Free Response - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 04-MK-0749(PAC)

HIGH COUNTRY CITIZENS' ALLIANCE; TOWN OF CRESTED BUTTE, COLORADO; BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF GUNNISON, COLORADO Plaintiffs, v. KATHLEEN CLARKE, in her official capacity as Director of the U.S. Bureau of Land Management; RON WENKER, in his official capacity as Colorado BLM Director; U.S. BUREAU OF LAND MANAGEMENT; GALE NORTON, in her official capacity as Secretary of the Interior; UNITED STATES DEPARTMENT OF THE INTERIOR; PHELPS DODGE CORPORATION; MT. EMMONS MINING COMPANY, Defendants. ______________________________________________________________________________ PLAINTIFFS' FILING REGARDING FREEDOM OF INFORMATION ACT ______________________________________________________________________________ Plaintiffs High Country Citizens' Alliance ("HCCA"), Town of Crested Butte, and Board of County Commissioners of the County of Gunnison, Colorado ("Gunnison County"), respectfully submit this document in response to this Court's direction contained in its September 30, 2005 Order Denying Motions for Summary Judgment. In that Order, this Court directed that: The Plaintiffs shall file and serve a written document which correlates each entry in the revised Vaughn index to the specific page or pages in the Behre Dolbear Report that the Plaintiffs believe show that the withheld documents are not confidential. If an entry in

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the Vaughn index is not specific enough for the Plaintiffs to make such correlation, they shall so specify. Order at 16. The Federal Defendants submitted their revised Vaughn Index on October 6, 2005. In the revised Vaughn Index, the Federal Defendants gave their justification for withholding portions of the Mineral Report ("MR") and Attachment 2 to the MR, the Western Mine Engineering Report ("WMER"). The following is Plaintiffs' analysis of the revised Vaughn Index and the correlation with the previously-released Behre Dolbear Report ("BDR"). This analysis will correspond to the pages of the MR and WMER listed in the revised Index.

I.

THE WITHHELD PORTIONS OF THE MINERAL REPORT ARE NOT "CONFIDENTIAL" SINCE THE SAME OR EQUIVALENT INFORMATION HAS ALREADY BEEN PUBLICLY RELEASED Subject Matter of Withheld Document: "Summary and Recommendations." The withheld information is simply entitled "Summary and Recommendations" in the revised Index. As this Court stated in its September 30th Order, this justification for nondisclosure, without more, is "not sufficiently described" to meet the agency's burden under FOIA. Order at 14-15. Despite this statement from the Court, the Federal Defendants failed to provide any further description or justification in the revised Index. Thus, it is difficult for Plaintiffs to correlate this to the BDR, or to adequately ascertain what information is withheld.

MR p.2

MR p. 42

Subject Matter of Withheld Document: "Table 2. Discovery Drill Hole Data." This is apparently a table of data from the various holes drilled into the ore body to justify the patent applicant's (Mount Emmons Mining Company, or "MEMC") assertion that MEMC had discovered a "valuable mineral deposit" on each of its mining claims. The drilling to obtain the data occurred in the 1970s. See MR at 39-40. The MR (and WMER) reviewed the same data as the BDR. Although the BDR does not contain a specific table of this data, it does contain a detailed analysis and description of this data. BDR at 32-37. Further, based on this data, the BDR contained extensive analysis and conclusions regarding the extent and scope of the ore body and the molybdenum mineralization. BDR at 1, 6-8, 39-42, 44-52, 55, 59. See also BDR Figures 4-12 to 4-20 (detailed modeling results of the ore body based on the drill data).

