COLORADO SUN 11-15-19 Glenwood spending $1.2 to fight mine

Nov 15, 2019

Glenwood Springs is spending $1.2M in tax money on a public affairs campaign to fight a mine above town

 

Original story: https://coloradosun.com/2019/11/14/glenwood-springs-limestone-mine-campaign/?mc_cid=da088b753c&mc_eid=22e656522e

by Jason Blevins

Politically connected investment firm Rocky Mountain Resources wants to grow its Mid-Continent Limestone Quarry, seen in the upper left of the photo, above Glenwood Springs from about 16 acres to 447 acres. (Jason Blevins, The Colorado Sun and EcoFlights)

GLENWOOD SPRINGS — This riverside city spends tax dollars on police and emergency medical services. The city directs tax revenue toward wildfire mitigation efforts on its borders. It’s spending more this winter on snow removal so fire trucks and ambulances can more easily navigate narrow streets.

And now it’s paying for a public affairs campaign to protect the city from what the mayor calls “the biggest threat to our community I’ve ever seen.”

“I don’t think citizens have a problem with us spending their money on health and safety issues for things that are a threat to our town. And this proposal, this is 100% a threat to our town. It’s a threat to everything we are,” Glenwood Springs Mayor Jonathan Godes said about the city’s new publicly funded advertising and media campaign to block a politically connected mine owner from exponentially expanding an open-pit limestone quarry just above the city’s hot springs.

The historic resort city has directed $250,000 toward the fight to stop the expansion of the Mid-Continent Limestone Quarry and put another $1 million in a reserve war chest. And Glenwood Springs leaders have gathered unprecedented support for its first public affairs campaign targeting a business, with council members, trustees and commissioners from every municipality in Pitkin and Garfield counties unanimously backing the fight to block the mine expansion.

The resolutions the city has gathered in recent months come from the Pitkin County commissioners as well as trustees and council members from Rifle, Silt, New Castle, Glenwood Springs, Carbondale, Basalt, Aspen and Snowmass Village. Every community vote was unanimous.

On Saturday afternoon, the city is hosting an event at the Glenwood Springs Community Center unveiling the new campaign and informing residents about the plan proposed by Rocky Mountain Resources, which is suing the county as it seeks federal approval to grow its limestone mine above to increase production by more than 8,000% annually.

Garfield County’s commissioners have not formally issued a resolution opposing the mine, but the board is defending lawsuits filed in both state and federal court by the mine’s owner, Rocky Mountain Resources, which argues the county’s enforcement of the mine’s county permit conflicts with state and federal permitting. The resolutions passed by Glenwood Springs’ neighbors demand that RMR comply with those local regulations.

MORE: The politically connected owner of a Glenwood Springs quarry wants a massive expansion. Residents are preparing for a fight.

“It’s really cool and it’s really wonderful that these other municipalities are coming to help us,” said Steve Beckley, the owner of the Iron Mountain Hot Springs and Glenwood Caverns Adventure Park, which is adjacent to the proposed expansion of the Mid-Continent Limestone Quarry. “When a mine owner sues a county and says you don’t have jurisdiction over us even though we are in your backyard, I hope that everybody in this state stands up and takes notice. This could be a precedent that impacts everywhere in Colorado.”

RMR, which has owned the Mid-Continent Limestone Quarry since 2016, wants to expand its federal permit with the Bureau of Land Management from 15.7 acres to 447 acres, with mining of chemical-grade limestone and dolomite on 320 acres within that boundary.

The proposal calls for RMR to increase its now-seasonal operations, which are prohibited from Dec. 15 to Apr. 15 and produce up to 60,000 tons of limestone products a year, to a 20-year, year-round operation that would produce 5 million tons of limestone products a year. The proposal seeks BLM permission to use as many as 30 semi-trucks, each making 15 to 20 daily round-trips from the mill down the unpaved Transfer Trail road to a riverside railyard.

The BLM is pursuing an intensive Environmental Impact Statement review of the Mid-Continent expansion plan, but the likely years-long process is just beginning and public comment is months away.

But the communities around the mine are preparing residents for that comment period, hoping the public campaign can sway the BLM to reject the proposal.

In addition to concerns over visibility, truck traffic and potential disruption of the flow of geothermal water that feeds the town’s hot springs, opponents of the mine fret that RMR’s owner, Chad Brownstein, has deep political connections that could greenlight the expansion despite opposition.

Interior Secretary David Bernhardt, who is a native of Garfield County. (Provided by the U.S. Department of the Interior)

Interior Secretary David Bernhardt once lobbied on behalf of oil and gas clients for Brownstein’s father’s influential Denver law firm Brownstein Hyatt Farber Schreck.

The ultimate decision for the mine expansion will fall to Bernhardt, who is under investigation for influencing policy that benefited California’s Westlands Water District, which was his largest client as a lobbyist.

