Elko Daily Free Press 4-28-10

Eureka County wins water rights appeal

ELKO — Eureka County has won its appeal in district court against the Nevada state engineer over the state’s approval of water rights for General Moly’s proposed Mt. Hope molybdenum mine.

Seventh District Judge Dan Papez ruled the county and the Diamond Valley farmers that also appealed didn’t receive a full and fair hearing on General Moly’s water rights applications.

The judge found that then-State Engineer Tracy Taylor relied upon an updated version of General Moly’s hydrology model that the petitioners didn’t receive.

The court remanded the water rights case back to State Engineer Jason King. Susan Joseph-Taylor, chief of the state engineer’s hearing section, said Monday the next step will be to set up a status conference for all the parties.

“I know the state engineer feels obligated to move fairly quickly,” she said.

Related news stories/websites.

Joseph-Taylor said the only issue in the court ruling was over the updated hydrology model, so “we’re not starting at ground zero. We had a hearing on everything else.”

She said her office will provide public notice when the status conference is scheduled.

General Moly executives were disappointed in the ruling, but the company stated in an announcement Monday it shouldn’t impact the U.S. Bureau of Land Management’s work on a draft environmental impact statement on the project nor should it impact the project’s timing. The company is hoping the EIS will be released mid-year.

“This procedural flaw is disappointing given the strong legal and technical findings by the state engineer to determine that the company’s water applications should be granted for the Mt. Hope Project,” said Lakewood, Colo.-based General Moly Chief Executive Officer Bruce Hansen.

“The updated model referenced in the state engineer’s decision had substantially the same conclusions as the model the petitioners had reviewed. With our final hydrology models being completed this week, all parties involved will now be reviewing a single, final model, so this procedural issue can be avoided moving forward,” he said.

“We are clearly disappointed that the state engineer’s original ruling was not upheld,” said Tim Arnold, general manager of the Mt. Hope Project. “We will continue to work with the commissioners of Eureka County and the farmers in Diamond Valley to find a solution to their opposition to our water applications.

“Our scientific studies continue to indicate that our water pumping in Kobeh Valley, 15 miles to the west of Diamond Valley, will have virtually no impact to their water table, and we will continue to engage and educate all stakeholders on that issue,” Arnold said.

He also said the company will continue to develop a comprehensive long-term water monitoring and mitigation plan.

The producers in Diamond Valley, who appealed Taylor’s decision to issue permits for annual consumptive use of 11,300 acre feet of water, included the Eureka Producers Cooperative, alfalfa grower Tim Halpin and Cedar Ranches.

General Moly was an intervenor in the appeal against the state engineer.

Eureka County Commission Chairman Leonard Fiorenzi said Monday he had no comment on the court’s Friday ruling, which followed a January hearing in Eureka. Eureka County District Attorney Ted Beutel was out of town Monday.

Commissioner Jim Ithurralde said in January that one reason for the appeal was to be sure everything was done right because of the volume of water General Moly would be using to process molybdenum.

The judge issued his ruling Friday.

Arnold said General Moly has overwhelming support from the citizens of Eureka County, who are anxious to see the mine developed to create new jobs and a new source of tax revenue.

The company expects to create 400 permanent jobs when Mt. Hope is completed, and hundreds of jobs for contractors in the construction stages of the long-life mine. Plans call for a 44-year mine that would produce 40 million pounds of molybdenum per year in the first five years and lower amounts later.