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Thus, while a specific table of drill data has not yet been released to the public, the critical information for which the data was originally obtained ­ the nature and extent of the molybdenum mineralization on Mt. Emmons ­ has been released through the BDR. MR pp. 54-55 Subject Matter of Withheld Document: "Comparison of original assays and check assays for discovery drill holes." This table appears to be a comparison of the original assay data from the drill holes with "check" assays to verify the assay results. Similar to the above discussion regarding the drill hole data, this information was used to verify the nature and extent of the molybdenum mineralization within MEMC's mining claims on Mt. Emmons. Although the BDR does not contain this table, the basic information and conclusion contained in the BDR detailing the mineralization is the same or similar to the results reviewed in the MR (and WMER). It should be noted that MEMC submitted the BDR to the Defendant Bureau of Land Management ("BLM") in support of its patent application (i.e., to support its assertion that each mining claim contained a valuable mineral deposit), and BLM relied in part upon the BDR to justify its decision to issue the patent. See April 2, 2004 patent Decision, at 2, 7-8. Thus, MEMC and the Federal Defendants cannot argue that the BDR was in error (although Plaintiffs assert this in their case in chief) or that the MR and WMER differ materially from the BDR in their analysis and conclusions. In other words, although the MR and WMER further describe the data and apparently refine the conclusions of the BDR, the data and conclusions are essentially the same. Since all of the basic information and conclusions regarding the mineralization was released to the public in the BDR, there is little, if any, "new" information that can be deemed "confidential" under FOIA. MR pp. 57-61 Subject Matter of Withheld Document: "Tonnage and Grade Considerations; Table 4. Block model parameters (from WME, 1999); Figure 36. Plan view of reserves." These completely-withheld pages deal with "Tonnage and Grade Considerations" and other information regarding the mineralization. Since no other description and justification is given, it is difficult to ascertain what information is "confidential." Regarding the "tonnage and grade considerations," this information is specifically analyzed in the BDR, at 1-2, 4-8, 9-10, 39-42, 44-52, 55, 59. Further, the BDR contains cross-section models and other depictions of the ore body at Figures 3.1,

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3.2, and 4.12 to 4.20. BDR Figures 4.2 to 4.11 also depict the ore body and mineralization in various formats (e.g., mineralization frequency, "variograms"). These models and depictions are analyzed at pp. 44-52. The Federal Defendants based their withholding of this information in large part on the email from MEMC's attorney, who argued that the information was "confidential" since it would divulge "information about the presence, kind, and grade of ore in specific drill holes, and the quantity and grade of reserves ... all could be used by competitors in developing pricing strategies to underbid Phelps Dodge[/MEMC] in the futures markets." September 30th Order at 14. However, with the public release of the BDR, "the presence, kind, and grade of ore" as well as "the quantity and grade of reserves" is fully known. For example, the BDR specifically summarizes the exact tonnage of reserves, at varying percentages of molybdenum. BDR at 1. Pages 6-8 of the BDR details, in text and table format, the exact tonnages of molybdenum at specific levels within the proposed mine area, down to three decimal places. The main body of the BDR analyzes this information in detail, with complete descriptions of the "tonnages and grade" of molybdenum at each elevation level of the proposed mine. BDR at 39-42, 44-52, 55. As noted above, MEMC based its patent application on this information and BLM relied upon it in issuing the challenged patent. MR pp. 62-71 Subject Matter of Withheld Document: "Economic Evaluation (Molybdenum Price; Revenues; Costs; Personnel; Capital Costs; Operating Costs; Economic Viability; Table 5; Summary of Economic Analysis." These completely-withheld pages apparently discuss the economic aspects of mining and processing the ore body on Mt. Emmons. No specific justification for nondisclosure is given, outside of the generalized statements in the Haskins Declaration and Holt email. See Order at 13-14. Each of the allegedly "confidential" information regarding "molybdenum price," "revenues," "costs," "personnel," "capital costs," "operating costs," and "economic viability," was made available in the BDR. For example, specific information regarding the molybdenum price that would support a viable mine is contained at pp. 154 and 160-161. The economic spreadsheet tables following p. 161 are based on a set molybdenum price. Further, the BLM's April 2, 2004 patent Decision discusses what the agency used as the viable molybdenum price. See Decision at 6-7. The BDR contains extensive analysis, with numerous supporting graphs, spreadsheets, and tables, of project revenues and costs for everything from preproduction and capital costs to daily and yearly operating costs. See BDR Chapter

