Court gives green light to uranium mine in state forest

The sun sets at Grand Canyon National Park in northern Arizona April 14, 2015. Picture taken April 14. REUTERS/Jim Urquhart

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  • 9th Circuit says value of grandfathered mine could be based on projected profits, not sunk costs
  • The project is located near the Grand Canyon and many indigenous cultural sites
  • Mine owner says it will be a clean energy asset and reduce dependence on Russian uranium

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(Reuters) – Energy Fuels Resources can operate a uranium mine near the Grand Canyon on public land closed to new mining claims nearly a decade ago, a federal appeals court has ruled in a ruling. challenge by three environmental groups and the Havasupai tribe.

The 9th U.S. Circuit Court of Appeals – which revived the lawsuit in 2018 – said on Tuesday that Energy Fuels’ right to mine in the Kaibab National Forest was acquired in 2012, even though development of the mine was suspended after the fall in uranium prices in 1992. .

The Grand Canyon Trust, the Center for Biological Diversity and the Sierra Club argued that the US Forest Service should have deducted the “sunk costs” of the suspended development when it calculated whether uranium was a “valuable mineral deposit” in 2012, as required to establish Energy Fuels’ claim under the federal Mining Act.

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Instead, the Forest Service relied on a rule that the United States Department of the Interior has used to administer the Mining Act for more than 40 years, which is based solely on estimates of the sums net cash – essentially, projected profits.

The 9th Circuit said the Interior Department’s approach was a reasonable interpretation of “precious” and that the Forest Service did not act arbitrarily in reliance on it.

“It is a basic tenet of economics that sunk costs should be ignored when making a rational decision about whether to incur additional expenses,” Circuit Judge Jay Bybee wrote, quoting a crowd economic treatises and opinions from other circuits in non-mining contexts. He was joined by circuit judges Mary Schroeder and Johnnie Rawlinson.

Located about 10 miles from the Grand Canyon, the Pinyon Plain Mine – formerly known as the Canyon Mine – includes areas of religious and cultural significance to the Havasupai, who joined the 2013 lawsuit in federal court in Arizona but did not participate in the current call. .

Aaron Paul of the Grand Canyon Trust said environmental groups are “reviewing the expert panel’s advice and assessing whether to seek further review.”

Energy Fuels spokesman Curtis Moore said the company is pleased the notice allows it to “advance this clean energy resource under the watchful eye of our state and federal regulators,” and reduce the dependence of US nuclear power plants on uranium from “Russia and its allies”.

The Pinyon Plain mine is “currently in a standby state” while “awaiting further increases in the price of uranium,” Moore added.

The case is Grand Canyon Trust et al. v. Heather Provencio, Forestry Supervisor, Kaibab National Forest, et al., 9th US Circuit Court of Appeals, No. 20-16401

For Grand Canyon Trust et al. : Aaron Paul of Grand Canyon Trust; Marc Fink, Center for Biological Diversity; Neil Levine of Public Justice; and Roger Flynn of Western Mining Action Project

For Provencio and USFS: Thekla Hansen-Young and Sean Duffy, United States Department of Justice

For Energy Fuels Resources (USA) Inc.: D. Lee Decker of Gallagher & Kennedy

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