“Are we worried about the failure of the BLM to listen to the concerns of the community and follow the law? Yes we are and we should be. Some of the lawyers and lobbyists at the Brownstein firm working on this plan are former BLM officials. The revolving door is spinning wildly on this one,” said Matt Ward, an environmental lawyer whose Washington, D.C.-based Sustainable Strategies DC is helping Glenwood Springs plan its campaign.

 

In April, Garfield County’s commissioners held a public hearing and found RMR was not in compliance with the county’s special-use permit last amended in 2010, citing five issues:

* The mine’s federal, state and county permits authorized chemical-grade limestone dust, but RMR was supplying road base and construction materials.

* The quarry operated between Dec. 15 and April 15, when operations are not permitted.

* The mine’s operators expanded to almost 21 acres but the county permit allows operations on only about 16 acres.

* The mine’s exploratory drilling, allowed under a BLM permit, was not authorized by the county permit.

* Mine traffic on Transfer Trail was violating conditions of the county permit.

The commissioners gave RMR until June 1 to correct the permit violations. (The Colorado Division of Reclamation, Mining and Safety has approved the operation’s boundary of 38 acres and in 2017 reported the mine was in compliance with its rules.)

In May, less than two weeks before the county’s deadline, Rocky Mountain Resources sued Garfield County commissioners, arguing the county does not have the authority to enforce the permit.

The lawsuits urged both courts to stop the county’s permit enforcement, saying the county’s Notice of Violation conflicted with not just federal and state permits, but the General Mining Act of 1872. The fight hinges on that 147-year-old legislation. RMR says it is mining “locatable minerals,” which federal law dating to 1872 encourages with lesser regulation, smaller taxes and easier access to public lands. But RMR’s Mid-Continent mine has historically produced minerals the legislation describes as “common,” like basic limestone and aggregate, which requires stricter regulation and bigger severance tax payments to the federal government and local communities.

Read more outdoors stories from The Colorado Sun.

Grand Junction U.S. District Court Judge Gordon P. Gallagher in late September suspended the federal lawsuit while the state court mulled the case.

“The state interests involved here are no small matter,” Gallagher wrote. “Colorado and its discrete counties have developed systems for the granting and denial of mining permits. These systems ensure the viability and conservation of the state’s natural resources. The importance of mining and mining law is axiomatic to the State of Colorado and in this case important statewide issues are in question.”

The lawsuit is now winding through state court.

The Colorado Division of Reclamation, Mining and Safety last month contacted RMR asking about the Garfield County Special Use Permit and what the company was doing to resolve “potential noncompliance issues.”

Last week the company’s attorneys replied to the division, noting the lawsuits and saying the county “has not acknowledged preemption of state and federal law.” RMR’s attorney David McConaughy, with Garfield & Hecht, said Garfield County won’t act on its list of violations until the federal case is resolved and since the federal case has been stayed, the county’s Notice of Violation “will not be enforced and will have no impact on RMR’s operations for at least several months.”

McConaughy also said RMR is applying for a new special-use permit from Garfield County.

“The purpose of the application is to resolve the ambiguities in the existing permit and reconcile Garfield County’s permit conditions with the permits issued by your agency and by the BLM,” he wrote in the Nov. 6 letter to the division.

RMR also is asking the Colorado Department of Public Health and Environment’s Air Pollution Control Division for air quality permits allowing its Mid-Continent mine to expand its current air quality permit limit on limestone production to 800,000 tons a year from 400,000 tons.

The required Air Pollutant Emissions Notice applications detail air quality mitigation plans for blasting, crushing, screening and moving as much as 3.9 million tons of limestone products for 10 hours a day, 250 days a year. The air quality permit request documents mitigation efforts for 64 daily round-trips by 34-ton trucks on unpaved roads for 10 hours a day, 365 days a year. The request included a check for $573.39 for processing the notice applications.

50 truck trips an hour

The potential for as many as 600 truck trips up and down the unpaved Transfer Trail between 6 a.m. and 6 p.m. every day of the year — that’s 50 trips an hour, according to the BLM application — ranks among the most troubling issues for residents of Glenwood Springs.

Equally troublesome is RMR’s more recent request for the BLM to allow drilling of five wells — between 125- and 250-feet deep — to study water quality and hydrology around the mine as part of a baseline to anchor the BLM’s environmental review of the proposed expansion. RMR is asking the BLM to exclude the monitoring wells from more intensive environmental review.

That proposal drew 250 comments that the BLM is reviewing, agency spokesman David Boyd said.

Glenwood Springs residents fear the wells could disrupt the delicate geothermal network that feeds the historic Glenwood Hot Springs Pool and the newer Iron Mountain Hot Springs, two of the city’s top tourist attractions.

“The water that comes through the proposed quarry expansion area is source water for the hot springs,” said Iron Mountain Hot Springs owner Beckley, who has joined Glenwood Hot Springs Resort and Lodge chief Kjell Mitchell in opposing the mine expansion and monitoring wells.

