A rally of uranium mining protestors and water rights defenders marked the opening of historic hearings on Powertech’s first water permit applications in South Dakota for in-situ leach mining. Photo by/Dahl McLean
Oglala Sioux Tribe intervenes in water dispute
By Talli Nauman
Native Sun News
Health & Environment Editor PART I | PART II | PART III | PART IV | PART V RAPID CITY – Vancouver, Canada-based Powertech Uranium Corp. accepted a $400,000 cash injection from its investment partner Azarga Resources Ltd. to shore up its finances in the week prior to Oct. 28 hearings on its three contested bids for South Dakota water rights permits to facilitate proposed in-situ mining. The Oglala Sioux Tribe is intervening in the hearings to oppose the uranium project slated for the southern Black Hills. Permits could result in the first in-situ leach (ISL) uranium mining and yellow-cake milling for both Powertech and South Dakota. The state Department of Natural Resources (DENR) Water Management Board convoked the hearings Oct. 28-Nov. 1 to decide whether to grant the company’s wholly-owned subsidiary Powertech (USA) Inc. rights to 8,500 gallons per minute of the Inyan Kara Aquifer and 551 gallons per minute of the Madison Aquifer. During the five days of open hearings, the board also had to weigh arguments regarding the company’s application to discharge the mine wastewater on the ground in the proposed Dewey-Burdock Project in Custer and Fall River counties, adjacent to the Pine Ridge Indian Reservation. Azarga’s spending helped enable Powertech to proceed with the permitting process by providing $400,000 of loan money, in a deal closed Oct. 22. Powertech has been running through about $350,000 a month as it undergoes the permit processes on both the state level and the federal track, where two Lakota non-profit groups are among parties intervening alongside the Oglala Sioux Tribe before the Nuclear Regulatory Commission (NRC). The corporate transaction gives the Hong Kong-headquartered Azarga some 22 percent of all Powertech's shares, a move that traders anticipated when Azarga acquired its first 17 percent of Powertech in July with an injection of $500,000. The latest exchange also lays the groundwork for Azarga to assume some 40 percent of all Powertech shares within a period of two or three months, pursuant to providing loan money for a total of $3.6 million, including the Oct. 22 payment. Powertech has been seeking ISL permits for Dewey-Burdock since 2006, and repeatedly delaying its planned start dates. After the DENR twice rejected Powertech’s underground wastewater injection permit, the company’s lobbyists convinced state legislators to repeal South Dakota oversight on that, leaving it in the hands of the EPA. The federal environmental impact statement process in the EPA jurisdiction is stalled over government-to-government consultations between Washington and tribes, at least seven of which claim with an interest in cultural and historic preservation in the treaty territory that underlies the proposed project area. In preparation for state hearings, Oglala Sioux Tribe attorneys from the Gonzalez Law Firm shared with the Water Management Board a letter from former Tribal President John Yellow Bird Steele expressing to EPA the tribe’s “deep dismay with, and strong objection to” the NRC’s handling of the cultural resources survey necessary to approve Powertech’s environmental impact statement. The survey remains to be carried out to tribal satisfaction. The state Water Management Board admitted the tribe’s list of official witnesses: Tribal President Bryan Brewer, Vice President Tom Poor Bear, Secretary Rhonda Two Eagle, Land Office Director Denise Mesteth, Tribal Historic Preservation Officer Wilmer Mesteth, and Oglala Lakota College Science Department Director Hannan LaGarry, as well as Natural & Cultural Resources Department representatives Roberta Joyce Whiting, Dennis Yellow Thunder and Richard Iron Cloud. The ISL process would entail building numerous wells to inject solutions to dissolve uranium in the Inyan Kara Aquifer, pumping them to the surface, processing them into yellow cake for storage and shipment, purifying the water, and spreading most of it on the surface or returning it underground, then disposing of remaining hazardous waste off-site. Powertech’s staff would prefer to dispose of mine wastewater via deep well injection, now under EPA jurisdiction, but seeks state acquiescence to land disposal, in case the aquifer injection scheme doesn’t pan out, the company states in its groundwater discharge permit application to DENR. The Dewey Burdock Project is envisioned to last 20 years at a location 13 miles northwest of the town of Edgemont, in an area of about 10,580 acres owned largely by private parties and partly by the public through the U.S. Bureau of Land Management (BLM). The area was first mined for uranium in the 1950s and has been explored further since then, leaving hundreds of well-heads and unreclaimed mining sites. “The proposed mining activity may adversely impact the valuable land and water resources of the Oglala Sioux Tribe,” Land Officer Mesteth said in a sworn affidavit submitted to the Water Management Board. “If the project were to be halted, or the project be made subject to the strictest environmental controls, the interests of the Oglala Sioux Tribe would be protected,” she said. Powertech, in its state applications for water rights and discharge permits, affirms that state and federal concessions yet to be granted to the company will assure it upholds its responsibilities for water protection. “As required by the NRC license, various DENR permits and EPA Class III and V Underground Injection Control permits, Powertech (USA) will be required to post financial assurance for all aspects of the Dewey-Burdock Project,” it states. “This will ensure that resources will be available for decommissioning and reclamation such that the site will be released for unrestricted use,” it adds. “The amount of the financial assurance will include an amount sufficient to plug and abandon all wells constructed under this appropriation when these wells are no