Lithium Americas: Ninth Circuit Court Hears Oral Arguments on Appeal of Approval of Thacker Pass Mining License

On June 26, opponents of Lithium Americas Corp.’s (TSX: LAC) giant Thacker Pass lithium mining project in northern Nevada made perhaps their last ditch argument to stop construction of the mine when the San Francisco-based, three-member U.S. Ninth Circuit Court of Appeals heard oral arguments from all parties in the case. 

The strength of the opposition’s arguments may be stronger than some observers believe however.

In February 2023, Chief Judge Miranda Du of the U.S. District Court of the District of Nevada permitted construction to begin at Thacker Pass despite concluding that in early 2021, the U.S. Interior Department had violated federal law in approving Lithium Americas’ plan to bury 1,300 acres of public land under waste rock without determining the company’s mining rights to those lands.

Her decision included a remedy for this situation. Specifically, Judge Du required the Interior Department to investigate whether lithium is present throughout the Thacker Pass site. A positive finding was necessary for her to “determine whether [Lithium Americas] possesses valid rights to the waste dump and mine tailings it intends to use for the Project.”

In mid-May 2023, the Interior Department released findings from the investigation ordered by Judge Du that were favorable for Thacker Pass and Lithium Americas. The government agency found that all but 80 acres of the 13,000-acre Thacker Pass site contains lithium. This is obviously a very low percentage, but a 2022 decision by the Ninth Circuit seems to require that all the land must have mineralization for some of it to be used as a waste dump, and the availability of a waste dump is necessary for Thacker Pass to be awarded a mining license.

In a 2022 case involving Hudbay Minerals’ proposed open pit Rosemont copper project in Arizona, the Ninth Circuit decided that the U.S. Forest Service incorrectly assumed that Hudbay had valid mining claims to occupy about 2,800 acres of public land. Most of those acres would be used for waste rock facilities, and Hudbay did not establish that copper was present where the waste rock would be disposed. The Court of Appeals ruled that Hudbay could only utilize all 2,800 acres for the mine if it had established valuable minerals were present throughout the entire project area, including that which would underlay the waste rock facilities.

Based on all this, the Ninth Circuit’s upcoming decision on Thacker Pass seems to hinge on whether the Court enforces the letter of the ruling it itself wrote in 2022 regarding another proposed mine. 

Roger Flynn, an attorney for the opposition groups, summarized their case in the hearing, saying “This is the first time in public land history that we have a major project violating a number of provisions but is allowed to go forward. …. This is a dangerous road to go on. The only check on government authority is to vacate an illegal decision.”

Lithium Americas Corp. last traded at $25.68 on the TSX Exchange.

Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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