Twin Metals files federal suit to keep leases

​Twin Metals Minnesota on Monday filed a lawsuit in federal district court in Minnesota challenging a federal agency opinion that the company's federal mineral exploration leases for land near Ely can be revoked.

The lawsuit seeks to overturn the April 2016 opinion by the U.S. Department of the Interior instructing the Bureau of Land Management that it has the discretion to deny renewal of Twin Metals' federal mineral leases for the company's proposed underground copper-nickel mine near the Kawishiwi River.

Environmental groups and mining critics had praised the possibility that the leases could be revoked, saying the mere presence of a massive mining operation in the same watershed as the Boundary Waters Canoe Area Wilderness threatened the region's freshwater ecosystem.

In June, U.S. Forest Service officials said they were "deeply concerned" about potential impacts of the proposed Twin Metals copper mine on the edge of the BWCAW. The federal mineral leases are concentrated near Birch Lake, north and south of Minnesota Highway 1.

The Forest Service is expected to release a decision later this year on whether to oppose or support renewing the permits after already signaling that the agency has problems with the potential of copper mining runoff in the BWCAW, part of the Superior National Forest. That opinion is expected to seal the fate of the leases.

But Twin Metals, a wholly owned subsidiary of Chilean mining giant Antofagasta, decided not to wait for that opinion.

The 26-page lawsuit challenges the Interior Department opinion as being inconsistent with federal law as well as inconsistent with the terms of Twin Metals' leases and with the federal government's established precedent in supporting and renewing the leases during the past five decades.

Company officials have called the federal leases and access to that specific land "the foundation of our project" and that the mine likely could not proceed without them.

"If not overturned, the Solicitor's unlawful opinion would eviscerate Twin Metals' long-standing federal mineral rights in northeast Minnesota, deprive Minnesota of hundreds of jobs and billions of dollars in environmentally responsible economic growth and prevent access to one of the world's largest sources of copper, nickel and platinum, which are of strategic importance to the U.S. economy and national defense," the company said Monday in announcing the lawsuit.

Mining companies pay a small fee for exclusive rights to prospect on the federal lands and then would pay a fee for any ore that's actually mined.

The leases were first issued 50 years ago to predecessor companies and have been purchased by Twin Metals in the years since as the company hones in on the most lucrative spot to dig.

The leases are under the control of the federal Bureau of Land Management, which has formally asked the Forest Service to give its consent — in effect to recommend whether renewing the leases is good for the Superior National Forest where they are located.

"The government's actions have cast a cloud of uncertainty over Twin Metals' mineral rights. The Solicitor's opinion makes it impossible for Twin Metals to engage in any long-term planning, investment, development and operational decisions, effectively thwarting any development of the mineral estate; materially harming the future mining project; and jeopardizing Twin Metals' $400 million investment to date in acquisition, exploration, technical and other activities to develop these minerals,'' Twin Metals said in summarizing its lawsuit.

Critics of the mining project disagreed with Twin Metals' interpretation of federal law.

"It is a longstanding fact that renewals of the Twin Metals federal mining leases are discretionary," said Becky Rom, national chairperson of the Campaign to Save the Boundary Waters. "The Bureau of Land Management's authority to renew or deny renewal based on science and proximity to the Boundary Waters Canoe Area Wilderness is absolutely clear. Scientific evidence shows that a sulfide-ore copper mine next to the Boundary Waters creates an unacceptable risk of harm to our priceless wilderness. Federal mining leases that pose significant risks to the Boundary Waters should be denied."

The lawsuit is against the United States, the Department of the Interior, the Bureau of Land Management, Interior Secretary Sally Jewell and Solicitor of the Interior Hilary Tompkins.

The Forest Service concerns aired in June were by far the strongest statement yet by a regulatory agency on the proposed project.

"... the Forest Service is deeply concerned by the location of the leases within the same watershed as the BWCAW, and by the inherent risks associated with potential copper, nickel and other sulfide mining operations within that watershed. Those risks exist during all phases of mine development, implementation and long-term closure and remediation. Potential impacts to water resources include changes in water quantity and quality, contamination from acid mine drainage, and seepage of tailings water, tailings basin failures and waste rock treatment locations," the agency noted. "Based on these concerns, the Forest Service is considering withholding consent for lease renewal."

Minnesota Gov. Mark Dayton, who also has been critical of Twin Metals' proximity to the BWCAW, has refused to allow Twin Metals to prospect on state land in the area.

Supporters say the Twin Metals mine would be a huge boost to the region's economy. The company has said it may be ready to submit the project for environmental review by 2018, if it is able to renew the leases.

In 2014, Twin Metals released the results of a "pre-feasibility" study on the mine saying the project has substantial mineral reserves, would have a low cost of production and could turn a solid profit. The report said the proposed mine would take about three years to build at a cost of $2.8 billion — by far the state's most expensive private construction project ever — and eventually would employ about 850 people mining about 50,000 tons per day, a far larger operation than the proposed PolyMet open-pit mine about 20 miles to the southwest.

The Twin Metals mine is predicted to produce valuable minerals for at least 30 years — including an estimated 5.8 billion pounds of copper and 1.2 billion pounds of nickel along with platinum, palladium, gold and silver.