Published: April 1, 2024 |

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Every year, the Montana Supreme Court takes a few of its oral arguments on the road, bringing them to cities outside Helena. On Friday, they came to Missoula, for a case that centers on the language of state water law and what it means for mining operations.

An audience was on hand at the Montana Theatre on the University of Montana campus, where justices heard a challenge to the permitting process for the Black Butte Copper Project, a planned underground mine north of White Sulphur Springs.

Last month, the Supreme Court upheld the mine’s operating permit in a separate case. Environmental groups — including Montana Trout Unlimited, Montana Environmental Information Center, Earthworks, and American Rivers — argued state regulators hadn’t done enough analysis on the possible impacts of the mine, particularly how it might affect downstream water quality.

The same groups are also part of this lawsuit, which focused on water rights rather than quality. They say the mine’s operator, Tintina Montana, should have had to get an additional water permit.

The key issue is a state law that requires a permit when water is appropriated for a “beneficial use.”

Sandfire Resources is planning to pump groundwater out of the mine while work is going on. Some of the water will be used in the milling process, while the rest will go through a treatment plant before they return it to the groundwater system. In some parts of the year, the water will be stored.

Sandfire Resources received a permit through the Montana Department of Natural Resources and Conservation (DNRC) for the water they’re using for milling. However, DNRC determined that they did not need one for the rest of the water because simply removing water from a mine did not qualify as a beneficial use.

The environmental groups contested DNRC’s decision, saying it created a loophole that could allow mining companies to pump large amounts of groundwater without ensuring it wouldn’t have an impact on nearby streams and other water users. They said state law recognizes using water for mining purposes as a “use,” and it’s common sense to say diverting and storing water in this case qualifies. They argued Sandfire Resources underestimated the effects by going through the permit for only some of the water.

“They have to demonstrate that there will be no adverse effect to an existing rights holder. That burden belongs to them, not the state, not the existing rights holder. And so the moment for these requirements to be enforced is actually right now,” said Sean Helle, an attorney representing the groups.

Sandfire Resources’ attorneys said the company isn’t getting any benefit from the water itself, and it would actually be better for them if it wasn’t there. They said they’re moving the water out of the way, rather than putting it to use.

DNRC’s attorneys said they don’t see any authority under the law to require a permit when they determine it’s not a beneficial use.

“DNRC’s interpretation of the law has been characterized as a loophole. And I’d say it’s not a loophole, it’s actually the limit of the law,” said attorney Brian Bramblett.

State law prohibits “wasting” groundwater, and it includes a provision that removing water from a mine to allow mining operations does not count as waste.

Justices had a number of questions for both sides.

Justice Dirk Sandefur asked Helle why it was necessary for the court to step in at this time. He noted that the DNRC’s policy has been in place for decades and the Legislature could have done something to address it.

“If a situation that comes up in regulation falls outside of a definition, then it falls outside of the definition — but that’s not for this court to fix, that’s a legislative matter, is it not?” Justice Sandefur asked.

Helle said there were still inconsistencies that DNRC hasn’t addressed.

“In contested case decisions, in policy memorandums, they have never managed to square that position, that desired policy outcome, with the language of the statute, which requires permits for beneficial uses,” Helle said.

Justice Laurie McKinnon questioned John Tietz, an attorney representing Sandfire Resources, about how what they’re doing with the water could not be a “use” — even if they don’t make use of the water itself.

“To get to that substance you’re drilling, and during that process, the water is being produced and you have to get rid of that water — you’re using that water,” Justice McKinnon said.

“The question is whether we’re using the water,” said John Tietz, an attorney representing Sandfire Resources.

Tietz said there’s no case law indicating the dewatering of a mine alone counts as a beneficial use.

Chief Justice Mike McGrath wrapped up Friday’s hearing.

“This concludes the argument on this — what I think most of us would agree is an extremely interesting and important case. Thank you to all, counsel. We will take this matter under advisement and issue an opinion in due course,” Chief Justice McGrath said.

The court has also scheduled an oral argument at Montana State University for April 22.

Source: KTVQ

Sandfire Resources America acquires, explores for, and develops resource properties in the United States and Canada. The company explores for copper, cobalt, zinc, lead, and silver deposits. Its flagship property is the Black Butte copper project that consists of approximately 7,684 acres of fee-simple lands and 4,541 acres in 239 Federal unpatented lode-mining claims located in central Montana, the United States. The company was formerly known as Tintina Resources Inc. and changed its name to Sandfire Resources America Inc. in January 2018. The company was incorporated in 1998 and is headquartered in Vancouver, Canada.

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