Rosemont copper project could be delayed until 2023
The July 31 court ruling that halted construction of the Rosemont Copper project south of Tucson, AZ has pushed work on the copper project back to at least 2023, David Bryson, senior vice president and chief financial officer for Hudbay Minerals Inc., told investors.
Tucson.com reported on Bryson’s comments that were released in a transcript of a call with investors.
Hudbay Minerals plans to appeal the July 31 ruling that stopped the openpit mine but still expects a long delay.
“We are sort of assuming a restart of construction in 2023,” said Bryson. “We think that provides a reasonable allowance for the conclusion of litigation, as well as remobilization in order to sort of get back to a point where we could start construction.”
The Toronto-based company reported that construction delays for the mine in the Santa Rita Mountains forced it to swallow a $242 million impairment charge for Rosemont, reflecting a reduced value.
The impairment charge accounted for the bulk of the third quarter 2019 loss of $274.8 million that Hudbay reported. That compares to a net profit of $22.8 million in the third quarter of 2018.
The mine has been in legal limbo since U.S. District Judge James Soto halted work July 31. Soto’s ruling overturned the U.S. Forest Service’s June 2017 approval of the $1.9 billion mine project.
Soto ruled that the Forest Service had erroneously authorized Hudbay to deposit waste rock and mine tailings on 2,447 acres of forest land, without proof that Hudbay’s mining claims for the lands are valid.
During the investor call, Hudbay CEO Peter Kukielski noted that a recent, failed effort by the company to get Soto to reconsider his ruling was the first step in appealing it, “As we seek to correct the court’s misinterpretation of current mining laws and regulations that govern mining activities on public clients in the United States.
“Although the district court denied our motion, it was important to put these issues on the record prior to filing an appeal to the U.S. 9th Circuit Court of Appeals, which we anticipate could take approximately two years to conclude,” Kukielski said.
Hudbay remains “fully committed to Rosemont, as we believe it is a high-quality, high-return copper development project that both benefits stakeholders and complies with applicable laws,” Kukielski said.
“We believe Rosemont’s permits will ultimately be upheld on appeal as a district court’s unprecedented decision contradicts several decades of mining regulations in the U.S.,” he said.