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14, "Project Economics" at pp. 153-161; Chapter 11, "Estimated Capital Costs" at pp. 129-142; Chapter 12, "Operating Costs," at pp. 143-150; Section 9.10, "Capital and Operating Cost Estimates for Environmental Compliance and Closure," at pp. 123-127. Appendix A ("Capital Costs") and Appendix B ("Operating Cost Data") further detail the publicly-available economic information. The Holt email from the company, and BLM, argue that the withheld information is "confidential" under FOIA because it contains "estimates and analysis of mineral extraction, processing, and mine reclamation costs." Order at 14. However, all of this information is contained in the BDR. MR p. 72 Subject Matter of Withheld Document: "Conclusions: Gives an explanation of the purpose of the Mineral Report, which is to determine whether the ten mining claims under examination are valid. The report is concluded by information provided by the claimant, the drill core and drilllogs, the geologic literature, and the reports completed by AMS, BDC, and WME." It is not clear what information is "confidential" since it appears to merely restate the conclusions and "purpose" contained in the BLM's April 2, 2004 patent Decision that each mining claim contains the requisite discovery of a valuable mineral deposit. Regarding the other listed information, including "geologic literature," for example, the BDR is replete with discussions on this. BDR at 27-37. The released portions of the MR also focus on such literature. MR at 16-44. Addendum Subject Matter of Withheld Document: "Mount Emmons Project, Mineral Examination Date Case, Cash Flow Analysis; Mount Emmons Project; FHFC Case, Cash Flow Analysis." This material is vaguely described as "Cash Flow Analysis." As noted above, the BDR contains extensive data, analysis, summaries, and conclusions regarding the project economics. See, e.g., economic spreadsheets after p. 161.

II.

THE WITHHELD PORTIONS OF THE WESTERN MINE ENGINEERING REPORT ARE NOT "CONFIDENTIAL" SINCE THE SAME OR EQUIVALENT INFORMATION HAS ALREADY BEEN PUBLICLY RELEASED Subject Matter of Withheld Document: "Block Model Parameters; Compositing; Geostatistics/Variography; Restricting the Influence of High-Grade Intervals; Cumulative Frequency Diagrams of MoS2 ; Variogrpahy; Mount Emmons Variogram."

WMER pp. 8-3 to 8-8

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This section of the WMER apparently describes the data and analysis (including statistical analysis) of the molybdenum mineralization. The BDR has already made this information public. For example, at pp. 44-53, the BDR contains detailed analysis and data regarding "Block Model Parameters," (p. 45); "Block Models," (pp. 50-51); "Compositing," (pp. 45-46); "Variography," (pp. 45-46); "Variograms," (Figures 4.3 to 4.11); and "Cumulative Frequency Diagrams," (Figure 4.2). The BDR also contains cross-section models of the ore body. Figures 4.12 to 4.20. See also Figures 3.1 (area geologic section) and 3.2 (geologic map). WMER p. 8-9 Subject Matter of Withheld Document: "Clipping; Block Model." This page simply says "Block Model." However, the BDR describes "block models" of the ore body. BDR at 45, 50-51 and Figures 4.12 to 4.20. WMER pp. 8-10 to 8-18 Subject Matter of Withheld Document: "Map of Drill Holes; Estimation; Plan View Map of Drill Holes; Modeling Results; Perspective View of the Mount Emmons Block Model; Conclusions Regarding Reserve Estimates." The "Map of Drill Holes" is found in the BDR at Figures 3.3, 3.4, 9.3.1 and 9.3.2. BDR Figures 4.12 to 4.20 depict the modeled ore body. The drill results are discussed at pp. 32-37. Notably, since no drill holes were drilled after the preparation of the BDR (or since the 1970s), and since the map of the drills holes is included in the BDR, the withheld "Map of Drill Holes" in the WMER should be the same as the one in the BDR. Conclusions regarding the ore body mineralization and reserves are at pp. 39-42 and 49-52. See also Figures 5.8 to 5.18. These pages and figures in the BDR detail and analyze, on an elevation-by-elevation (i.e. different mine levels) basis, the nature and extent of the mineralization. Although the BDR does not contain the specific data from each drill hole, the alleged "confidential" information that "could be used by competitors in developing pricing strategies," (Order at 14 (Holt email)) are the results and conclusions drawn from the drill data. This is the information regarding the nature, scope and extent of the mineralized ore body that the BDR fully analyzes. WMER p. 10-1 Subject Matter of Withheld Document: "Mining, Milling, and Related Operations." The redacted sentence is not explained, outside of a vague reference to the title of the paragraph. This type of "conclusory and generalized allegation" as justification for nondisclosure does not satisfy the agency's burden under FOIA.

