Hudbay’s future flagship project has been shut down for the moment following a decision by an Arizona court.
The decision, released August 1 by the U.S. District Court for the District of Arizona, has revoked the permission for the site given previously by the U.S. Forest Service, stating that the mine would be “inconsistent with standards and guidelines” on a number of wildlife, maintenance and habitat-related concerns.
The court decision comes after a series of lawsuits challenging the Forest Service’s issuance of a final record of decision for the Rosemont mine project. The conclusion of the court’s decision states that the Forest Service, in approving the Rosemont project, misapplied “Rosemont’s right to surface use... the regulatory framework in which the Forest Service needed to analyze those surface rights, and... to what extent the Forest Service could regulate activities upon Forest Service land in association with those surface rights.”
The decision states that the Hudbay project would impact 955 acres of land in Arizona, including 33 known Native American burial grounds at and around the site.
“We are extremely disappointed with the court’s decision. We strongly believe that the project conforms to federal laws and regulations that have been in place for decades,” said Peter Kukielski, Hudbay’s interim president and CEO in a news release.
“We will be appealing the decision as we evaluate next steps for the Rosemont project.”
Hudbay will be appealing the decision to the U.S Ninth Circuit Court of Appeals.
Final permits and mine plans were approved for the Rosemont project earlier this year. The Forest Service approved Hudbay’s mine plan March 21. Mining at the site received preliminary approval from the Forest Service in 2017. If built, Hudbay anticipates the mine’s planned value at around $2 billion over 30 months, with copper and other minerals to be extracted from the site at a rate of over 100,000 tonnes of copper concentrate a year over 20 years.
The Rosemont mine project has been described by Hudbay as “one of the world’s best undeveloped copper projects” and has been anticipated to include around 3,000 temporary construction jobs and 500 permanent jobs once built.
Hudbay stocks took a tumble following the announcement, dropping by more than 20 per cent August 1 after the announcement. Shares in Hudbay dropped from as high as $7.14 per share July 19 to around $4.70 August 6.