Kennecott says no federal permit needed for nickel mine after water discharge design modified

Kennecott says no federal permit needed for mine

TRAVERSE CITY, Mich. — Kennecott Eagle Minerals Co. said Wednesday it no longer needs federal authorization for a nickel and copper mine in Michigan’s Upper Peninsula and the way is clear to begin construction of the bitterly contested project after eight years of preparation.

But an official with the Environmental Protection Agency said Kennecott might be speaking too quickly.

EPA has not decided whether Kennecott is correct in its claim that by changing the design of a wastewater disposal system, the company eliminated the requirement for a permit, said Steve Roy, a geologist with the agency’s regional office in Chicago.

“This is still being considered by the EPA,” Roy said. If the company starts building the mine before the government reaches a decision, “they obviously are at some risk,” he said. “We were quite surprised to hear about this.”

Kennecott notified EPA on Wednesday it was withdrawing its application for a permit for underground discharge of treated wastewater from the mine planned for rural Marquette County, spokeswoman Deb Muchmore said.

Previously, the company agreed it was legally required to get a permit because it planned to inject the treated water back into the groundwater through a network of soil-covered infiltration pipes.

Kennecott announced a new plan this month that calls for keeping the pipes on the surface and covering them with Styrofoam insulation and a liner. The treated water still would be pumped into the groundwater. But because the pipes no longer would be underground, the company’s legal advisers believe federal permission is unnecessary, Muchmore said.

“The company is confident it has all the permits required for construction and operation of the mine,” she said.

Kennecott, a subsidiary of London-based Rio Tinto PLC, is targeting a six-acre underground deposit expected to yield 250 million to 300 million pounds of nickel and about 200 million pounds of copper. It would be the nation’s only mine where nickel is the primary mineral extracted.

The company discovered the ore body in 2002 and submitted a state application in 2006. State regulators issued permits the next year, but legal challenges have delayed the project. Environmental activists contend it would pollute groundwater in the isolated Yellow Dog Plains area, while the company says it can build and run the mine safely.

Muchmore said Kennecott redesigned the wastewater system to cut red tape and get the project going. Even after construction begins, it will take three to four years to prepare for mining, she said.

In a letter Monday, Kennecott general manager Jon Cherry formally notified the state Department of Natural Resources and Environment it had obtained all necessary permits and was “now in a position to move ahead” with mining activities on land leased from the state.

Lynne Boyd, chief of the DNRE’s Forest Management Division, responded with a letter authorizing the company to proceed. But spokesman Robert McCann said if it turns out Kennecott still needs an EPA permit, the company would be in violation of the lease.

“For Kennecott to self-proclaim that they do not need the federal permit is clearly overstepping the bounds of what is proper,” said Michelle Halley, attorney for the National Wildlife Federation, which is suing to block the project.