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See Order at 12, 14-15. In any event, the BDR contains detailed analysis of "mining" at pp. 54-70 and "milling/processing" at 71-84. WMER p. 10-2 Subject Matter of Withheld Document: "Mount Emmons Project Site Layout Map Figure 10.1.1." Maps/descriptions of the Project are contained in the BDR at Figures 5.2 (project general arrangement), 5.7 (conceptual layout site plan), 6.7 (conceptual layout). Previously-released portions of the MR (Figure 29, p. 45) and the WMER (Figure 10.1.2, general arrangement) also show the project layout. WMER pp. 10-4 to 10-5 Subject Matter of Withheld Document: "Mining: Geology and Mineralization Considerations; Geochemical [sic] Considerations." It is difficult to ascertain the nature of what is redacted in these pages, but from the titles and non-redacted language, the withheld information deals with Mining (§10.1), Geology and Mineralization (§10.1.1) and Geomechanical Considerations (§10.1.2). Each of these is analyzed in the BDR. The BDR details the mining process at pp. 8-9, 54-70. Geology and mineralization is reviewed at pp. 27-33, 39-42, and 55. Geomechanical information is discussed at pp. 56-57. WMER p. 10-6 Subject Matter of Withheld Document: "Figure 10.1.3 (Graph of Stability Number (N) versus Shape Factor (S))." This graph is not sufficiently described to ascertain whether it materially and adversely affects MEMC's competitive position. WMER pp. 10-7 to 10-9 Subject Matter of Withheld Document: "Groundwater Inflows; Production Schedule; Ore Production Schedule; Mine Access; Level Development." These redactions cover a wide range of issues, each of which is covered by the BDR. Geomechanical issues (top of p. 10-7): BDR at 56-57, Figures 5.3, 5.4; Groundwater: BDR at 57, 69, 112; Production Schedule: BDR 59-60 (WMER used BDR Table 5-3 in its entirety), Figure 5.6 (pre-production critical path schedule), Economic spreadsheets after p. 161 (detailing year by year production levels with revenues and expenses); Level Development: BDR 64-65, Figures 10.1.4 (WMER), 5.5 (BDR). WMER p. 10-11 Subject Matter of Withheld Document: "Stope Mining." This justification is vague. However, Stope Mining is covered in the BDR at pp.

