Updated: 6:31 p.m. | Posted: 9:03 a.m.
Government lawyers asked a federal judge Tuesday to dismiss a lawsuit by developers of the proposed Twin Metals copper-nickel mine who are seeking to regain their mineral rights leases, arguing that their dispute belongs in a different court.
The Obama administration last December declined to renew the long-standing leases that Twin Metals Minnesota needs for the underground mine it wants to build in northeastern Minnesota. At the time, the government cited the potential for irreparable harm to the nearby Boundary Waters Canoe Area Wilderness from acid mine drainage.
Twin Metals sued to get those leases back, saying it has already invested $400 million in the project. The company's congressional supporters, meanwhile, are trying both to persuade the Trump administration and to pass legislation to reverse the lease decision. They're also trying to undo a related decision that imposed at least a two-year moratorium on minerals exploration in a watershed that flows into the Boundary Waters, including the Twin Metals site southeast of Ely.
Sean Duffy, an attorney for the Bureau of Land Management and other federal agencies involved, urged U.S. District Judge Susan Richard Nelson to dismiss the lawsuit, arguing that it's a contract dispute that under federal law can be brought only in the Court of Federal Claims. He also argued that the government had the discretion to refuse to automatically renew the leases.
But Twin Metals lawyer Daniel Volchok framed the case as a property rights dispute that the district court has the jurisdiction to hear. He said no rational prospector would undertake the huge investment of time and money necessary to develop a mine if its mineral rights weren't secure. He said the government was obligated to renew Twin Metals' leases instead of "pulling the rug out" from under the company. And he maintained that Twin Metals already has bought and paid for the metals under the land covered by the leases.
"They are ours," he said. "We own these minerals." Alex Ward, an attorney for Northeastern Minnesotans for Wilderness, an environmental group that was granted intervenor status, backed the government's arguments. He said Twin Metals still has a legal path for recouping its lost investments and lost profits by going to the Court of Federal Claims, which has the power to award monetary damages but not to order renewal of the leases. He said it might not be the remedy Twin Metals prefers, but the company must follow the rules.
"Money damages are an adequate alternative remedy," he said.
Volchok countered that Twin Metals doesn't want monetary damages, it wants to mine.
"The plaintiffs are miners," he said. "They want to finish the project they started."
Nelson took the arguments under advisement. She said she would study them carefully but did not say when she would rule.
The Bureau of Land Management first issued the leases in 1966 to a predecessor of Twin Metals and renewed them in 1989 and 2004. But by the time Twin Metals sought another renewal in 2012, strong opposition had developed to copper-nickel mining in northeastern Minnesota, primarily because of concerns about the pristine Boundary Waters. The problem is that the vast, untapped reserves of copper, nickel and precious metals in the region are bound up in sulfide ores that can leach sulfuric acid and other pollutants when exposed to air and water.
Twin Metals, which is owned by Chilean mining company Antofagasta PLC, is separate from another proposed mine, PolyMet, which is much further along in development and has also aroused strong opposition from environmentalists.
While the proposed PolyMet mine near Babbitt and processing plant near Hoyt Lakes are just a few miles from the Twin Metals site, they lie in a different watershed that flows toward Lake Superior instead of the wilderness.
Backers of both projects insist they can mine without harming the environment while bringing thousands of badly needed jobs to the economically struggling Iron Range.