BATTLE MOUNTAIN - Eureka County is taking its concerns about a proposed mine's water usage all the way to the Nevada Supreme Court.
The county's commissioners voted unanimously on July 10 to appeal a judge's ruling that upheld the Mt. Hope Project's water rights in central Nevada's Kobeh Valley.
The Nevada State Engineer's Office previously gave the mine's developer the right to pump 3.68 billion gallons of groundwater from the basin per year, compared to the aquifer's estimated perennial yield of about 5.21 billion gallons. It also allowed the company to change the designated use of that water for mining and milling purposes.
Eureka County and a handful of area irrigators took their initial appeals of the state's decision to Seventh Judicial District Judge Dan Papez.
But on June 13, the Ely judge struck down the appellants' petitions for judicial review. Among other things, Papez found that the county's interpretation of the law would essentially prevent the state engineer from allowing future groundwater development of any basin in the entire state.
The county says it believes that if the judge's ruling is allowed to stand as is, it will change the way Nevada's water law is interpreted - perhaps to the detriment of those who hold senior water rights.
"We've always said we want the Mt. Hope project done right," Eureka County Commissioner Jim Ithurralde said in a statement. "We believe that identified impacts to existing senior vested water rights holders must be avoided."
The county says its appeal would not block the Mt. Hope Project's plans to use groundwater from the Kobeh Valley basin. But it's hoping that a mandatory supreme court settlement conference will allow county officials to further discuss their concerns with the Nevada State Engineer's Office and the project's developer.
The county's water attorney previously argued that the state engineer's decision leaves it up to senior irrigators to change their existing sources of water, when it should be the junior applicant's responsibility to do so.
However, Judge Papez concluded that state law doesn't prevent the state engineer from granting applications that may affect existing water rights, as long as those rights can be protected through mitigation. And in this case, the judge found that the state has taken ample precautions to safeguard senior water users in the central Nevada basin.
Zach Spencer, an external communications manager with project developer General Moly, reiterated that the mine will be required to monitor, manage and mitigate any impacts that might occur as a result of its groundwater pumping activity.
In the event that impacts do occur, General Moly and its subsidiaries may have to truck in water, or install solar-powered groundwater pumps on an affected user's property.
"A solar-powered pump will be more reliable than what exists in Kobeh Valley, if it's needed (to offset any impacts)," he said.
Ultimately, Spencer believes that the supreme court will uphold the lower court's ruling.
"Right now, it's our view that the appeal is without merit, and we are extremely confident that the Nevada Supreme Court will affirm the ruling from the district court," Spencer said.
As it waits for the next phase of the water rights dispute to begin, General Moly is moving forward with the project, which could become one of the country's biggest primary producers of steel-strengthening molybdenum.
It's currently working with a contractor and the U.S. Bureau of Land Management's (BLM's) Battle Mountain office to complete a final Environmental Impact Statement.
Spencer anticipates that the BLM could sign off on a Record of Decision later this year.
That permitting milestone will enable the company to lock up the remainder of project financing, and then break ground on the mine itself.
At the peak of construction activities, about 600 people could be working at the mine site 23 miles north of Eureka. Once the 18- to 20-month construction period wraps up, the full-time workforce will wind down to around 400 people.
In the first five years of operations, the mine plans to produce 40 million pounds of steel-strengthening molybdenum annually.
To help finance the $1.2 billion project, the company has pre-sold 100 percent of the molybdenum it will produce during the first five years of operations. It has also formed key partnerships with some of the world's largest steel companies, including POSCO, which has a 20 percent interest in the project.
During the course of Mt. Hope's life, the project is expected to generate $700 million in state and local taxes, along with an estimated $2 billion or so in federal tax revenues.
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