Montana Supreme Court hears Smith River Mine case in Missoula

Laura Lundquist

(Missoula Current) The Montana Supreme Court will decide whether a mining company can suck millions of gallons of water out of the ground and keep it for months without having to obtain a water-right permit.

On Friday, Missoulians had the opportunity to see the Montana Supreme Court in action as it considered a case that could clarify an aspect of Montana water law and affect whether the mining company Tintina Resources can begin copper mining in the Smith River headwaters or if it has to reapply for a groundwater water-right permit.

The seven justices normally hear about 15 cases a year in Helena, but they also travel to one or two towns in the state each year to allow citizens to observe oral arguments. Second-year UM law student Alex Clark summarized the case for more than 200 people in the PARTV Theater on the University of Montana campus prior to the justices hearing the oral arguments. The case is an appeal of a lower court decision that went against five conservation groups fighting the mine: Trout Unlimited, Montana Trout Unlimited, Montana Environmental Information Center, Earthworks and American Rivers.

“Whether dewatering a mine is always exempt from water-use permitting requirements is an issue of first impression, meaning the court has never considered the question square-on,” Clark said.

For almost a decade, Tintina Resources has tried to develop its Black Butte Project copper mine north of White Sulphur Springs. Once operational, the underground mine would produce, in addition to copper ore, almost 13 million tons of toxic metals – including nickel, thallium, strontium, copper, lead, arsenic, and uranium – and mine waste that would leak sulfuric acid. Excavation of the mine would require the workers to pump out about 807 acre-feet or more than 250 million gallons of groundwater annually to allow them to mine the ore over a projected 13 to 19 years.

The region where the mine is planned is officially closed to any new surface water rights because water in the river basin is already over-allocated. However, people can still get new permits to use groundwater if they can demonstrate to the Montana Department of Natural Resources Conservation that their water use won’t affect people who already own water rights in the area. Surface water is connected to groundwater so depleting groundwater stores can also cause stream levels to drop.

During questioning, two justices, Dirk Sandefur and James Rice, said the key word in this case is “use.” The two laws where that word comes into play are the 1973 Water Use Act and the 1972 Montana Constitution.

In 2018, Tintina Resources applied for a DNRC permit to withdraw 40% of the total groundwater amount – 350 acre-feet of groundwater per year – and use it to process the copper ore. It received a permit after developing a mitigation plan based on an analysis that showed pumping that much groundwater would have a significant hydrological effect, including diminishing flows in Sheep Creek, which feeds the Smith River. It also showed that some water would be lost to evaporation in the holding ponds.

Montana Trout Unlimited and other conservation organizations noted that 60% of the 807 acre-feet of groundwater – about 150 million gallons – that Tintina planned on pumping every year wasn’t accounted for. They objected, saying the permit should have to cover the full amount of groundwater withdrawn. But the DNRC said that wasn’t necessary because Tintina planned on impounding that water for long enough to clean it – about three months – and then it would be pumped back underground.

The DNRC’s position is it can’t require Tintina to do an analysis and get a permit for the impounded water because impounding isn’t a “beneficial use” as defined in the Water Use Act, although mining is. DNRC attorney Brian Bramblett said the agency can only regulate either the waste of water or a beneficial use granted by a water right or permit. Stored water is neither waste nor a use, Bramblett said.

“DNRC’s interpretation of the law has been characterized as a loophole. I’d say it’s not a loophole, it’s actually the limit of the law,” Bramblett said.

Montana Trout Unlimited attorney Sean Helle said the Water Use Act defines beneficial uses and protects senior water rights, but the DNRC is interpreting it wrong. By removing the groundwater from the mine, Tintina is using it for mining purposes, whether or not it goes on to use the water for something specific. Therefore, Tintina should have to get a “water use” permit instead of a water right permit, Helle said.

Helle also pointed to a section in the Water Use Act that requires the agency to do what it can to protect Montana’s waters beyond just overseeing permitted activities. Helle said the DNRC has failed in that respect by not creating a water-use regulation.

“For three months a year, Tintina will be impounding its unpermitted diversion. It will result in the loss of water to evaporation and it will also result in hydrological impacts because when this groundwater is impounded, it cannot be contributing to streams, it cannot be in the ground,” Helle said. “We’re not simply talking about pumping water and returning it to the ground. There is a period of up to three months when this unpermitted diversion will be under the company’s complete control and possession.”

Justice Ingrid Gustafson asked if a permit should be required if the water wasn’t impounded; just removed and then returned. Helle said it was a matter of appropriation so impoundment wasn’t essential. But impoundment in this case adds additional environmental downsides such as evaporation and hydrological disturbance.

Justices Beth Baker and Gustafson asked Tintina and the DNRC questions about how withdrawing that much groundwater wouldn’t affect other water-right owners.

“To get a permit, in a closed basin especially, you’ve got to show no net depletion,” Baker said. “So even if the mine isn’t using the water or putting it to a beneficial use, it’s up to the applicant to demonstrate that. It’s not up to the senior water rights holders to come back later and say ‘we’re being harmed.’ So if we don’t know whether there will be a net depletion, how does that meet the intent and the language of the Water Use Act?”

Again, Bramblett said the Water Use Act was limited to regulating water rights, not everything related to water. So if an activity didn’t have a water right or permit, it didn’t need to be evaluated, Bramblett said.

Justice Laurie McKinnon pointed out that the Water Use Act says that water belongs to the state and its citizens. Furthermore, the company wouldn’t be able to mine if it didn’t extract the water, and the Colorado Supreme Court ruled that the extraction of water to facilitate a process is a beneficial use.

“The tributaries into Sheep Creek are going to be affected. And that’s a senior water right,” McKinnon said.

Helle said that’s why the DNRC’s interpretation flips the Water Use Act on its head because it elevates the interest of those who do not have water rights – Tintina – over the senior rights holders that the act is intended to protect. The impounded toxic water is not the same as water behind a dam – senior water rights owners could not make a call for water.

“With respect to Tintina, (the DNRC’s) theory of nonuse creates this anomaly where the water pumped and impounded at the Black Butte Mine is not being used by Tintina but it would be unavailable for use by anyone else. And under the Water Use Act, the notion of unused but unusable water makes no sense,” Helle said.

Chief Justice Mike McGrath said the court would take the oral arguments under advisement and a decision will be forthcoming.

This is the second time within the past year that attorneys for the conservation organizations have found themselves taking on the state of Montana in front of the state Supreme Court. In February, the justices ruled against the conservation groups, saying that the Montana Department of Environmental Quality did a sufficient environmental analysis prior to granting Tintina a mining permit. In that case, the state had to appeal after the lower court ruled in favor of the conservation groups.

Contact reporter Laura Lundquist at lundquist@missoulacurrent.com.