Garfield County’s three commissioners want the BLM to include the drilling of the water-monitoring wells in a comprehensive environmental review to safeguard the hot springs, which they described in a letter to the BLM sent last month as “the lifeblood and economic engine” of the community.

“To proceed with blind haste is to jeopardize our ecological wonders — and it is unnecessary, imprudent and inconsistent with the government’s obligations under the law,” reads a letter from all three commissioners urging the BLM’s Colorado River Valley Field Office manager Larry Sandoval to deny RMR’s request for a categorical exclusion of the proposed well drilling.

Emails and calls to Rocky Mountain Resources, which lists offices in Denver and Beverly Hills, California, on its federal filings with the Securities Exchange Commission, were not returned. County and city officials say they have not heard anything from the company since the lawsuits were filed.

“They have basically turned into a turtle and pulled their head into their shell and are not making any public moves,” said Jeff Peterson, the head of the Glenwood Springs Citizen Alliance, which has led the public opposition to the mine expansion.

More than 200 Roaring Fork Valley businesses have signed a petition protesting the planned expansion, Peterson said.

“Outside of the government entities, we have seen overwhelming support from local businesses and community groups,” he said. “In fact, we have not seen anyone jumping up and down saying this is a good thing for the community. This is a unified message that this is a bad proposal.”

The lawsuits, the water-monitoring wells application with the BLM as well as the applications to increase its air pollution with an increase in limestone production appear to opponents as efforts to trickle the expansion through the approval process versus a single push.

“They are basically letting boulder after boulder roll down the hill until there is an avalanche that we can’t stop and it will be too late to stop,” said D.C. lobbyist Ward, who is pushing for closer scrutiny of RMR’s assertion that it is mining “locatable minerals” — and thus should be allowed to grow under the 1872 General Mining Act — while it is delivering common aggregate for road projects, which is not protected under the venerable hard-rock mining legislation.

Mining for highly valuable, or “locatable” minerals is regulated less tightly and allows for smaller severance taxes paid to local communities. That part of the 1872 mining law was designed to encourage mining for valuable minerals on public land. RMR is arguing its mining of chemical-grade limestone for high-end concrete and dolomite falls under the 1872 legislation’s “locatable minerals” protections.

But opponents of the plan say the mine is producing common minerals, which require stricter regulation and heftier payments. Residents and city leaders have collected sales receipts showing the company is selling aggregate, or road base, for local projects, like Glenwood Springs’ new bridge spanning the Colorado River.

“The fear is that the BLM is going to find a shovel full of locatable minerals somewhere on the hill and say that’s enough to let them go all the way with the proposed mining expansion. So we really want the public to be involved in this common variety mineral determination,” said Ward, who added he has worked with communities from the Pacific Northwest to Florida and never seen a public campaign like the one launched by Glenwood Springs. “The reason Glenwood Springs is doing this is because their fundamental future is at stake. It is not an exaggeration to say this is an existential crisis for Glenwood Springs if that mine is approved.”

Rocky Mountain Resources is not talking, but they are gathering investors.

Financial statements filed last month for the final quarter of 2018, showed RMR Industrials selling about 39.7 million shares of stock in 2017 and 2018, which last year buoyed operations with more than $9 million in cash.

The company was born in 2014, when Brownstein’s Rocky Mountain Resources Holdings bought a publicly traded company called Online Yearbook, which developed and marketed online junior high and high school yearbooks, from entrepreneurs El Maraana and Salah Blal for $357,670. Brownstein changed the name from Online Yearbook to RMR Industrials Inc. and pivoted the business to industrial assets and financing natural resources acquisitions.

In 2016, Brownstein and his partner Greg Dangler formed a Colorado subsidiary, RMR Aggregates, with a plan to “hold assets primarily relating to the mining and processing of industrial minerals” identified in public documents as limestone, aggregates, marble, silica, barite and sand.

Three months later, they acquired CalX Minerals, the company that owned and operated the Mid-Continent Limestone Quarry on 41 BLM mining claims above Glenwood Springs.

In early 2018, the company sprouted Rail Land Company, LLC, and purchased 620 acres in Bennett and began plans to develop a rail park to handle its aggregate business. In September 2018, the company sold 5,263 shares of RMR Aggregates for $2.5 million.

According to the SEC filings, the RMR business plan is long term and relies heavily on issuing more stock. It does not make money right now. The company spends about $700,000 a month and relies on issuing stock to stay afloat. In its latest unaudited filings, company executives reported a lack of accounting personnel to ensure complete and effective financial reporting, which resulted in financial statements filed behind schedule.

“We do not generate adequate cash flows to support our existing operations,” reads the financial report  filed last month, noting that the company needs $10 million to $20 million from stock sales to “successfully execute our business plan.”

Since buying Online Yearbook, the company had lost $32.9 million through the end of last year, the latest filings warned, noting additional losses were coming and additional financing was required to meet obligations and attain profitability.

“Any failure to secure additional financing may force us to modify our business plan. In addition, we cannot be assured of profitability in the future,” the October 2019 filing reads.

 

 

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