longer needed for the intended beneficial use.” In answer to non-profit Dakota Rural Action Staff Organizer Sabrina King’s pre-hearing deposition request for Powertech’s estimated total cost of reclamation, the company submitted a preliminary estimate of $27.1 million. Lack of confidence in the corporation’s ability to raise the money prompted a hearing interrogatory by Clean Water Alliance founder Lilias Jarding, requesting Powertech to identify “expected sources of investment into the costs of financing proposed Dewey-Burdock mining, milling, and reclamation operation.” Also on behalf of the Rapid City-based grassroots organization, Jarding required the Canadian corporation to define its relationships with the Russian government’s nuclear power company and with its European investors from Synatom, a wholly owned subsidiary of the French GDF Suez, which is the second largest private water services provider in the world. The Water Management Board’s seven members have to consider Powertech’s statement to them that: “The financial assurance will include an amount sufficient to plug and abandon all wells constructed under this [water permit] appropriation when these wells are no longer needed for the intended beneficial use.” In the application process, Powertech argued: “South Dakota Codified Law 46-1-6(3) defines beneficial use as “any use of water within or outside the state, that is reasonable and useful and beneficial to the appropriator, and at the same time is consistent with the interests of the public of this state in the best utilization of water supplies.” The DENR staff review of the applications resulted in a comment to the state’s chief engineer to the effect that: “The Water Management Board has not yet considered if in-situ recovery is a beneficial use of water.” The former chief engineer, Garland Erbele, deemed the proposed water use beneficial in recommending approval of the Inyan Kara water rights application. In addition, the NRC staff recommendation to approve the Draft Supplemental Environmental Impact Statement for Dewey-Burdock is based on the conclusion “that the overall benefits of the proposed action outweigh the environmental disadvantages and costs.” The Powertech NRC license application, made in 2009, describes the project benefits as including the potential to create approximately 250 new jobs during construction and some 150 new jobs during operation. While, the company’s employment estimates have varied over time, it calculates that the project would generate some $35 million in state and local tax revenue and approximately $187 million in value-added benefits over the life of the project. Nonetheless, its economic impact is deemed “small” in the Draft Supplemental Environmental Impact Statement and Custer resident Penny Knuckles provided DENR Minerals and Environment Board members -- in large-scale mine permit hearings for the same project -- with a comparison to the value of industries she considered would suffer if uranium mining proceeds: “Tourism and agriculture have been sustainable, long-term economic drivers for the Black Hills long after mining ventures pull out,” she said. “South Dakota boasts the second-lowest unemployment rate, 3.8 percent, in the nation. The number of jobs added by the mine, about 86, would be negligible compared to the 27,000 jobs brought by tourism,” she said. “The mine would generate less than $900,000 in tax revenues annually with profits going to shareholders: Compare this to $299 million in annual sales and use taxes in Custer and Fall River counties, $131 million in the market value of agricultural products in the affected counties, and $1.4 billion in annual tourism sales in the Black Hills,” she said. Wild Horse Sanctuary Attorney Mike Hickey argued to the Water Management Board: “One of the overriding issues in this matter is whether granting Powertech’s applications is in the public interest. “It seems fair to say Powertech wants to exploit significant amounts of water and minerals that belong to the citizens of South Dakota,” he continued on behalf of the intervening owners of the private wildlife preserve located just downstream from the proposed mining. “Not only does Powertech want to exploit those public assets, but Powertech wants to do so for nothing more than the cost of extraction,” he said. “South Dakota and its citizens will not be the beneficiaries of this project if it comes to fruition. The beneficiaries of this project will be the shareholders of Powertech Uranium Corp.” The DENR guidelines state that “In South Dakota, all water (surface and ground water) is the property of the people of the state.” Powertech’s applications show it is seeking a permit for industrial use in order to mine. State law considers the permit lasts for an indefinite time, but the concept of beneficial use is crucial: “After obtaining a water right, the water right remains in effect as long as water continues to be placed to beneficial use,” the law says. South Dakota Assistant Attorney General Diane West told the Native Sun News that the DENR would have to rule on any change-of-use application if investors in a mining project propose to use the water for a purpose other than mining, according to rules developed by the Water Management Board, other states’ case law precedents and South Dakota statute. The Water Management Board has set Dec. 9 at 8:30 a.m. as the date and time to reconvene the hearing for another week of testimony at the Ramkota Convention Center in Rapid City. In the meantime, the Board of Minerals and Environment will hold is second week of hearings on Powertech’s large-scale mining permit application, beginning Nov. 11 at 10 a.m. and continuing through Nov. 14 at the Ramkota, then moving to the Hilton Garden Inn on the Nov. 15. Administrative case law history is in the making with the upcoming board decisions, which will impact on other in-situ leach mining uranium ventures that Powertech has on the back burner. (Contact Talli Nauman, Native Sun News Health and Environment Editor at talli.nauman@gmail.com) Copyright permission by Native Sun News
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