Mt. Hope Molybdenum Mine Challenged in Federal Court

by Brian Bahouth

The entrance to the proposed Mount Hope molybdenum mine - image - Great Basin Resource Watch

Great Basin Resource Watch and the Western Shoshone Defense Project filed a lawsuit in federal district court in Reno Thursday challenging the decisions of the United States Department of the Interior and its Bureau of Land Management to approve the Mount Hope molybdenum mine project.

The Mount Hope project is in central Nevada about 25 miles northwest of Eureka on U.S. Highway 278. The proposed plan includes deep groundwater pumping to facilitate a mile-wide open pit some 1,000 feet deep. There will be a power transmission line to the facility, a water well field, and associated mine-processing facilities.

The General Moly mining corporation website bills the Mt. Hope mine as “one of the largest and highest grade primary molybdenum deposits in the world.” General Moly  operates the Liberty molybdenum mine in central Nevada, and according to the company website, approval of the Mt. Hope mine would enable them to become “the largest pure play primary molybdenum producer in the world.”

State  documents project the mine will employ an average of roughly 400 people with a peak employment of 615 during construction. The project is on 8,092 acres of public land and 263 acres of private land. The mine has cleared all state regulatory hurdles.

A 3D rendering of Mount Hope, Nevada – source image – USGS Earth Explorer – 3D image – Nevada Capital News

In 2008, General Moly and the South Korea-based giant POSCO formed a joint venture to develop Mt. Hope, Eureka Moly, LLC. General Moly is a US corporation based in Denver with an office in Elko. POSCO is an international multi-product corporation based in South Korea. General Moly owns 80 percent of the Mt. Hope project. POSCO owns the remaining 20 percent stake.

Following the formation of Eureka Moly, LLC the company worked to gain approval to mine the Mt. Hope site from the US Bureau of Land Management. After completing the filing requirements of the National Environmental Policy Act or NEPA, in 2012, the BLM issued a Record of Decision (ROD) that authorized the Mt. Hope project.

Great Basin Resource Watch and others appealed the decision to the US District Court of Nevada. The District Court upheld the project approval, so the mining watchdog groups appealed the BLM’s finding to the United States Court of Appeals for the Ninth Circuit. In 2017, the Ninth Circuit reversed the BLM’s findings based on a deficiency in an air quality analysis related to oil and gas leases on the site.

Since then, General Moly has worked with the BLM to complete a Supplemental Environmental Impact Statement to address the concerns raised in the Ninth Circuit’s opinion. A new Record of Decision was issued on September 27 of this year to include a supplemental EIS, but Great Basin Resource Watch and the Western Shoshone Defense Project still have several problems with the project.

“The court also directed the BLM to address the public water reserve issue of publicly protected waters,” John Hadder, executive director of the Great Basin Resource Watch said by phone.” The BLM did evaluate the springs that were in our original lawsuit, however, they’re claiming that they don’t fall under the public water reserve law and they’re exempted under what’s called the Pickett Act, which is a long legal argument, but basically, we disagree.”

When the federal government sets aside land for use as a military base or Indian reservation, national park, forest or monument, officials also reserve sufficient water to satisfy the purposes for which the reserve was created. This is known as federal reserved water rights. The Pickett Act of 1910, among numerous provisions, enables the president of the United States to withdraw public lands for uses as described in the order to withdraw them. That would mean the groundwater and associated springs around the mine would not be subject to the public water reserve law and could be pumped dry.

The Mt. Hope mine would pump groundwater at a rate of up to 11,300 acre-feet per year, which translates to 3.68 billion gallons per annum.  With the predicted pumping to last roughly 43 years, this means that, in total, up to 158 billion gallons of water will be eliminated from the Mt. Hope area through dewatering.

“They (the springs) do qualify (for the public water reserve law) and that the mine plan would have to be modified to protect those public water reserves,” Hadder said. “Those springs are protected, not only in the amount of water flow, but also in their location, because there has to be public access to these springs.”

A local rancher opposes the mine as planned. Carolyn Bailey is a resident of nearby Diamond Valley.

“The Bailey Family has been ranching and farming in Diamond Valley since 1863,” Bailey said. “Our ranch and farms are located close enough to the Mt. Hope mine site to be adversely affected by mine caused impairment of air and water, increased truck traffic, and the very real damage to our environment from the massive pumping and resulting further drawdown of the groundwater. The costs will be irretrievable and irreparable and will be paid by our family and community.”

Pat Rogers is vice president for permitting and environmental compliance for General Moly. In an email, Rogers declined an interview request and wrote that he and the company are not comfortable discussing ongoing litigation. Rogers did express disappointment in the lawsuit.

“I’m disappointed that the BLM decision is being appealed,” Rogers wrote. “The BLM did a thorough and careful analysis of the issues to prepare the SEIS as mandated by the 9th Circuit Court.”

The Rosemont Mine

This summer, a court challenge from several environmental groups and tribes halted the proposed Rosemont copper mine in the Santa Rita Mountains near Tucson. On July 31 of this year, U.S. District Judge James Soto halted the project. Several legal observers have referred to the ruling as a blockbuster decision that could be the first step in reforming the 1872 Mining Law. Congress has repeatedly failed to change the law that governs mining in the Untied States, a law written when mules, shovels, and picks were primary mining tools.

Attorneys James Allen and Michael Ford wrote in the Snell and Wilmer law offices blog about the Rosemont decision. “The district court’s order is likely the most significant federal court decision on federal mining law in several decades and touches on issues that have simmered since the Clinton  Administration.”

According to Judge Soto’s decision, a mining company can only store waste rock on land proven to contain a valuable mineral resource, which, according to the ruling, it failed to do. Hadder is encouraged by the Rosemont decision and said the precedent stetting case in Arizona will be relevant in the Mt. Hope mine deliberations.

The Mt. Hope mine would generate nearly 2 billion tons of waste rock over its 32-year life. Some 1 billion tons of tailings will be produced over 44 years of ore processing. Waste rock may well encircle the open pit at a height of 750 feet to 950 feet. John Hadder said the Mt. Hope mine is similar to the Rosemont mine in that the waste rock will spread beyond the footprint of a proven and valuable mineral resource.

“We believe the same situation is here at Mt. Hope as well. That was a significant ruling and it’s also in the same circuit as ours,” Hadder said.

The Mt. Hope mine would leave behind an open pit that could be more than a mile across. The hole is expected to fill with groundwater once dewatering and mining operations have stopped. Based on water quality conditions in existing mining pit lakes, the groundwater quality in the thousand foot deep lake has the potential to not meet state or federal water quality standards. The pit will be fenced off forever.

Akin to the Rosemont mine, Hadder said the Mt. Hope project area contains important cultural assets.

“I toured (the Mt. Hope mine site) with the Western Shoshone a number of years ago and they identified a number of cultural aspects including pinion pines, which they are there many mature stands of pinion pines in the area, which are part of the cultural practice of harvesting annually. So that was definitely one concern that I heard from the Shoshone folks as well as just the in terms of cultural values of springs and the area that should not be affected by ground water pumping.”

A court date has yet to be set. What’s next?

“We will first argue in Reno District Court, which we did last time, and we may need to appeal it to the Ninth Circuit, as we did last time, and if the Ninth Circuit agrees with arguments, then they’ll again vacate the record of decision and the EIS, and the mining company and the BLM will have to go back to the drawing board again.

“If the courts agree with our arguments around the public water reserves, it may require that the mining company do a major redesign of their mine plan, which will definitely set them back quite a bit. The other issues that we’ve raised could also delay the project significantly, if not indefinitely,” Hadder said.