Hudbay appeals court decision on Rosemont

Hudbay Minerals (TSX, NYSE: HBM) has filed its initial brief with the US Court of Appeals regarding the decision made by the US District Court for the District of Arizona almost a year ago to deny the company from proceeding with construction at its Rosemont project.

In July 2019, the District Court revoked the US Forest Service’s issuance of the final record of decision for Rosemont, which is expected to become one of the largest copper mines in the country if completed.

The record of decision was issued in June 2017 after a thorough process involving 17 co-operating agencies at various levels of government.

Hudbay’s filing on Monday follows the initial brief filed by the US federal government last week. Both briefs outline how both Hudbay and the government believe that the District Court misinterpreted federal mining laws and Forest Service regulations as they apply to Rosemont.

“We believe, based on the arguments filed by Hudbay and the government, that the appellate court will reverse the District Court’s decision, allowing us to move forward with constructing and operating the Rosemont project,” Hudbay president and CEO Peter Kukielski said in a media release.

The briefs assert that current law broadly authorizes mining-related activities, such as ore processing and tailings storage, to be conducted on open Forest Service lands. The District Court’s determination that the Forest Service’s mining regulations do not apply to mining activities unless those activities are conducted entirely on valid mining claims is contrary to plain language readings of the general mining law, as well as Forest Service regulations, which explicitly allow for mining-related activity to occur on lands not covered by any mining claim:

The Hudbay brief states:

“Prior to the District Court’s decision, no court had ever held that a mining plan of operations may only be approved if all mining and mining-related operations will occur exclusively on valid mining claims. The District Court imposed this novel requirement on the Forest Service after misreading both the relevant statutes, which provide a broad grant of free and open access to federal lands for mining and mining-related operations, and the relevant regulations, which authorize the Forest Service to approve those operations on or off of mining claims.”

The federal government brief states:

“The district court’s decision … rested on a fundamental misinterpretation of the Mining Law and the regulatory scheme applicable to the (US Forest) Service’s review of mining plans. That decision should be reversed.”

“We believe that the brief filed today thoroughly demonstrates that the District Court misinterpreted federal mining laws and ignored more than 150 years of precedent,” Andre Lauzon, vice president of Hudbay’s Arizona business unit said.

“The brief also points out that this decision, if not reversed, will disrupt the longstanding policy of the US federal government to promote mining on public lands, including within national forests,” he added.

The company is anticipating a final decision in the appeal process in late 2021.

Shares of Hudbay Minerals closed 2.3% higher on Monday. The Toronto-based miner has a market capitalization of just over C$1 billion.

AG/SAG Mill Liners Installation

Preparation Work

1. Prepare all need to replace mill liners.
2. Check the shape and size of all liner plates, remove hair wings, casting slag, etc.;
3. Be prepared to replace the required bolts, nuts and washers and other accessories;
4. Check carefully whether lifting appliances, appliances and rigging are safe and reliable.
5. Prepare 36V safety power supply for construction lighting in the tube;
6. Before the mill is stopped, there must be enough minerals in the barrel suitable for the entry and exit of the liner before stopping.
7. All construction personnel must wear labor protection supplies including hard hats, masks, and non-slip shoes before entering the site.

Installation Steps

1. Remove the feed trolley and lift the receiving hopper;
2. Remove the fixing bolts of the liner piece by piece to protect and clean up all screw holes. Do not dismantle more than 3 sets of liners at one time;
3. Lift out the removed AG mill liners one by one by using the driving, and then hang the lining board to be replaced into the tube;
4. Under the direction of the hoisting commander, use the vehicle to wear the wire rope through the bolt holes of the cylinder, pull the lining board to the required installation position, and then use the crowbar to straighten the screw and nut. Fill the two screw holes of the lining board alternately with hemp rings (not less than 5 in each group), install the leak stop rubber ring and flat washer and tighten the nut;
5. When installing the mill liner, the deposits and debris at the installation location should be cleaned up;
6. If it is found that the discharge trough of the grid plate installation site is seriously worn, the discharge trough must be replaced before the grid plate is replaced;
7. Install the recovery feed trolley and mine funnel.

Safety measures and technical requirements

1. Before lifting operations, all appliances must be carefully checked in strict accordance with relevant regulations. The strapping must be firm when lifting items, and pedestrians should be reminded to avoid. The command must appoint a special person to be responsible;
2. The construction personnel must strictly abide by the safety technical operation regulations, eliminate illegal commands and illegal operations, wear various labor protection supplies, and prohibit drinking and drinking;
3. The mill liners should be fixed firmly without looseness. All bolts must be tightened in place. There shall be no slurry leakage in the gaps around the screw after driving;
4. Take good protection around the site to prevent falling. High-altitude operations should fasten seat belts in accordance with relevant regulations, to prevent simultaneous up and down operations;
5. When the cylinder needs to be driven according to the replacement of the lining plate, first of all, it is necessary to confirm whether there are people in the cylinder and the surroundings before the cylinder can be driven. The hollow shaft lubricating oil pump must be started before cranking;
6. When working in the mill, you must first cut off the power of the relevant equipment and hang the warning sign. The lighting in the tube must ensure good cable insulation and use safe voltage;
7. Construction equipment such as slings, rigging, and crowbars will be discontinued once they are found to be damaged or defective.

@Nick Sun      NICK@XZHUAGANG.COM