Court Affirms Contested Mine Permit Revision Changing Underground Uranium Mine from Standby to Active Status

In an appeal on the record taken by environmental groups pursuant to Rule 1-074 NMRA, the First Judicial District Court in Santa Fe affirmed a significant revision of Mt. Taylor Mine’s existing mine permit originally issued decades ago under the 1993 New Mexico Mining Act (Mining Act), N.M. Stat. Ann. §§ 69-36-1 to -20. The permit revision was reported on previously in Vol. XXXV, No. 3 (2018) of this Newsletter. In a decision dated July 26, 2019, the district court affirmed the order of the New Mexico Mining Commission (NMMC) holding that the NMMC’s permit decision was not arbitrary or capricious, was supported by substantial evidence, and was otherwise in accordance with law. See Multicultural Alliance for a Safe Env’t v. NMMC, No. D-101-CV-2018-02492, slip op. (N.M. Dist. Ct. July 26, 2019). The appellants raised five issues in their challenge to the NMMC’s permit decision. Three of those issues are briefly discussed here.

First, the appellants argued that Mt. Taylor Mine’s proposal to come off standby and return to active status was a ruse to avoid a 20-year statutory limit on standby status as well as final reclamation and closure. Second, the appellants argued that the NMMC erred in excluding economic evidence they wished to present to show that economics are not favorable for uranium production anytime soon. Third, the appellants argued that the “plain meaning” of the identical statutory and regulatory definition of “mining” required that, in order to come off standby status and return to active status, the mine had to immediately commence production.

The Mining Act allows for a five-year term of standby status and “no more than three additional five-year terms.” N.M. Stat. Ann. § 69-36-7(E). According to the appellants, this language limits a mine’s eligibility for standby status to 20 years, and because the mine in question had been on permitted standby for nearly 20 years, the permit revision to return to active status violated the Mining Act because it contemplated an extended, eight-year period of rehabilitation to reinstate production of new uranium ores from the Mt. Taylor Mine, a deep underground mine. The court, however, found that the NMMC’s decision upholding the permit—which had been issued originally by New Mexico’s Mining and Minerals Division (MMD)—was “not arbitrary or capricious and is otherwise in accordance with law.” Multicultural Alliance, slip op. ¶ 3.

The appellants also asserted on appeal that the NMMC, and before it MMD, had failed to consider economic evidence that the appellants argued should have been admitted to demonstrate that the Mt. Taylor Mine could not economically sustain production activities in the foreseeable future. In support of this claim, the appellants pointed to the fact that the Mining Act required the NMMC to consider economics when it originally adopted the Mining Act Reclamation Program (MARP) regulations in 1994. See N.M. Stat. Ann. § 69-36-7(A)(1). In response, Rio Grande Resources Corporation, the owner and operator of the Mt. Taylor Mine, pointed out that although the NMMC’s regulations required a showing of future economic viability to go on standby status, no comparable showing or economic consideration was necessary to come off standby, and instead the regulations left the decision whether to seek a return to active status to the business judgment of the mining company. Ultimately, the court found that the NMMC’s decision “prohibiting economic evidence was not arbitrary or capricious.” Multicultural Alliance, slip op. ¶ 6.

Finally, the appellants argued that it was improper for the NMMC to allow the Mt. Taylor Mine to come off standby status and return to mining, because both the Mining Act and the MARP regulations define “mining” to require actual extraction operations to produce ores. The mine argued that because the 3,000-foot-deep underground mine had been on standby for many years, including a period of engineered “wet standby” whereby the mine’s shafts, tunnels, and drifts were allowed to be re-flooded with water once kept from the mine through dewatering activities, the reality is such that many active rehabilitation activities need to occur while the mine is in active status in order to be able to produce new ore from underground in the future. Both MMD’s key witness in the administrative appeal adjudication and a key commissioner from the New Mexico Environment Department who explained his vote to affirm permit issuance by MMD pointed out that the definition of mining (which itself included “exploration”) should be interpreted more broadly to allow for broader regulatory jurisdiction ensuring greater environmental protections. On this point, the court reasoned that New Mexico law requires caution in applying the plain meaning rule, and that a court generally should defer to an agency’s reasonable interpretation of statutes and regulations the agency is charged with administering, particularly where they implicate agency expertise. See id. ¶¶ 7–9 (citing, among other cases, Rio Grande Chapter of Sierra Club v. NMMC, 2003-NMSC-005, ¶ 17, 61 P.3d 806).

Editor’s Note: The reporter represented the Rio Grande Resources Corporation in the proceedings described in this report.

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