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63-65, Figures 10.1.6 (WMER), 5.4 (BDR). See also MR Figure 28, p. 44; MR at p. 46. WMER p. 10-12 Subject Matter of Withheld Document: "Figure 10.1.5 (Mount Emmons Project Typical Stoping Sequence.)" There is no detailed justification as to how this withheld information satisfies the requirements for "confidentiality" under FOIA or how the information contained in the BDR differs in any material respect from the information in the WMER which would support a materially different analysis in the WMER. In any event, the BDR shows the "Conceptual Stope Sequence" at Figure 5.3. See also WMER Figure 10.1.5. WMER pp. 10-14 to 10-16 Subject Matter of Withheld Document: "Ore and Waste Haulage System; Backfill System; Ventilation; Ancillary Underground Support Facilities." These redactions cover a wide range of issues, each of which is covered by the BDR. Stope sequencing issues (top of p. 10-14): BDR at 63-65; Ore and Waste Hauling: BDR at 65; Backfill System: BDR at 66; Ventilation: BDR at 66-67; Ancillary Underground Support Facilities: BDR at 68. WMER p. 10-18 Subject Matter of Withheld Document: ""Table 10.2.1 Reagents and Use Rates." No detailed justification as to how this withheld information satisfies the requirements for "confidentiality" under FOIA or how the information contained in the BDR differs in any material respect from the information in the WMER which would support a materially different analysis in the WMER. In any event, the BDR shows the "Reagents and Use Rates" at 77-80, 149. WMER pp. 10-22 to 10-23 Subject Matter of Withheld Document: "Crushing Plant; Dewatering, Filtration and Drying; Reagent Handling and Storage." These redactions cover a wide range of issues, each of which is covered by the BDR, at 80-84. WMER p. 10-25 Subject Matter of Withheld Document: "Discussion re Tailings Disposal Comparison." No detailed justification as to how this withheld information satisfies the requirements for "confidentiality" under FOIA or how the information contained in the BDR differs in any material respect from the information in the WMER which would support a materially different analysis in the WMER. In any event, the BDR shows the "Tailings Disposal Comparison" at 138-140. See also MR at 51-52.

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WMER p. 10-28

Subject Matter of Withheld Document: "Ancillary Facilities." No detailed justification as to how this withheld information satisfies the requirements for "confidentiality" under FOIA or how the information contained in the BDR differs in any material respect from the information in the WMER which would support a materially different analysis in the WMER. In any event, the BDR shows the "Ancillary Facilities" at 88-89. See also MR at 50-51.

WMER p. 11-1

Subject Matter of Withheld Document: "Sample Preparation Procedures and Analytical Methods." No detailed justification as to how this withheld information satisfies the requirements for "confidentiality" under FOIA or how the information contained in the BDR differs in any material respect from the information in the WMER which would support a materially different analysis in the WMER. In any event, the BDR shows the "Sample Preparation" issues at 37-39. See also MR at 53.

WMER p. 11-2

Subject Matter of Withheld Document: "Check-Assay Procedures." No detailed justification as to how this withheld information satisfies the requirements for "confidentiality" under FOIA or how the information contained in the BDR differs in any material respect from the information in the WMER which would support a materially different analysis in the WMER. As detailed above, the BDR fully discusses the mineralization, ore reserves, grades and tonnages of molybdenum. See also BDR at 38.

WMER p. 11-12

Subject Matter of Withheld Document: "Pilot-Plant testing." No detailed justification as to how this withheld information satisfies the requirements for "confidentiality" under FOIA or how the information contained in the BDR differs in any material respect from the information in the WMER which would support a materially different analysis in the WMER. In any event, the BDR shows the "Pilot-Plant Testing" issues at 76-79.

WMER p. 11-15

Subject Matter of Withheld Document: "11.6.4 Concentrate Grade; 11.6.5 Review of Metallurgical Testwork and BDC Conclusions." This Index entry was vague. Further, no detailed justification as to how this withheld information satisfies the requirements for "confidentiality" under FOIA or how the information contained in the BDR differs in any material respect from the information in the WMER which would support a materially different analysis

