Supreme Court hears arguments on water permits for copper mine near Smith River

Boaters on the Smith River in Meagher County (Photo by Montana Fish, Wildlife and Parks).

The Montana Supreme Court heard arguments Friday morning in Missoula on the second part of a challenge to permits granted by the state to a mining company that wants to build a copper mine near White Sulphur Springs in a water drainage above the renowned Smith River.

The two sides in the case say the justices’ decision will be important when it comes to future permitting for mines, how the Water Use Act is interpreted when it comes to water rights, and whether a 14-million-ton copper mine should be permitted in a closed basin where water rights have already been over-allocated.

The court already decided last month that a permit granted to Sandfire Resources, known as “Tintina,” related to its mining tailings and remediation plans for the Black Butte copper mine was handed out properly by the Montana Department of Environmental Quality.

The case the justices heard Friday involves a challenge by conservation groups to the mine’s water permits granted by the Department of Natural Resources and Conservation. The groups allege the department should have required further permits for more than half of the roughly 250 million gallons of ground water (807 acre-feet) the company plans to have to pull out of the mine while they extract the minerals.

The justices noted at the outset of Friday’s oral argument that the case involves a “question of first impression” that has never been decided in the Montana Supreme Court of what exactly constitutes a “beneficial use” of water and whether a 40-year interpretation of the Water Use Act by the DNRC that says pulling water out of a mine, or “dewatering,” is or is not a beneficial use of water under the law.

The plaintiffs in the case — Montana Trout Unlimited, Trout Unlimited, the Montana Environmental Information Center, EarthWorks and American Rivers — have for years challenged the original application from the company for the mine.

In its original application, the mine said it didn’t need a permit for roughly 457 acre-feet because that water is just going back into the ground and not benefiting the company. The company did get a permit for 350 acre-feet it plans to use for “industrial” purposes. But the conservation groups said the mine should need permits for both, as all of the water will be needed to fulfill the goals of the project.

But a DNRC hearing officer sided with the agency, saying there are uses of water that rise neither to the level of beneficial use nor the other category defined in state law: “waste.” Wasting water is prohibited in Montana.

Rather, they argued, the “dewatering” use of water in mining fell under a third category outside of the Water Use Act’s regulations.

After the plaintiffs appealed to a district court, that court also upheld the hearing’s officer’s decision last April, leading to the appeal to the Supreme Court.

At Friday’s argument, Earthjustice attorney Sean Helle, representing the conservation groups, called on the court to overturn the granting of the permit and to make a finding against the DNRC’s longstanding interpretation of the Water Use Act and “dewatering” in mines.

He told the court that its established law shows the Water Use Act is intended to protect senior water rights holders and that what he called the DNRC’s “loophole,” which would allow Tintina to skirt a permit for the other 457 acre-feet of ground water it says will not be put to “beneficial use,” obviously violates the Water Use Act.

Helle told the justices that since that water the company does not plan to use for things like dust suppression, equipment washing and ice abatement will still be used in the efforts to mine the minerals, and will be stored for up to months at a time during the summer, it will have a beneficial use for the company.

That is because the company will profit off the mine, and its use means a negative benefit to other water rights holders who might see less water in Sheep Creek, Black Butte Creek, and then downstream into the Smith River, before the water is pumped back into the ground, he said.

Justice James Jeremiah Shea wondered what the “use” of the 457 acre-feet would be if it was not considered beneficial use nor waste, to which Helle said he was posing that same question. Justice Dirk Sandefur contended that the “impoundment” of the water for months at a time is being done to comply with Department of Environmental Quality water quality standards, which constituted a benefit.

“Tintina does, in fact, intend and desire to pump every gallon of water it will have to pump at the Black Butte mine because that pumping is essential to its mining operation, and its mining operation will definitely benefit Tintina in significant ways,” Helle said. “So, the narrative in this case that Tintina is somehow pumping and impounding water that it just doesn’t want to pump and impound is fundamentally false. This is essential to Tintina’s underground mining operation.”

Mining is considered a beneficial use of water under Montana law, and the conservation groups are arguing that the mining project could not move forward without the 457 acre-feet of water for which the DNRC did not require a permit. Otherwise, Helle said, that would constitute waste, defined in the statute in part as “the application of water to anything but a beneficial use.”

Tintina had to acquire junior water rights to mitigate the 350 acre-feet it will use under the permit, but the conservation groups argue that there will certainly be parts of the 457 acre-feet lost through evaporation or leaks during the pumping process that would constitute waste.

When Sandefur asked Helle why this was not a premature argument, Helle said that senior water rights holders should not have to come back to the court afterward if indeed the extra water allocated to the mine never replenishes the groundwater, creeks or river to the extent the water existed beforehand.

“They (the company) have to demonstrate that there will be no adverse effects with existing rights, but that burden belongs to them — not the state, not the existing rights holder,” Helle said.

John Tietz, an attorney for Tintina, offered the court an analogy for why the company believes the 457 acre-feet should not be considered a beneficial use.

“If I take my cell phone our of my pocket and I put it in the other pocket, I can’t be saying that I used my cell phone,” he said. “That’s essentially what we’re talking about here is relocation of water, and there is no use.”

Regarding the alleged “loophole” in statute for permitting water use for mines, Tietz said he believed the legislature specifically wrote the law that way because draining water and other “manipulations” could not be a beneficial use. He said if the mine could, it would not go through the DEQ treatment process and would simply return the water straight back into the ground.

Brian Bramblett, an attorney for the DNRC, also told the court that draining water did not meet the threshold for beneficial use. When asked several questions by Justice Beth Baker about what will happen for senior water rights holders if indeed the water in the creeks and rivers nearby are depleted, he said they can sue to challenge whether the water was wasted or used unlawfully.

The plaintiffs had also argued that under the state Constitution, water belongs to the people of Montana. Bramblett told the justices that was correct, but the Constitution said the legislature should provide definitions of what beneficial use means, and already did so.

“I say it’s not a loophole; it’s actually a limit of the law,” he told the court.

After a little more than an hour of oral arguments, the justices took the case under advisement and will issue orders in the months ahead.

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