Silver Creek Molybdenum Permitting

Mining is a highly regulated activity, particularly in Colorado. Following is a discussion of all mining and environmental permit requirements that may be applicable to a large scale mining project.

In Colorado, the Mined Land Reclamation Act provides the fundamental statutory framework for mine permitting. The MLRA is administered by the Mined Land Reclamation Board (MLRB) and the staff of the Division of Reclamation, Mining and Safety (DRMS). mining.state.co.us

The State of Colorado is commonly regarded within the mining community as having among the most rigorous mine environmental protection regulations in the world, and this has tended to deter investment in new projects.

In response to the Summitville mine incident of the early 1990s, in 1993 Senate Bill 247 passed unanimously out of the Colorado Legislature. More information about this history of this can be viewed here.

Major changes in the law included greatly expanding the authority of the State to oversee mine operating practices, instead of only reclamation at the end of mining. Additionally, the new law added the requirement for an Environmental Protection Plan for all mining operations that use or produce toxic or hazardous materials, or which could have the potential to generate acid mine drainage or contaminants in significant amounts.

The MLRB was also given the full authority to mandate compliance with updated environmental and reclamation requirements; extend permit application reviews and stakeholder participation in the permitting process; and enforce requirements for certification of environmental protection facilities. The law also significantly strengthened the State's bonding authority to require mining operations to provide a full financial warranty to ensure that the State has adequate funds available to meet the entire cost of implementing reclamation in case the operator becomes insolvent.

Additionally, the MLRB regulates groundwater protection in connection with mining operations, through authority delegated under SB 89-181.

The implementing regulations for mine permitting in Colorado are very thorough, and provide extensive opportunity for public notice, comment and appeals by stakeholders.

The rules provide a gradational approach from the exploration phase, which is regulated under the Prospecting section (Notice of Intent), up through Limited Impact mine permitting for small operations (Sec. 110 and 110D permits), through full scale mine permitting (Sec. 112 and 112D type permits).

As of January, 2010, Outlook received DRMS approval of its Notice of Intent to conduct Prospecting (exploration drilling) operations, following a rigorous 11-month technical review.

A link to the DRMS regulations which are applicable to any hardrock prospecting or mining project in Colorado can be viewed here.

In addition to the DRMS, other State and Federal agencies have a role in regulating mining operations.

The Federal government has delegated primacy under the Clean Air Act and Clean Water Act to the State of Colorado. The requirement for a state to receive this authority is that the state must have a program that is at least as stringent, or more so, than required by Federal law. The Environmental Protection Agency reviews the adequacy of state enforcement programs on an ongoing basis.

Any surface water discharge from a mining operation to State waters would be regulated by the Colorado Department of Public Health and Environment (CDPHE), through its Water Quality Control Division. As part of the process of issuance of a Colorado Discharge Permit System (CPDS) permit for any mining point source discharges, an applicant must make a very detailed technical submittal showing that the discharge can be accommodated within the limitations required to protect water quality in the receiving water for its designated use classifications as set by the Water Quality Control Commission. Once a permit is issued, frequent monitoring and data reporting is required, and penalties for violations are severe. A public notice and comment process is also a part of the permitting process.

The Water Quality Control Division also administers the Stormwater Permit program, to regulate non-point source discharges from various activities, including runoff from unreclaimed mine waste rock piles.

Emissions of air pollutants are regulated by the Air Pollution Control Division of CDPHE. Emissions above certain exemption thresholds must be reported via the Air Pollution Emissions Notice (APEN) process. For larger emission sources, operating permits are required. Applications for operating permits are subject to extensive public notice, review and comment.

The provisions of the National Environmental Policy Act (NEPA) are applicable to any Federal action which has the potential to "significantly affect" the environment. A review under NEPA is triggered whenever a Federal decision, action or approval is requested as part of a mining project. The level of review under NEPA can range from a determination that an activity falls under a Categorical Exclusion (CX), is unlikely to have a significant environmental impact subject to confirmation by an Environmental Assessment (EA), or needs full review as a potentially significant impact, through the comprehensive Environmental Impact Statement (EIS) process. Both the EA and EIS processes afford substantial opportunities for public notice and comment, and include referral to other agencies, such as the Fish and Wildlife service for review of Endangered Species Act issues, the Army Corps of Engineers for wetlands issues, etc.

The Environmental Protection Agency (EPA) and the President's Council on Environmental Quality (CEQ) oversee the NEPA Process. Section 309 of NEPA mandates the EPA to review certain proposed actions of other Federal agencies in accordance with NEPA and to make those reviews public. If the proposing agency (the "lead" agency) does not make sufficient revisions and EPA determines the project remains environmentally unsatisfactory, EPA may refer the matter to the President's Council on Environmental Quality for mediation and resolution. An overview of the NEPA process can be found at:

www.epa.gov/Compliance/basics/nepa.html

Other EPA authorities include administering the underground injection control (UIC) permit program. The UIC program is part of the Safe Drinking Water Act which was enacted to protect underground sources of drinking water. A UIC permit may be required for underground disposal of mine tailings.

The Mine Safety and Health Administration (MSHA) regulates mine safety through a comprehensive regulatory program.

The Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) regulates the storage and use of explosives, which are commonly used in hardrock mining.