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in the WMER. In any event, the BDR discusses testing issues at 37-39. See also MR at 53. WMER pp. 12-2 to 12-5 Subject Matter of Withheld Document -- Combined: "Table 12.1.2 Mine Salaried Personnel Schedule." "Table 12.1.3 Mine Hourly Personnel Schedule." Table 12.1.4 Mill Labor and Supervision; Mill Operating Cost Summary." "Table 12.1.5 General and Administrative Staffing Requirements." These redactions cover a wide range of labor costs issues, each of which is covered by the BDR. Mine Personnel: BDR at 132-33, 144-45, 150, to 12-5 Appendix B ("Operating Cost Data," detailing labor costs). As with the other information from the BDR, since MEMC has not submitted any change to the mine proposal (contained in the BDR) submitted to BLM to support its patent application, there could be no material change in the labor, capital, operating, and other anticipated costs. WMER p. 12-11 Subject Matter of Withheld Document: "Table 12.2.2 Mine Initial Capital Equipment and Materials." Mine capital costs are found at BDR 129-142, 158-59, spreadsheets following p. 142, and Appendix A (Capital Cost Data). WMER p. 12-13 Subject Matter of Withheld Document: "Table 12.2.5 Mine PreProduction Development Costs." Mine preproduction costs are found at BDR 129-32. No further justification is given, and it appears that WMER is using the BDR data verbatim. WMER p. 12-17 Subject Matter of Withheld Document: "Table 12.2.8 BDC Mill Capital Cost Summary Dry Tailings Option." No detailed justification as to how this withheld information satisfies the requirements for "confidentiality" under FOIA or how the information contained in the BDR differs in any material respect from the information in the WMER which would support a materially different analysis in the WMER. In any event, the BDR shows the dry tailings option issues at 134-140. WMER p. 12-25 Subject Matter of Withheld Document: "Table 12.2.14 Infrastructure Capital Cost Estimates." No detailed justification as to how this withheld information satisfies the requirements for "confidentiality" under FOIA or how the information contained in the BDR differs in any material respect from the information in the WMER

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which would support a materially different analysis in the WMER. In any event, the BDR shows the infrastructure costs at 141-142.

CONCLUSION Overall, the BDR contains a complete description of the mining claims, geology, economics, mining, processing, development, reclamation and all other relevant aspects of the mining operation and claims relied upon by MEMC in support of its patent application. It appears that, at most, the MR and WMER slightly refine the data, analysis, conclusions, and recommendations contained in the BDR. However, the Federal Defendants have not shown that there is anything in the MR or WMER that is materially different from the BD Report. The fact that MEMC relied upon the BD Report as grounds for its patent application, that BLM relied upon it as grounds for its decision to issue the patent, and that MEMC has never submitted a new mine plan other than that described and analyzed in the BDR, shows that the claimed "confidentiality" no longer exists due to the public disclosure of the BDR.

RESPECTFULLY SUBMITTED this 14th day of October, 2005.

/s/ ___________________________ Roger Flynn Jeffrey C. Parsons WESTERN MINING ACTION PROJECT P.O. Box 349 412 High Street Lyons, CO 80540 (303) 823-5738 Fax (303) 823-5732 Attorneys for High Country Citizens' Alliance and the Town of Crested Butte, Colorado

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Laura Magner P. O. Box 2898 Crested Butte, CO 81224 (970) 349-7770 Fax (970) 349-9372 Attorney for the Town of Crested Butte, Colorado

/s/ __________________________ David Baumgarten, Thomas Dill County Attorney Gunnison County, Colorado 200 East Virginia Ave., Suite 262 Gunnison, CO 81230 (970) 641-5300 Fax (970) 641-7696 Attorney for the Board of County Commissioners of the County of Gunnison, Colorado

Certificate of Service I, Roger Flynn, certify that I served the following persons a copy of the foregoing by mailing them by U.S. Mail, first class postage prepaid this 14th day of October, 2005, as well as filing this by electronic means with the Court. Roxane Perruso Office of the United States Attorney 1225 17th Street, Suite 700 Denver, CO 80202 Frank Erisman, David Steefel Holme Roberts & Owen 1700 Lincoln St., # 4100 Denver, CO 80203 /s/ ________________ Roger Flynn

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