On March 17, a U.S. district court rejected a challenge to the Department of the Interior’s (DOI) reinstatement of Twin Metals’ two hard rock mineral leases in northeastern Minnesota. The court agreed that the DOI has authority to reinstate the leases and that the leases provided Twin Metals a non-discretionary right to a third renewal.
The leases were officially renewed in May 2019. Twin Metals said the decision “validates our position that these mineral leases that have been held by Twin Metals Minnesota and its predecessor companies for more than 50 years and should have been renewed in 2016.”
This ruling came after an appeal from environmental groups that sought to overturn the President Donald Trump Administration’s DOI decision in 2017 to reinstate two leases to mine on 5,000 acres of Superior National Forest land in northeastern Minnesota. That decision had previously reversed an agency decision to cancel the leases by the former President Barack Obama administration in 2016.
“We’re very gratified that this decision — a summary judgment — validates our contention that the decision to cancel leases held in good standing for more than 50 years was arbitrary and wrong,” CEO Kelly Osborne said. “Companies must be able to trust the regulatory process in order to risk the enormous capital required to extract metals such as copper, nickel, cobalt and platinum group metals that are vital to creation of the green economy our world so desperately needs.”
The two leases were issued in 1966 to a Twin Metals predecessor company and renewed twice, in 1989 and again in 2004. When Twin Metals applied for a third renewal in 2012, the DOI said no in 2016, based on objections from the U.S. Forest Service. In May 2017, the DOI’s top legal official, Daniel Jorjani, ruled that the earlier lease cancellation was erroneous on grounds that Forest Service approval was not a condition of the lease renewal and that the leases’ renewal was required under the terms they were granted. The DOI reinstated the leases, which were formally renewed in May 2019.
Plaintiffs called the DOI decision, the Jorjani opinion, “arbitrary and capricious,” but Judge Trevor McFadden disagreed in his decision.
He said the department has “inherent authority to timely reconsider its prior decisions and reasonably did so here.”
Another decision dealt with whether or not Twin Metals had lost its “non-discretionary” or inherent right to a third renewal because production hadn’t started in the first 20 years of the lease. Judge McFadden agreed with Twin Metals and the government, that the leases gave Twin Metals the right to the third renewal.
McFadden said, “Interior timely corrected an error that would have deprived Twin Metals of its right to valuable leases. Its analysis explaining the need to correct this error was thorough, thoughtful and reasonable — a far cry from ‘arbitrary and capricious.’”