Takeover of Augusta would heighten concern over Rosemont’s promises – by Tony Davis (Arizona Daily Star – March 16, 2014)


If Hudbay Minerals Inc. takes over Augusta Resource Corp., it will inherit far more than a massive copper mine site outside Tucson, a potential for huge production and profits, and an equally massive controversy.

It will face a truckload of legal obligations and commitments to mitigate and compensate for the mine’s environmental impacts. It will also face questions and concerns from the community about how real those commitments are — questions that don’t always have simple answers.

Over the past seven years, Rosemont Copper and its Canadian parent Augusta have promised verbally and in writing to carry out dozens if not hundreds of mitigation measures for the planned Rosemont Mine in the Santa Rita Mountains. Those commitments have mushroomed in number and scale as the mine has inched closer to final federal permitting decisions, which Augusta expects by June but which Hudbay has predicted will take much longer.

Toronto-based Hudbay is nearing the final stages of its Augusta takeover effort. On Friday, it extended the deadline for Augusta shareholders from Wednesday to April 2 to decide whether to accept the takeover bid. Augusta’s board of directors has recommended rejecting what it calls Hudbay’s “grossly inadequate” and “opportunistic” offer and says it’s already negotiating with other potential suitors.

If either Hudbay or another company buy Augusta, will Rosemont Copper’s promise to pay for a 7-mile-long Central Arizona Project pipeline hold up? Among other examples, what about its plan to use dry-stack mine tailings, which use less water than traditional tailings; or its agreement with residents to compensate them if their wells go dry from mine pumping?

Hudbay has promised in emails to the Star and to the Sahuarita Sun to continue Rosemont’s commitments.

The U.S. Forest Service says it will have a staff hired at company expense to make sure that 100-plus pages worth of mitigation measures it required of Rosemont Copper are carried out on the ground, regardless of who owns it.

One Forest Service staffer would work full-time coordinating the monitoring and enforcement of the requirements. A monitoring team representing other federal agencies will evaluate whether the mine’s impacts live up to what was predicted by the final Rosemont environmental impact statement, said Coronado National Forest Supervisor Jim Upchurch.

The Forest Service, the Arizona Game and Fish Department, the Arizona Department of Environmental Quality and the town of Sahuarita also have various kinds of “successor clauses” in permits and agreements involving the mine, aiming to bind future companies to measures imposed on Augusta and Rosemont Copper. Such clauses are in general legally binding and enforceable in court by the agencies, although it may not be easy for average citizens to take such cases to court if they’re not parties to the agreements, says William Sjostrom, a University of Arizona law professor who specializes in contract law and the field of mergers and acquisitions.

“Measures that are a condition of permits are requirements of the project and would not be affected by a change in ownership,” Hudbay spokesman Scott Brubacher wrote in a recent email to the Star. “We value the relationships we have with the people who live around our mines, we engage and we listen. Hudbay wants to play its part in strong, sustainable communities. Should the Rosemont project advance under Hudbay, that is what can be expected from us.”

For the rest of this article, click here: http://azstarnet.com/takeover-of-augusta-would-heighten-concern-over-rosemont-s-promises/article_c83d9b01-4896-5387-9b5a-bcb58aeb8013.html

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