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Legislative and Regulatory Update

February 2006 by Scott

• Senate moves on ESA reform
Legislation to reform the Endangered Species Act (ESA) was introduced in the US Senate.

Senate Bill 2110 (S 2110) shares many similarities with House ESA reform bill HR 3824, which passed the House on September 29, 2005.

Under S 2110 critical habitat would be designated either (1) three years after a recovery program was commissioned or (2) five years after a species was designated endangered or threatened. Under existing law critical habitat must be designated upon listing, an impossible task, says the Fish and Wildlife Service (FWS).

The Interior Department said last year that FWS has orders from 42 lawsuits to designate habitat for 87 species and is involved in another 35 lawsuits affecting 57 species.

• Suit challenges patenting
Denver (AP)—In a closely watched case that could affect similar claims throughout the West, local governments and an environmental group argued before an appellate court that they have a right to challenge the sale of public land to a private mining company.

The town of Crested Butte, Gunnison County and the High Country Citizens Alliance in Colorado are trying to revive their lawsuit claiming the sale of 155 acres on Mount Emmons to the Phelps Dodge Corp. violates federal law. Mt. Emmons Mining, a subsidiary of Phelps Dodge, applied for a patent in 1992, prior to the 1994 patenting moratorium. The patent was eventually granted in April 2004.

The plaintiffs say the Bureau of Land Management shouldn’t have sold the land because Phelps Dodge can’t show that the proposed molybdenum mine would be profitable as required by an 1872 mining law.

Last year, a federal court sided with the BLM and Phelps Dodge, which said the law prevents third parties from challenging mining patents on public land. The court ruled that only people with a competing claim to ownership of the land can sue.

The lawyer representing the environmental group and local governments argued before a three-judge panel of the 10th US Circuit Court of Appeals that a 1946 law allowing judicial review of federal agencies gives his clients the right to object.

“The bottom line is whether the government has met the burden of clear and convincing evidence that the mining law precludes judicial review,” said Roger Flynn, director and managing attorney with the law firm Western Mining Action Project.

Flynn argued that the 1872 mining law, which governs the development of gold, silver and other hard-rock minerals, doesn’t say anything about whether third parties can challenge patents.

After the hearing, Flynn said groups across the West are watching this case because similar protests are pending. He said it doesn’t matter who owns the land because the issues are the same.

Department of Justice lawyer Aaron Avila and David Steefel, the lawyer representing Phelps Dodge, said Congress intended to prevent third-party challenges of mining patents and rulings by the US Supreme Court and other federal courts affirm that. Congress wanted to encourage settlement of the West and mineral development, Avila said, and allowing outside parties to challenge the sales would have undermined that.

Ken Vaughn, a spokesman for Phelps Dodge in Phoenix, said the company is negotiating to transfer the 155-acre patent and other mine lands on Mount Emmons to the previous owners, US Energy Corp. and Crested Corp. He said Phelps Dodge is concentrating on expanding a copper mine in Peru and a new mine in Congo, Africa.

Phelps Dodge operates the Henderson molybdenum mine near Empire and owns the dormant Climax mine in Leadville.

Vaughn said that Mount Emmons has a significant amount of molybdenum, but just didn’t fit in the company’s plans. He said Phelps Dodge believes the patent was properly issued.

• Canyon takes its case to the Supreme Court
Canyon Resources and the State of Montana filed their arguments with the US Supreme Court regarding Montana’s anti-cyanide initiative I-137. The company took their case to the highest federal court after losing in state court.

Canyon Resources was developing its Seven-Up Pete Joint Venture project in Montana when the ballot initiative prohibiting the use of cyanide passed in 1997. Canyon maintains that they are unable to profitably mine gold at the site without cyanide and the company is seeking compensation from Montana as a takings.

The US Supreme Court will decide within the next six months whether to accept the case.

The company estimated the deposit contains 9 million ounces of gold and 20 million ounces of silver.