Red Lady mining deal off the table for this year

Parties are still “deliberately optimistic…”

It was hoped that by about this time in 2012 there would be the solid foundation of a deal that would forever eliminate the possibility of molybdenum mining on Mt. Emmons. It would take local, state and federal action, with the U.S. Congress being a main player. Given the state of the U.S. Congress, to no one’s surprise that foundation hasn’t yet been poured. But the blueprint for a deal remains on the table with the hope of a potential pact coming together sometime in the near future.

Last May mining company U.S. Energy, the town of Crested Butte, the Red Lady Coalition, the High Country Citizens Alliance and Colorado’s two U.S. senators announced a collaboration to try to compensate U.S Energy to give up its Red Lady mining rights by essentially making a federal land trade. The company was on board but made it clear they wanted to see “substantial” completion of such a deal by year’s end.
“It is admittedly moving at a much, much slower pace than any of us wanted but the lines of communication are still very much open between all of us, including U.S. Energy,” explained Red Lady Coalition president Bill Ronai. “They wanted significant progress by the end of the year but given the state of Congress, it became obvious that it won’t happen this year. Having said that, senators Mark Udall and Michael Bennet are still both very much supportive of finding a solution.”
U.S. Energy president Mark Larsen expressed some disappointment that the senators indicated the timing wasn’t right to aggressively pursue legislative action last summer, but said the company would still like to see a deal reached. “We are all on the same page,” Larsen said. “We had what we felt was good momentum. And last summer a staffer with Senator Bennet’s office asked if we could wait until the next session of Congress to take up the matter. We had invested a lot of time and dollars in the meetings and discussions over the potential for a deal and we had engaged the Western Land Group as advisors. The costs were adding up. When we got that word from the senator’s office, we had to step back.”
Crested Butte Mayor Aaron Huckstep added, “Basically, we are waiting for the November election to be over. We are still working with both senators and all of us are in very regular communication, but the end-of-the-year timeline won’t happen.”
“We are going to advance as quickly as we can and we would love to see something happen in 2013 but there is no end date,” said High Country Citizens Alliance executive director Dan Morse. “This is a very complex situation.”
Under a general concept agreed to by the mining company, the local environmental organizations and the town of Crested Butte, the decades-old controversy over extracting moly from Red Lady could likely end with U.S. Energy Corp. walking away with rights to other federal lands worth tens of millions of dollars. Responsibility for running the water treatment plant located on the flank of Mt. Emmons would then shift to some sort of local control and responsibility. Running that plant costs about $1.8 million annually.
The original goal was to have Congress approve a “mineral withdrawal” for Mt. Emmons as part of the deal. That would essentially prohibit mining on Mt. Emmons forever unless another act of Congress was passed to open it up to mining once again. Udall and Bennet could introduce such legislation. Udall sits on the Senate Energy and Natural Resources Committee and the subcommittee on Public Lands and Forests.
As part of the broad concept, it was made clear that until a deal was signed, U.S. Energy would pursue its mining plans and permits. In the same vein, the environmental organizations and the town would continue to thoroughly scrutinize those plans. Last spring, Larsen commented, “We will continue to work on the Plan of Operations [PoO] for the Mt. Emmons mine, which we plan to submit in the first quarter of 2013. This dual path approach provides us with time to continue to gauge the likelihood of a federal land exchange, while preserving our rights to advance the project towards the permitting process and the resumption of our project marketing efforts at the beginning of 2013. At the same time, it is encouraging to see parties with opposing views come together to develop creative and mutually beneficial solutions. U.S. Energy appreciates the efforts of all the stakeholders in this project to respect and accept different perspectives, and find common ground.”
Larsen said this week that the company expects to file the PoO with the Forest Service office in Delta sometime before the end of this year. “We have deadlines to meet and we have to go about our business,” he said.
“We certainly expect that U.S. Energy will submit a plan sometime late this year or early next,” said Morse. “They have to do that based on some water rights requirements and we are fine with that. The two-pronged approach was made clear when we agreed to try this new idea. We will continue to challenge the mine as we have historically. Everyone is on the same page with these expectations.”
“They have to protect their conditional water rights and we understand that,” said Ronai.
“The dual track will continue on both sides and that is understood very clearly by both sides,” said Morse.
“To that point, the Red Lady Coalition will continue its economic study and hope to complete it next year,” said Ronai, “but everyone is still at the table looking for a permanent solution.”
“Everyone has been very open with each other,” said Larsen. “Now, we have had some hiccups with HCCA and at times came close to asking them to step away but we are all still talking.”
“This type of land exchange is pretty rare and can take a very long time,” said Huckstep. “Time is still of the essence but there are a lot of moving parts. As long as we can continue with some momentum, we’ll get there.”
“We are all still moving in the same direction,” said Morse. “There is a sense of deliberate optimism. We are all being very deliberate with this idea, given all the ramifications. But we all want the same end result.”
Huckstep summed it up that U.S. Energy should be expected to submit a plan to the Forest Service soon and the local parties and general public shouldn’t be surprised by that. “We will be expected to scrutinize that plan as we normally would whether a potential deal was on the table or not,” he said.
“As for us, we still have an open door policy,” reiterated Larsen. “If a proposal starts heating up from the legislative side of things, we would listen. If some other legitimate proposal came to us to eliminate the prospect of a mine on Mt. Emmons, we would explore the proposal and see if it had merit.
“Unless something happens at the eleventh hour, we don’t expect anything new this year,” Larsen continued. “This Congress has been chaotic to say the least. We’ll see if someone picks it up and runs with it next year. We certainly haven’t closed the door but we are not interested in a slow, five-year process that asks us to park our other efforts on the sideline. We are open to ideas and we want a reasonable timeline. The Colorado representatives will have to participate across party lines but it just seems like such an uphill battle in this political climate.”
“These things take time and it’s not always smooth, but we are still hammering away,” concluded Ronai.