Augusta Resource Corporation’s Chief Executive Officer Gil Clausen on Monday said that Augusta expects to receive the U.S. Army Corps of Engineers Section 404 Clean Water Act permit for its Rosemont copper mine in the second quarter, despite the longstanding criticism of the Rosemont project by the U.S. Environmental Protection Agency, which has veto authority over Corps permits.
Clausen comments came during a conference call with investors and analysts to discuss the Augusta board of director’s decision on Monday to reject an unsolicited $540 million takeover offer from Toronto-based HudBay Mineral Resources.
Clausen, during the conference call, said Augusta expects to see a “draft” 404 permit in late March.
It is unknown what environmental mitigation plans would be included in the “draft” permit, but based on previous correspondence between the EPA and Army Corps, Augusta has not provided the necessary mitigation for the Rosemont project to receive the 404 permit.
The EPA’s Region IX office concluded in a Nov. 7 letter to the Army Corps that Augusta failed to provide a “compensatory mitigation plan compliant with the regulations” and what has been provided is “grossly inadequate to compensate for mine impacts.” The EPA recommended that the “project not be permitted as proposed.”
There is no indication from publicly available records that Augusta has made any significant changes to its proposed mitigation plan under review by the Army Corps since EPA’s critical assessment last November, despite Clausen’s assurance that a draft permit will be released next month.
Augusta stated in a “Directors’ Circular” filed with Canadian regulators on Monday that “negotiations with the Army Corps are presently underway to finalize mitigation for the 404 permitting process.” The circular provided no details on Augusta’s mitigation proposal.
On Monday’s call, Clausen said the Army Corps has been analyzing Augusta’s various mitigation plans to compensate for the direct and indirect impacts the Rosemont mine would have on waters of the United States. Clausen said the mine will directly impact about 40 acres of U.S. jurisdictional waters and indirectly impact 28 acres.
“Rosemont is required therefore to secure about 68 or 70 credits to mitigate impact of waters of the U.S.,” Clausen said in the conference call. Clausen characterized the potential damage to the waters of the U.S. as nothing more than filling dry washes.
“It’s really a fill permit on dry riparian,” he said.
Clausen stated the company has offered between 200 and 260 “credits” that should be sufficient to meet the 70 credits needed for mitigation. Once the Army Corps selects the “appropriate mitigation lands” which, Clausen said he expects to occur “imminently”, the Army Corps can finish writing the permit.
Clausen only briefly mentioned the EPA’s central role in the 404 permit process. Clausen said that EPA would meet with the Army Corps and discuss the proposed draft permit before it is released in late March.
The EPA’s Nov. 7 letter stated that the Army Corps agreed with EPA that two of Augusta’s three mitigation proposals “would not provide appropriate compensatory mitigation for impacts to waters from the Rosemont Mine project.”
The EPA stated that while Rosemont’s third mitigation proposal to restore water below Pantano Dam on Davidson Creek would provide some environmental benefits, the plan was only suitable mitigation for a much smaller project such as a highway.
Augusta’s proposal to restore some water below Pantano Dam, EPA stated, “is inadequate to compensate for impacts proposed to be permitted at Rosemont Mine.”
During the call and accompanying slide presentation Clausen noted that the Coronado National Forest has a statutory deadline to conclude its current review of stakeholder objections to the Final Environmental Impact Statement (FEIS) and Draft Record of Decision (ROD) and issue a Final ROD no later than the end of April.
Clausen said that Augusta would receive the final 404 permit soon after the Forest Service issues the Final ROD. The company reiterated its assessment in a press release explaining why its board of directors rejected the HudBay offer.
“Augusta has received seven of the eight major permits for the Rosemont project and the Board is confident that the last major permit, the Clean Water Act 404 permit, will be issued by the end of the second quarter of 2014,” the company said.