Toronto-based Hudbay Minerals Inc. plans to spend $20 million in 2017 on its proposed Rosemont open-pit copper mine, down from $30 million last year and $50 million in 2015.
“Arizona spending of $20 million on the Rosemont project is intended to support ongoing permitting efforts,” Hudbay reported last week.
The roll-back in investment in Rosemont comes at the same time Hudbay states it may challenge the jurisdiction of the U.S. Army Corps of Engineers to require Hudbay’s subsidiary Rosemont Copper Company to obtain a Clean Water Act permit before construction can begin on the $1.5 billion mine.
Hudbay’s threat to challenge the Army Corps’ permitting authority comes after the agency’s district office recommended last summer that the Section 404 CWA permit be denied. The Corps regional office in San Francisco is expected to make a decision on Hudbay’s permit application later this year.
Neither Hudbay, nor Rosemont’s former owner, Vancouver, B.C.-based Augusta Resource Corp., had previously challenged the Corps’ permitting authority since plans for the Rosemont mine were first announced in 2006.
Hudbay’s sabre-rattling comes two months after it was reported that Rosemont’s lobbyist was working on President Trump’s transition team. David Bernhardt served as the head of Trump’s Interior Department transition team before being removed in an apparent purge of lobbyists from the team, the Arizona Daily Star reported in November.
Bernhardt lobbied for the mining company from 2011 through 2015, among numerous other lobbying contracts, and remains a consultant to Rosemont, the Daily Star reported.
Hudbay stated in November that it plans to release an updated feasibility study on the Rosemont project in the 1st Quarter of 2017. The study will be based, in part, on extensive exploration drilling at the Rosemont site conducted in late 2014 and 2015.
The exploratory drilling came after Hudbay announced that the previous feasibility study prepared by Augusta Resource in 2012 was not done by a “qualified” person.
“A qualified person has not done sufficient work for us to classify Rosemont’s mineral reserves or resources as current mineral reserves or resources,” the Toronto-based company stated in its Annual Information Form for 2014.
The lack of a “qualified person” raises questions over Augusta’s previous feasibility studies that provided resource estimates for the proposed open pit copper mine in the Santa Rita Mountains on the Coronado National Forest southeast of Tucson.
Hudbay reclassified the amount of copper as “historical estimates” rather than as current mineral reserves. Hudbay CEO Alan Hair told investment analysts in a Nov. 3 conference call the company expects to issue a report in early 2017 “outlining the feasibility work completed to date and an updated reserve and resource estimate.”