The Arizona Court of Appeals Division One holds that a new mining shaft built at an existing site is a “new source” of pollutants under the Clean Water Act, subject to increased environmental quality standards and permitting requirements.

A copper mining company built a new mine shaft at a large existing site to access previously untouched copper ore deposits with new mining techniques. The new mine shaft relied on some of the existing structures but was a significant new undertaking that required modifications to existing operations. The company then renewed its Arizona Pollution Discharge Elimination System (AZPDES) Permit for the mine site, which ensures the facility’s water discharge into Queen Creek complies with the pollution limitations and conditions imposed by the federal Clean Water Act (CWS). A tribe challenged the permit issued by the Arizona Department of Environmental Quality’s (ADEQ), arguing the new mine shaft was a “new source” of pollutant discharge under the CWS. Under federal and state law, new sources are subject to more stringent environmental quality standards and permitting requirements than existing sources.

The company argued the new mine shaft was not a new source because the CWS regulations apply to the mine site as a whole and the new shaft was merely added to an existing facility. The tribe countered that the regulations contemplate new features at existing sites when the addition is essentially a distinct mine. Eventually, ADEQ and the superior court agreed with the company.

The Court of Appeals disagreed, holding that the new mine shaft was a new source under the CWS and that the mining company must comply with the CWS environmental quality requirements before ADEQ may issue an AZPDES Permit. The Court focused on interpreting the CWS and the federal regulations to determine whether the new shaft fit the definition and classification of a “new source.”

First, the Court analyzed whether the new mine shaft constituted a separate, distinct “mine” under 40 C.F.R. §§ 440.100 and 440.132(a), subject to independently applicable standards. Because the regulations contemplate discrete structures used for extracting ore or minerals, the new mine shaft was a “mine” and the company’s pre-existing facility as a whole was the “mine site.”  As such, the new mine shaft was subject to independently applicable “new source performance standards” because it produced mine drainage.

Next, the Court determined whether the new mine fit the criteria for a “new source” of pollutant discharge under 40 C.F.R. §§ 122.2 and 122.29. The Court found that it was a new source because “[i]ts processes are substantially independent of an existing source at the same site.” The mine shaft was not, as the State argued, a fully integrated component of the existing site. Rather, it was a significant new addition that required heavy modifications to the existing system and was not intended to replace existing mining activity, but instead use new high-volume mining techniques to access previously untouched copper ore. The Court explained that this outcome supports the purpose of the CWS, which contemplates that new operations will be in a better position to meet more stringent permitting requirements than existing ones.

Accordingly, because the new mine shaft was a new source under the CWS, ADEQ may not issue the mining company an AZPDES Permit until the mine’s water discharge limitations and requirements are finalized, and the company demonstrates that the mine complies with applicable federal water quality standards.

Judge Gass authored the opinion of the Court, in which Judge McMurdie joined. Judge Paton dissented.

Posted by: Payslie M. Bowman