Seventh Judicial District Judge Dan Papez ruled last week that the Nevada State Engineer's office had substantial evidence on its side when it issued its decision in support of the Mt. Hope Project's water rights applications. In doing so, he struck down numerous petitions for judicial review from Eureka County commissioners and a handful of area irrigators.
General Moly CEO Bruce Hansen said in a statement that he's "extremely pleased" the court upheld the state's thorough and inclusive permitting process.
"Obtaining water rights for the Mt. Hope Project has been a long process and I am eager to move beyond the protests and appeals of the past three years toward a more positive and engaged process with the County of Eureka and its citizens," Hansen said.
Meanwhile, Eureka County Commissioner Jim Ithurralde said his board plans to meet with its attorney this week to discuss the ruling, and has no comment at this time.
The June 13 ruling marked the second time in several years that the Ely judge weighed in on the matter. But this time around, the outcome was much more favorable to Mt. Hope Project developer General Moly and its subsidiaries, which are hoping to become one of the nation's biggest producers of steel-strengthening molybdenum.
The state engineer's office initially gave the developer the right to pump 3.68 billion gallons of groundwater from Kobeh Valley 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 from agricultural to mining and milling purposes.
But under appeal, Judge Papez found that the state engineer violated the appellants' due process rights by failing to give them updated water models of the project.
Nevada State Engineer Jason King responded by issuing a second order in support of the company's applications, leading to another legal challenge by county officials and several agricultural operators.
Eureka County water attorney Karen Peterson maintained that King's ruling left it up to senior irrigators to change their existing sources of water, when it should be the junior applicant's responsibility to do so.
To cite just one example, Peterson told the judge in April that the mine's plans would desiccate flows from tiny Mud Spring. In doing so, she argued that King's decision would impact an appellant who first applied for the spring's water rights in 1948.
But Papez concluded that state law does not prevent King's office from granting applications that may affect existing rights, as long as those rights can be protected through mitigation. And in this case, the judge found that King has taken ample precautions to safeguard senior water users in the central Nevada basin.
Just last week, for instance, King's office signed off on a final "3M Plan," which requires Mt. Hope's developer to monitor, manage and mitigate any impacts that might occur as a result of the mine's groundwater pumping activity.
Conversely, the judge determined that Eureka County's interpretation of the law would essentially prevent the state engineer from allowing future groundwater development of any basin in the entire state.
"Under Eureka County's interpretation that an impact is necessarily a conflict, no new applications could be approved even if the resulting impacts to existing rights could be fully mitigated so that existing users would receive the full measure of their water rights," Papez ruled. "The Court concludes that Eureka County's statutory interpretation (of the law) would create a near impossibility for the further development of any new groundwater in the State of Nevada contrary to legislative intent and public policy."
The judge was also persuaded by expert testimony that the mine's pumping plans would not adversely impact groundwater levels in the adjacent Diamond Valley aquifer. For that reason, he dismissed the petitioners' claims that it would it affect existing users who depend on Diamond Valley's already-overappropriated groundwater resources.
According to the state engineer's office, just under 43.34 billion gallons of water rights have been committed to date, and almost 24.44 billion gallons are pumped on average each year. Yet the estimated perennial yield in Diamond Valley is just 9.77 billion gallons.
However, Papez noted that groundwater levels in Kobeh Valley are roughly 100 feet higher than they are in the Diamond Valley basin, and have not dropped as a result of extensive agricultural pumping near Eureka.
In addition, he was swayed by testimony regarding a natural groundwater barrier between the two basins. Several U.S. Geological Survey reports, which conclude that flows between the aquifers are minimal, back up those assumptions, he wrote.
In another key finding, the judge determined that the mine's groundwater development plans would not affect future growth in the sparsely developed Kobeh Valley, which straddles the Eureka and Lander County lines around U.S. 50.
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