive Order and related laws, BLM cannot authorize activities that will impair the public use of any reserved waters and/or lands.”

“BLM’s approval of dewatering, and other activities associated with the Project, which could dry up or materially reduce springs and waterholes protected by PWR 107 is not in compliance with these requirements. BLM cannot dispose of federal property such as PWR 107 reserved water rights without congressional authorization, which authorization has not occurred here,” the groups state in their complaint to the court.

In addition, the groups allege that in approving the mine, the BLM has violated the National Environmental Policy Act and the Federal Land Policy Management Act.

Pony Express Trail
The Pony Express National Historic Trail crosses the Mount Hope Mine site. (Photo courtesy General Moly)

The project’s operator, Eureka Moly LLC, is a wholly-owned subsidiary of General Moly, a U.S.-based molybdenum mineral development, exploration and mining company listed on the New York and Toronto stock exchanges under the symbol GMO.

The project is to be located on both public and private lands in Eureka County, Nevada, and is expected to have a mine life of 80 years. The surface disturbance associated with the proposed activities totals 8,092 acres of public land and 263 acres of private land located within the 22,886-acre
project area.

The groups say an open pit 2,600 feet deep and roughly 1.2 miles in diameter will be created to become a pit lake more than 1,200 feet deep.

“The project will effectively remove Mt. Hope and the surrounding forest. Those 8,318 acres would be replaced with the open pit, waste rock dumps and tailings impoundments, all of which will be permanent aspects of the landscape,” the groups state in douments filed in court.

The company argues that “there are no substantial environmental issues – no threatened and endangered species, wetlands, or sacred Native American sites.”

The waste rock is “non-reactive” and there will be “no pit dewatering discharge,” the company said in a 2010 site presentation. No mercury will be used and the mine will produce, “good quality post-mining pit lake water.” The mining process does not rely on cyanide or other toxic chemicals, the company says.

The groups object that under the National Environmental Policy Act, the public has a right to review and comment on such development projects on public lands before they are approved, but that did not happen in the case of the Mount Hope mine.

“The mitigation ‘treatment plan’ for impacts to historical and cultural resources, as admitted by BLM, was also not analyzed in the draft Environmental Impact Statement or final EIS, nor subject to public review during the NEPA process,” the groups state in their filing.

“It was impossible for the public to review and comment upon this plan, as it has a right to do under NEPA, when it was only produced by the company after the FEIS was completed,” the groups complain.

“NEPA requires that BLM review, and the public have the opportunity to review and comment, on all material aspects of the Project and its impacts before decisions are made and before actions are taken, including before issuance of the FEIS. That has not occurred in this case,” they state.

John Hadder, director of Great Basin Resource Watch, said the State BLM Director had refused to undertake a review of the EIS approval that his group had petitioned for in December.

“The Mt. Hope Mine Project would be one of the largest open pit mines in the nation,” said Hadder. “Mt. Hope and its environs will be obliterated if this project goes forward as planned, and given the inadequate environmental analysis long-term impacts to the land, air, and water could deliver a significant blow to the nearby ranching and farming community.”

“Some are leaving the area and others are wondering if they will have a livelihood in the shadow of this huge mine project,” Hadder said. “It’s time for the public to challenge the Nevada Mining Association’s PR slogan, ‘Mining is Good for Nevada.’ If Nevadans are going to shoulder the brunt of huge mining projects then the least the industry can do is not violate our laws, and the federal and state agencies need to enforce them.”

General Moly External Communications Manager Zach Spenser said, “The actual project underwent an exhaustive environmental analysis and review and that lasted more than six years.”

“The BLM EIS process included extensive public and cooperating agency input” such as “the National Park Service, the EPA, Nevada Department of Wildlife, and the County of Eureka,” Spenser said.

Spenser noted that the Duckwater Shoshone have been supportive “and their tribal elders and spiritual leaders recently conducted a ceremony to bless the ground and the Mt. Hope Project and that was December 7th of 2012.”

“We’re confident that BLM did its job and complied with statutes and rules and believe that BLM’s EIS for the Mt. Hope Project is very well-done and extremely defensible,” he said.

“We’re definitely committed to being both short-term and long-term good neighbors,” said Spenser. “Mount Hope is a multi-generational project with an expected mine-life of over 40 years. We’ll continue to develop the mine in an environmentally and socially-responsible manner.”

The Mt. Hope project is a joint venture between General Moly, which holds 80 percent ownership, and POSCO, one of the world’s largest steel producers, based in South Korea, which holds 20 percent ownership.

Financing for the project is expected to come from China. The company is working with the China Development Bank and the Sichuan Hanlong (Group) Co., Ltd to secure loans for the Mount Hope Project.

General Moly says on its website, “CDB has indicated that it will lend up to $399 million out of the $665 million total and arrange a consortium of Chinese and international banks to fund the balance of $266 million for the construction of the Mt. Hope Project.”

Copyright Environment News Service (ENS) 2013. All rights reserved.

Continue Reading