Hudbay appeals court decision on Rosemont

Image courtesy of Rosemont Copper.

Hudbay Minerals (TSX, NYSE: HBM) has filed its initial brief with the US Court of Appeals regarding the decision made by the US District Court for the District of Arizona almost a year ago to deny the company from proceeding with construction at its Rosemont project.

In July 2019, the District Court revoked the US Forest Service’s issuance of the final record of decision for Rosemont, which is expected to become one of the largest copper mines in the country if completed.

The record of decision was issued in June 2017 after a thorough process involving 17 co-operating agencies at various levels of government.

In July 2019, the District Court revoked the US Forest Service’s issuance of the final record of decision for Rosemont, which is expected to become one of the largest copper mines in the country if completed

Hudbay’s filing on Monday follows the initial brief filed by the US federal government last week. Both briefs outline how both Hudbay and the government believe that the District Court misinterpreted federal mining laws and Forest Service regulations as they apply to Rosemont.

“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,” Hudbay president and CEO Peter Kukielski said in a media release.

The 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 §§ 228.1, 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.”

The federal government brief states:

“The district court’s decision … rested on a fundamental misinterpretation of the Mining Law and the regulatory scheme applicable to the (US 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,” Andre Lauzon, vice president of Hudbay’s Arizona business unit said.

“The brief also points out that this decision, if not reversed, will disrupt the longstanding policy of the US federal government to promote mining on public lands, including within national forests,” he added.

The company is anticipating a final decision in the appeal process in late 2021.

Shares of Hudbay Minerals closed 2.3% higher on Monday. The Toronto-based miner has a market capitalization of just over C$1 billion.

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