Editorial: Good news for US miners in Ninth Circuit

During the week ended July 12, the 28th trading week of 2008, miners active in the western U. S. soaked in a rare bit of good news from the U. S. court system.

The U. S. Court of Appeals for the Ninth Circuit set forth a strongly worded opinion on July 1 that marks a significant step back from its more activist decisions reviewing actions by land-management agencies.

The 11-0 decision has huge, positive implications for any mining project in the Ninth Circuit that’s in the litigation phase of the permitting process.

This appeals court, based in San Francisco, has traditionally been the most environmentalist-friendly court in the country. It has jurisdiction over most of the western states, including the mining states Alaska, California, Arizona, Nevada, Idaho and Montana.

This latest court decision centred around the anti-development NGO Lands Council and its now-overturned preliminary injunction against the U. S. Forest Service and its plan for some modest, selective harvesting of wood in Idaho’s panhandle.

The harvesting project had the advantages of lowering the risk of catastrophic fire, insect infestation, and disease, and fuelling a struggling local economy and preventing job loss.

Mark Rey, the U. S. Department of Agriculture’s under secretary for Natural Resources and Environment, calls it “the most important decision involving a Forest Service environmental case in the last two decades.”

It’s worth quoting at length some heartening, common-sense conclusions reached in the decision: “In essence, Lands Council asks this court to act as a panel of scientists that instructs the Forest Service how to validate its hypotheses regarding wildlife viability, chooses among scientific studies in determining whether the Forest Service has complied with the underlying Forest Plan, and orders the agency to explain every possible scientific uncertainty. . . this is not a proper role for a federal appellate court. But Lands Council’s arguments illustrate how, in recent years, our environmental jurisprudence has, at times, shifted away from the appropriate standard of review and could be read to suggest that this court should play such a role.”

Rather, the court wrote: “Our proper role is simply to ensure that the Forest Service made no ‘clear error of judgment’ that would render its action ‘arbitrary and capricious’. . . This approach respects our law that requires us to defer to an agency’s determination in an area involving a ‘high level of technical expertise.’ We are to be ‘most deferential’ when the agency is ‘making predictions, within its (area of) special expertise, at the frontiers of science.'”

The court also emphasized that National Forests are not set aside for non-use, and that, in balancing hardships, a court must weigh the economic hardships raised against environmental harm. These public interests include layoffs, job loss and impacts to a struggling local economy.

• Inmet Mining’s new $2-per-share cash offer for Petaquilla Copper looks set to clear up the confusion surrounding the undeveloped Petaquilla copper deposit in Panama.

The offer values the junior at $345 million, or roughly double its value before the bid.

The two companies have been almost equal partners at the project, but Petaquilla Copper threw the venture into disarray in May, when it disputed Teck Cominco’s apparent 26% earn-in on the project.

Just last March, the three had come up with a preliminary deal that would have seen Inmet take the lead in operating and financing development of what is one of the world’s largest undeveloped copper deposits.

A mine there would cost US$3.5 billion to build and would exploit 1.1 billion tonnes of ore grading 0.5% copper.

Inmet has been publicly at odds with Petaquilla’s manoeuvre against Teck, and Inmet’s president and COO Jochen Tilk now says the main motivation for the current bid is a desire to rapidly advance project development.

It’s hard to see what fourth party would want to get involved in this squabble and launch a competing offer, so we see Petaquilla Copper shareholders taking the money and running — whatever the junior’s directors end up recommending.

• No TGIF for Eike Batista: On July 11, Brazil’s federal police raided the offices of a subsidiary of Batista’s TSX-listed MMX Mineracao eMetalicos, in both Rio de Janeiro and Amapa state.

MMX says the police were carrying out a search warrant issued by Amapa’s federal court to obtain documents and information concerning an investigation over alleged offences in the public auction for the concession of the Amapa Railway, which is part of the MMX Amapa System.

MMX Amapa says it “denies all allegations concerning any transgression or offence regarding the aforesaid public tender” that wound up with the state government granting the subsidiary, MMX Amapa, licence to operate the Amapa Railway.

The company says police are also alleging an offence by MMX Amapa of smuggling “gold mined in its mines in the state.” MMX Amapa retorts that it “does not carry out any gold mining activity in the state of Amapa or in other region of the country and is not involved in any smuggling activity.”

MMX says it will both cooperate with authorities and defend its assets and interests in the country.

Send your Letters-to-the-Editor and other op-ed submissions to the Editor at: tnm@northernminer.com, fax: (416) 510-5137, or 12 Concorde Pl., Suite 800, Toronto, ON M3C 4J2.