As expected, the Coronado National Forest has issued a draft Record of Decision approving Augusta Resource Corporation’s controversial Rosemont copper project.
Vancouver, B.C.-based Augusta announced the Forest Service’s action late Thursday in a press release.
While the decision is an important milestone in the project, it does not clear the way for construction of the $1.23 billion, mile-wide, half-mile deep open pit copper mine in the Santa Rita Mountains on the Coronado National Forest southeast of Tucson.
The U.S Environmental Protection Agency, Pima County, the Bureau of Land Management and the Arizona Department of Environmental Quality have raised questions about the project’s impacts on Davidson Canyon and Cienega Creek, and ADEQ must decide if the mine meets state standards protecting those creeks, the Arizona Daily Star reports.
Federal mining laws, in particular, the General Mining Act of 1872, made it a likely outcome that the Forest Service would issue a draft ROD that approves Augusta’s Arizona-based subsidiary Rosemont Copper Company’s mine plan of operations. The draft ROD selects Alternative 4, the Barrel Alternative, which was identified as the Forest Service’s preferred alternative in the Final Environmental Impact Statement.
The Forest Service will publish a notice of availability of the FEIS today in the Federal Register. The FEIS is available on the CNF website.
Rosemont still needs to obtain several permits necessary to begin the project. The most important permit is a Clean Water Act permit that is issued by the U.S. Army Corps of Engineers.
The permit requires Rosemont to provide suitable mitigation for direct and indirect impacts of the proposed mine that is within three miles of the federally-protected Las Cienegas National Conservation Area.
The EPA has repeatedly filed objections to the proposed project with the Army Corps stating the mine will have unacceptable impacts on the environment and that Rosemont has yet to submit a suitable mitigation plan that meets minimum regulatory standards.
The Army Corp and the EPA may also require the permit to be reviewed by the Washington headquarters of both agencies before a final decision on whether to issue the permit is made. The EPA has veto power over the Army Corps permits.
The Forest Service is releasing the draft ROD at a time when Augusta is struggling with serious financial problems. The company is not generating any cash from operations elsewhere and is relying solely on borrowed funds to meet its financial obligations. Augusta recently issued $10 million in convertible bonds to a major shareholder, Ross Beaty, and its chairman, Richard Warke.
Augusta has also announced a preliminary agreement to borrow an additional $26 million from RK Mine Finance Trust. The company has not announced whether that loan has closed. If the loan closes, Augusta will owe the London-based metals hedge fund $109 million. The loan comes due in July with a possible three-month extension.
The Forest intends to publish a legal statement on Dec. 31 that will initiate a 45-day objection period to the FEIS and draft ROD beginning on New Year’s Day.
The objection period will allow individuals, non-governmental organizations, businesses, partnerships, state and local governments and Indian Tribes to file an objection to the proposed project before the final ROD is signed.
Only those entities who submitted timely, written comments on the Draft Environmental Impact Statement will be allowed to participate in the objection process, according to federal regulations.
The CNF will have 45 days to review the objections and has the option to extend the review period an additional 30 days.
Southwestern Regional Forester Cal Joyner will be responsible for the conducting the review. Joyner must respond to all objections in writing before Coronado National Forest Supervisor Jim Upchurch can sign the final ROD.
Once the ROD is signed, there is no additional opportunity for administrative review or administrative appeal of the decision.
The decision, however, can be challenged in U.S. District Court.