Nevada mines test 150-year-old mining law

While federal law allows companies to mine on federal land that contains valuable minerals, it does not allow them to dump on land that has no minerals. This could send projects back to square one

Nevada is emerging as a major battleground to determine the fate of a century-and-a-half-old mining law as demand for critical minerals in the U.S soars.

Mining developers looking to extract minerals in Nevada are grappling with the aftermath of a 2022 federal court ruling against an Arizona copper mine, now known – infamously among mining corporations and their political allies – as the “Rosemont decision.”

The decision by a U.S. appellate court ruled that while federal mining law allows companies to mine on federal land where economically valuable minerals are present, they are not guaranteed the right to use federal land without valuable minerals as a dumping site for the mine.

The ruling has the potential to send mining projects — years in the making — back to square one.

In the case of a planned molybdenum mine by Nevada-based developer Eureka Moly LLC, a district court judge vacated the 2019 Bureau of Land Management’s approval of the project after ruling the developer did not have the right to dump waste rock on federal land without valuable mineral deposits.

District Judge Larry Hicks, who oversaw the Eureka Moly case, cited the Rosemount decision in his ruling, noting there was no evidence of valuable mineral deposits on the federal land it proposed to use as a waste dump, making the developers mining claims for those acres invalid.

“BLM cannot skirt the Mining Law requirement that valuable mineral deposits must be found in order to occupy the land,” Hicks wrote in his March decision.

Both Republicans and Democrats in the U.S. Senate described the ruling as “a significant departure from long-held mining practices,” but mining law experts say the ruling is simply a continuation of the General Mining Act of 1872.

“It’s not really a departure from the mining law,” said Mark Squillace, a professor of natural resources law at the University of Colorado. “It’s a long overdue reform of the way the federal government has administered the General Mining Law.”

Under the General Mining Law, anyone who discovers a valuable deposit of minerals has the right to develop those claims. However proving a potential mining site has valuable minerals that can be profitably developed is a strict test.

Squillace argued burying public land under waste rock is a clear indication that those public lands do not hold the economically valuable minerals that would make a mining claim valid.

“I’m hard pressed to see how anybody could think that they had a reasonable chance of making a profit and developing those claims, if they wanted to bury them under billions of tons of waste rock. So it doesn’t make any sense to say those claims were valid,” Squillance said.

“What the Rosemont Court did, and what these other courts have now done, is fully consistent with the way that the General Mining Law was always supposed to work,” he continued.

The Biden administration likewise acknowledged the legitimacy of the Rosemont decision in a federal opinion from the Solicitor’s Office.

Less space for potentially largest lithium mine in the U.S

In May, the Department of the Interior provided guidance for mining developers affected by the decision while “affirming that the Mining Law and the relevant Bureau of Land Management regulations do not allow for approval of those facilities on federal lands where there is no evidence of mineral discovery.”

But the ruling has had far reaching ramifications for mining sites in Nevada, including the Thacker Pass lithium mine which has the potential to be the largest lithium mine in the United States.

Earlier this year, Chief Judge Miranda M. Du ordered federal land managers to reexamine a state permit allowing Lithium Americas Corp.’s Thacker Pass mine to produce and store mining waste on more than a thousand acres of public land, citing the recent Rosemont decision.

The judge concluded that BLM violated federal law when it approved Lithium Americas plan to bury 1,300 acres of public land under waste rock without determining the company’s mining rights to those lands, however she did not vacate federal approval of the mine.

A federal review found that about 80 acres of federal land claimed by Lithium Americas did not have evidence of mineralization, making the use of those lands as a waste dump invalid. The plan of operations for the mine includes about 150 acres for “exploration-related disturbances” within the project area, a sizable chunk of land.

In response Lithium Americas said they plan on using the mine pit itself as a site for waste rock in a process known as backfilling, according to the review.

Under the Interior Department’s new guidance, Lithium Americas also has the option to conduct additional work to show mineralization on land planned for waste rock dumping, or use mill site claims — which can be placed on public lands without valuable minerals — instead of load claims for the affected areas. Lithium America was given the nearly limitless time to come up with a plan of action.

