Judge OKs state permit for Kennecott nickel mine

TRAVERSE CITY, Mich. (AP) – Michigan environmental regulators acted lawfully by issuing Kennecott Eagle Minerals Co. a permit to build and operate a nickel and copper mine in the Upper Peninsula, a judge has ruled.

Circuit Judge Paula Manderfield rejected contentions by opposition groups that the Department of Environmental Quality should have denied the company's application because the mine is likely to damage water quality, plants and wildlife. She also sided with the DEQ in its finding that the mine's roof would not subside or collapse, as opponents have warned.

The Ingham County judge's ruling this week was the latest in a series of legal victories for Kennecott, which already has cleared land and constructed surface facilities for the mine in northwestern Marquette County. It began blasting and drilling bedrock for the entrance to the underground tunnel in September. Company officials say production of nickel and copper is scheduled to begin in 2013.

“We are not surprised ... but of course it is disappointing,” Michelle Halley, an attorney for the National Wildlife Federation, said Wednesday. “We certainly believe that we should have prevailed.”

Halley said opponents had not decided whether to take the case to the Michigan Court of Appeals. Other groups fighting the mine include the Keweenaw Bay Indian Community, the Huron Mountain Club and the Yellow Dog Watershed Preserve.

Adam Burley, president of Kennecott Eagle Minerals, said the ruling demonstrates the legal integrity of Michigan's environmental regulatory system.

“We are confident that we can operate in an environmentally safe and responsible manner, while contributing to job creation and the economic vitality of the area and state,” Burley said.

Kennecott Eagle Minerals, a subsidiary of the Anglo-Australian mining company Rio Tinto PLC, is targeting an underground ore deposit expected to yield up to 300 million pounds of nickel and about 200 million pounds of copper, plus smaller amounts of other metals. It would be the only U.S. mine where nickel is the primary target, not just a byproduct from extraction of other minerals.

Nickel is used to make corrosion-resistant alloys including stainless steel. It's an ingredient in products such as batteries, magnets and ceramics.

Kennecott applied for its mining permit in 2006. The DEQ approved it the following year, a decision upheld by an administrative law judge after 40 days of testimony. Opponents then appealed to Manderfield.

“The DEQ issued this permit after lengthy, thorough review and careful consideration,” agency spokesman Brad Wurfel said. “We were confident it would withstand a court challenge, and we are pleased to see that it has.”

The mine site is in a remote area known as the Yellow Dog Plains prized by hunters, anglers and hikers. The underground chamber would be drilled beneath the headwaters of the Salmon Trout River, a tributary of Lake Superior and spawning grounds for the rare coaster brook trout.

The Huron Mountain Club, an exclusive retreat and wildlife preserve, owns property within four miles of the mine site, including an 11-mile stretch of the riverbank. The Keweenaw Bay tribe also owns property on the river and has treaty-guaranteed hunting, fishing and gathering rights in the countryside. Tribal members say Eagle Rock, a 60-foot-high outcrop near the planned entrance to the mine tunnel, is a sacred area of worship.

In their appeal, opponents contended Kennecott had miscalculated the stability of the bedrock that will form the underground mine's roof, or “crown pillar.” Several experts testified it would be unstable and likely would collapse. But others retained by the DEQ and the company said studies and testing showed the 96-yard-thick roof would hold fast, and Manderfield said there was enough evidence to support their judgment.

Manderfield also accepted the company's assurances that it would take steps to prevent acid rock drainage, which happens when sulfide ores undergo a chemical reaction to create sulrific acid after exposure to air and water. The nickel and copper sought by Kennecott are contained in sulfide rock beneath the earth's surface. Opponents say acidic leakage could cause devastating pollution of streams and groundwater.

Burley said Kennecott would keep working to ease opponents' concerns.

“In building a 21st century mine, both the protection of Michigan's environment and operating safely are paramount,” he said.