MAC: Mines and Communities

How may the law be served, if justice is denied?

Published by MAC on 2010-09-27
Source: Headwater News (2010-09-21)

London Calling turns an Eagle eye on Rio Tinto

Is Rio Tinto breaking the law or not?

That's a question posed earlier this month by one of the MAC website's North American editors, Gabriel Caplett (see the article below).

But - even if the company isn't violating a Michigan state mining act and even the current argument is over a relatively minor issue (the laying of a power line to serve its Eagle mine project) - the controversy should give us pause to reflect.

For the world's third most important corporate miner has a long history of showing arrogance, if not contempt, towards legal agents and their institutions.

While this may not be directed at the judiciary per se, it's an attitude often displayed to those who attempt to use the regulations to forestall the corporation's headlong rush into their communities.

This type of "violation creep" recently reached an apogee in India. Here, Rio's fellow London-listed miner, Vedanta, set about a six fold expansion of its Lanjiargh alumina refinery, saying it didn't need a permit to do so since the matter had been dealt with in a pre-existing EIA. See: The Nyamgiri struggle may be over

Of course Vedanta isn't Rio Tinto, and heaven forefend that Anil Agarwal's quasi-criminal enterprise will ever be as diversified and powerful as its bigger brother.

Nonetheless, it's likely that the Vedanta chairman has been picking up lessons by observing the "master" in action.

(Brilliant, wasn't it - the way the UK company's board managed to wriggle scot-free from China's verdict that some of its top executives had accepted massive bribes in 2009? See: Bargaining in Beijing.)

How may "the law" be served, if justice is finally denied?

So far, Rio Tinto hasn't been called to account for its contentious activities in Michigan, though the connection of a power link isn't the only misdemeanor of which it's been accused. See: Camp to protect Eagle Rock from Kennecott is destroyed

But the UK miner did turn up in a US court last week. It is seeking to throw out the longstanding claim by Bougainville landowners that its subsidiary, CRA, was complicit in the commission of grievous human rights abuses on the island.

The company maintains  the case should be heard (if at all) in Papua New Guinea, and that US Alien Tort law doesn't apply because it's not really a US enterprise. See: Rio Tinto asks US appeals court to dismiss Papua New Guinea human rights lawsuit

Rio's stance reminds us compellingly of the tactics it adopted during the 1990's, to prevent a former mineworker, Edward Connelly, being compensated for a fatal cancer, allegedly contracted while working under perilous conditions at the Rossing uranium mine in Namibia some fifteen years before.

First,  Rio tried arguing that it wasn't responsible for decisions made by its subsidiary, Rossing Uranium, and the case should instead be heard in the newly-independent African state.

When that argument failed, Rio Tinto dragged the whole affair through to the House of Lords, the UK's "supreme court" - which declared in Mr Connelly's favour.

However, by then, thanks to Rio's lawyers interminably spinning-out the proceedings, the case was  ruled "time expired". See:

http://www.law.monash.edu.au/castancentre/events/2003/meeranpaper.html 

So, the jury is currently out in California.

And it's not even being allowed in, so far as the good folk of Michigan are concerned.

Some of them must now feel that Rio Tinto has virtually set up camp within the state's department of natural resources.

Let the last word on this remain, for the present, with Gabriel Caplett:

"Rio Tinto continues to push Michigan law as far as it can with its Eagle Mine plan and  Michigan regulators are ill-equipped to handle the company's machinations, as evidenced by strong disagreements between [them] within the same agency and a stark difference in how state law was interpreted in 2008 versus today".

[London Calling is written by Nostromo Research. The opinioins expressed in this column do not necessarily reflect those of anyone else, including the editors of the MAC website. Reproduction is welcomed, provided full acknowledgment is given to Nostromo Research and to sources quote].

Michigan Regulators Unsure How To Enforce Changes to Rio Tinto's Eagle Mine

By Gabriel Caplett

Headwater News

21 September 2010

Marquette, MI - Since earlier this month Rio Tinto has been burying electric lines underneath County Road AAA in northern Marquette County. The underground lines will connect the company's Eagle Mine with new power lines running on County Road 550, leading to a coal-fired power station in Marquette.

According to regulators at the Department of Natural Resources and Environment (DNRE), connecting the electric line to the mine site would be illegal. Or, it isn't. It really depends who you talk with.

While Rio Tinto stretches the boundaries of Michigan's new nonferrous mining law in the construction of its Eagle Mine, state regulators seem unsure how to apply the law, and the law's interpretation seems to change from day to day.

In July 2008 Department of Environmental Quality (now part of the DNRE) Deputy Director Jim Sygo wrote that Rio Tinto "would have to apply for an amendment to its Part 632 mining permit before beginning activities to extend electrical service from CR 550 to the Eagle Project mine site."

Curiously, three months later Sygo wrote Rio Tinto's project manager, Jon Cherry, that the company could, in fact, extend power all the way to the mine site in order to power a "core shed building" used for mining exploration and not have to apply for an amendment.

This month Hal Fitch, head of the DNRE's Office of Geological Survey, echoed Sygo, claiming that Rio Tinto is simply running the power to the huge core shed, and because the shed "is not a mining operation" Rio Tinto doesn't need to follow the provisions of current mining law.

"If they do anything different from what is in their permit, then that's going to require a permit amendment," said Fitch. "It's a different purpose. [The] core storage facility is part of mineral exploration, not part of a mining activity. It's not associated with mining."

State geologist Joe Maki, coordinator for the review of Rio Tinto's mining application, disagrees.

"Obviously, that core shed is within the mining area," said Maki. "At some point in time, unless they take it down, it's going to have to become amended as part of the mining area."

According to Maki, running power to the core shed from County Road AAA "would be a violation."

"The latest we've told them was that once you try to extend power onto the mine site, to the mining area, before you do that you must have an amendment," said Maki.

"That fence line defines the mining area," Maki said. "It's clear that that is smack dab in the middle of it."

According to Maki, the DNRE's lawyer is crafting a formal position on the electrical issue and will send a letter to groups suing over approval of the mining application within the next two weeks.

Under Michigan's nonferrous mining law - popularly known as "Part 632" - "construction of utilities or extension of existing utilities" is considered to be "mining activity." Rio Tinto's mining plan, approved by the DEQ in 2007, included plans to power the mine with large diesel generators. Very soon after, the company decided to power the mine from an electrical source. In order to make that change Rio Tinto legally must file for an amendment with the DNRE. If the DNRE decides the change isn't "significant," the company can go ahead without further review and public hearings.

After two years of construction on the electrical extension, the company has yet to file for such an amendment.

Work began on a 22-mile power line going from Marquette to the small town of Big Bay in 2008. Underground work this year will connect that line to the mine site roughly 13 miles from Big Bay. The line can carry a more than 6-megawatt load, enough to power Rio Tinto's mining operation.

Although Rio Tinto paid for the entire $6.4 million cost, the company is hesitant to admit the power is for the mine. In an interview with a local newspaper, company spokesperson Matt Johnson said, "At this time, we're considering our power generation options at the mine site."

Joe Maki views it differently: "It's obvious; they're running power up there to run their mine."

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