State agency under pressure for permit

Sen. Steve Daines and Rep. Ryan Zinke, two of Montana’s three-member delegation to the United States Congress, sent a joint letter to Montana Gov. Steve Bullock Jan. 7, urging him to pressure the Montana Department of Environmental Quality to issue full approval for the Montanore Mine project in Lincoln County.

The letter comes in response to reports that the department was considering issuing a phased permit, which would cover the permits for only the evaluation phase of the operation, not the development and production phases.

“As it has come to our attention that the Montana Department of Environmental Quality is considering issuing a Record of Decision for a phased approval, we urge you to consider the benefits of a comprehensive approval for all the required permits and the benefits of the Montanore project to the local northwest Montana community and our state,” they wrote in the letter. “We understand the United States Forest Service is preparing a full project approval with permit conditions. The path defined by a comprehensive permit provides a level of certainty to encourage investors to assist in furthering this project. It also provides clear mandated benchmarks which demonstrate compliance or provide important information to the agencies. In contrast, an approval of only the evaluation phase or of partial states of the project by our state agency would be inconsistent with the federal review, jeopardize investments in the project, create uncertainty and further delay much-needed job creation and tax revenue for the Lincoln County community, which continues to face the highest unemployment rate in our state. Employing regulatory flexibility by your staff through a full permit approval will provide assurances the community and the company require to move forward.”

Montana gubernatorial candidate Greg Gianforte jumped on the bandwagon, issuing a press release urging Bullock and the department to issue the required permits without delay.

“Despite the Final Environmental Impact Statement, the Montana Department of Environmental Quality is considering a ‘phased approval,’ which would only continue the uncertainty of the project, leaving the community in limbo and jeopardizing money already invested,” Gianforte spokesman Ron Catlett wrote in a Jan. 7 press release.

Kristy Ponozzo, MDEQ’s public policy director, said the situation has been mis-stated.

“The Department of Environmental Quality has not used the term ‘phased approach’ or talked specifically of that type of approach,” she wrote in a Jan. 8 email to The Western News.

At issue in the current consideration is the potential degradation of Outstanding Resource Waters around the mine from the discharge of waste water. Under a 1995 Montana law, potential degradation in stream flow of more than 10 percent on an annual basis triggers an automatic environmental assessment of the impact, according to Montana Sen. Chas Vincent, who chairs the Montana Senate Natural Resources committee and worked to change the law in 2013.

Vincent’s bill, SB347, would have changed the law to trigger a new evaluation only in cases in which aquatic life, specifically defined as fish, were adversely impacted. The bill passed the legislature, but was vetoed by the governor.

Vincent said a water model commissioned by Mines Management Inc., owner of the Montanore project, showed such degradation might be possible after several years of mine operation. Based upon that water model, the department is legally required to address the potential concern in any permit issued for the mine.

Craig Jones, the department’s coordinator on the project, said he couldn’t comment specifically on what is going to be in the Record of Decision, which is expected sometime after Jan. 29, 2016, but did confirm the concern is about water quality. He also said the department is being mindful to issue a permit that can be defended in court.

“We have been getting a lot of questions about this,” Jones said. “We plan to approve what we legally can based upon the information and analysis laid out in the Final Environmental Impact Statement. We must make decisions mindful of all the laws that come into play here. The concerns we have today are concerns we’ve had for years and those concerns center on water, nothing has changed. We’ve tried to work through our concerns with the company and provide as much regulatory certainty as possible.”

Lincoln County’s local officials are taking a more reserved approach to the issue.

Commissioner Mark Peck said the mine project is undoubtedly of great importance to the county, but it is more important for the mine to be legally permitted in order to weather the anticipated legal challenges.

“There’s no question that the mine being permitted properly is of the utmost importance to Libby, Montana,” Peck said.

Vincent agreed.

“What I, and what I hope everyone, will be asking DEQ to do will be for them to exercise their regulatory flexibility as an agency in such a way that will allow Montanore to proceed with a permit that is legally defensible.”

The MDEQ Record of Decision is only one of the many hurdles still remaining for the Montanore project, however.

Kootenai National Forest supervisor Chris Savage said Mines Management Inc. still needs to complete their wetlands mitigation plan and have it approved by the Army Corps of Engineers. Additionally, the company needs to acquire more than 5,000 acres of land, 500 of which need to be purchased prior to any further progress with the evaluation.

Beyond the regulatory hurdles, Mines Management is in financial distress. The company sold more than $1 million worth of equipment in order to cover operational expenses. The move, according to chief executive officer Glenn Dobbs, should have provided enough operating cash to get the company well into the first quarter of this year. 

The company’s stock has been on a steady decline since February 2011, when it was at $3.90 per share. Mines Management closed at $.40 Monday afternoon, up from the 5-year low point of $.16 of December 2015.