Land swap would boost huge Arizona copper mine

WASHINGTON - A plan to clear the way for North America's largest copper mine by swapping federal forest land for private acreage in Arizona has House Republicans at odds with the Obama administration.

GOP lawmakers and business groups, including the U.S. Chamber of Commerce and the National Mining Association, say the project would pump billions of dollars into the Arizona economy and help create nearly 4,000 mining-related jobs.

They are pushing a bill, up for a House vote Wednesday, that would approve the land exchange for the mining project 70 miles southeast of Phoenix. The legislation hasn't yet come up in the Democratic-controlled Senate, where it's expected to encounter greater resistance.

Under the plan, first proposed in 2005, a subsidiary of global mining giant Rio Tinto would gain access to more than 2,400 acres of federal forest land thought to contain vast resources of high-grade copper, potentially worth billions of dollars.

In exchange, about 5,300 acres of environmentally sensitive and recreational land throughout Arizona would be transferred to federal control, including 3,000 acres on the lower San Pedro River in southeastern Arizona and 940 acres to be added to the Appleton-Whittell Research Ranch southeast of Tucson. The land is controlled by Resolution Copper Co., a subsidiary of Rio Tinto, a London and Australia-based company that operates mines throughout the world.

The Obama administration is against approving the land swap, saying an environmental review should be completed before the exchange is made.

Doing the review after the swap is completed would leave the U.S. government with less control over the project and make it harder to propose alternatives that could limit environmental damage, said Mary Wagner, associate chief of the U.S. Forest Service.

The $6 billion mining project near Superior, Ariz., is believed to represent the third-largest undeveloped copper resource in the world and the largest in North America. The company says the project would create at least 1,400 jobs on site and more than 3,700 related jobs.

Rep. Paul Gosar, R-Ariz., the bill's sponsor, said there was no need for a full environmental review until after the swap is completed.

"It's just a land swap. It does not pre-empt anything," such as the Antiquities Act, the National Environmental Policy Act or other laws, he said.

Once the exchange is completed, "all the applicable laws follow," Gosar said.

Rep. Raul Grijalva, D-Ariz., said the environmental review should be conducted now, when the U.S. government has the most leverage over the project. Once land that now is part of the Tonto National Forest is turned over to private control, the government's ability to require changes and enforce the law "is really limited at best," he said.

Separately, Grijalva and other Democrats complained that under current law, the mining company will not have to pay any royalties to the U.S. government for lucrative mineral rights that could be worth tens of billions of dollars.

Grijalva called the mining proposal one of the most significant issues Congress has faced this year.

"A foreign-owned company doing business on U.S. public lands is basically getting a blank check on extraction (of copper) and a green light from Congress to go ahead and begin this without any return on the money," he said.

Jon Cherry, a vice president of Resolution Copper, said in a statement that he was optimistic the House will approve the land exchange. Over the life of the project, the mine could generate as much as $61 billion in economic benefit for Arizona "without the need for one dollar of federal stimulus," Cherry said.

Meanwhile, Rio Tinto PLC said Wednesday it plans to defend itself against claims that it aided the government of Papua New Guinea in genocide and war crimes in the late 1980s.

A U.S. federal appeals court on Tuesday allowed claims of racial discrimination and crimes against humanity to go forward. The San Francisco-based 9th U.S. Circuit Court of Appeals sent the case back to a lower court.

Bruce Richardson, a spokesman for Rio Tinto, said Wednesday that the company will "vigorously defend ourselves against these improper claims."

The lawsuit was filed by residents of the island of Bougainville, who accuse Rio Tinto PLC of aiding the government of Papua New Guinea. The decade-long civil war began after islanders sabotaged a copper mine they said was fouling the environment. Many people were killed in violent clashes with the Papua New Guinea military.

Landowners in a 2002 suit alleged that Rio Tinto encouraged the government to end the uprising with military force and claim the company provided helicopters and vehicles.