But environmental groups argue the Rosemont decision is still in play for the Thacker Pass lithium mine.

“Basically, the lower court did agree that it’s a Rosemont related case,” said John Hadder, the director of the Great Basin Resource Watch, which is involved in lawsuits against both the Thacker Pass lithium mine and the molybdenum case.

Environmentalists have appealed the ruling on the lithium mine to the San Francisco-based 9th Circuit Court, which is expected to hear oral arguments this month.

“What we’re hoping is that the 9th Circuit will say, okay, this is like Rosemont, which we already decided on so yes, the permit should be vacated,” Hadder said.

“The question is, are those claims valid under the mining law? Meaning can you turn a profit from them? Are they extractable for profit? Clearly for a pit area I’m sure the company does have valid mining claims. But what about outside the pit area where they’re putting millions of tons of material that they would later have to dig up? It stands to reason that you don’t put all that waste rock and tailings and so forth, where you would mine in the future,” Hadder continued.

Lawmakers knuckle-up

The Rosemont decision has put federal lawmakers on the defense, especially in Nevada where elected officials are pushing to make the state the center of lithium production in the U.S.

In April, Democratic Sen. Catherine Cortez Masto of Nevada introduced bipartisan legislation that would “undo the damage of this decision” which she called “misguided.”

The legislation, titled the “Mining Regulatory Clarity Act”, would make it legal to use part of a mining claim for mining related purposes on land without valuable minerals, including waste rock disposal.

“Senator Cortez Masto will continue to focus on passing her bipartisan legislation to address the misguided Rosemont decision and protect the good-paying jobs the mining industry supports in Nevada and across the U.S,” said Lauren Wodarski, a spokesperson for Cortez Masto Friday.

Hadder, from the Great Basin Resource Watch, criticized the bill saying it has the potential to put “directly affected communities, indigenous communities at enormous risk” by allowing developers to stake claims on public lands without proof of valuable minerals.

“The Rosemont decision is providing clarity as to the proper implementation of the mining law. Basically, these practices that the Cortez Masto is referring to have been illegal for many, many years. We’re getting the record straight,” Hadder said.

No good options

John Lacy, the director of the Global Mining Law Center at the University of Arizona, said he thinks the discussion around the Rosemont decision “is a bit overblown.”

However, Lacy argues the Rosemont decision has exposed gaps in the archaic General Mining Act of 1872, and the need for comprehensive reform of the law to address modern mining challenges.

The General Mining Act of 1872 already allows the use of public lands with no valuable minerals for mining related purposes under the mill site process, argued Lacy.

“One of the problems with mill sites is that they are relatively small, five acres each. You wind up having to stake a vast number of mill sites to be able to use the mill sites for waste disposal and tailings,” Lacy said. “Having to stake 100 mill sites, honestly doesn’t make much sense.”

Mill sites claims are also not valid until they are actually put to use in what Lacy calls a classic “chicken or the egg” type situation.

The General Mining Law also allows land exchanges, but the process requires developers to provide funding to federal land managers so they can buy high conservation or recreation value land in exchange for public land destroyed by mining. A land exchange would also require the developer to go through another federal environmental review process for the mining project changes under the National Environmental Protection Act.

Both options are generally unattractive to developers, said Lacy.

The option of leasing land as proposed by the Biden administration may prove logistically impossible, Lacy said. It would require developers to possibly pay for a land lease indefinitely as the waste rock deposited is not likely to move once the initial lease is over.

“It’s not surprising that a law that dates 150 years is not a law that we should be operating under to address public lands,” Squillance said, who also served as a special assistant for the Solicitor’s Office in 2000. “One way to address all these problems is to reform the mining law in some significant way that allows Congress and government agencies to address the current problems we have with the way that mining is done on our public lands.”

“It’s just kind of shocking that nothing has happened yet to deal with this issue. It’s long past time to do so.”

This article was originally published in Nevada Current.