The MDEQ announced on March 1, 2007 that it would withdraw its proposed decision to approve Kennecott's mine permit, pending an internal review of its procedures for ensuring the public record related to the permit review is complete. As a result, the MDEQ also canceled public hearings scheduled for the first week of March until the internal issues have been addressed. We want to make one thing very clear: this issue is about one thing only, the MDEQ's error in not ensuring a complete public record. It is not due to any action or inaction on Kennecott's part, or proposed permit approvals being issued without all the requirements being met. Kennecott stands behind our proposal, and is confident it will endure close scrutiny. Kennecott is disappointed in this decision as it undermines confidence in the process, which hurts everyone; consequently, it is an issue that the MDEQ needs to address properly for everyone's benefit. We trust the MDEQ will rectify the public record and take the necessary steps to ensure the process gets back on track. It is important to us that you are informed and have answers to questions that you may be asking and heard being asked. Below are answers to questions that have been asked in the wake of the MDEQ's announcement.

CLICK ON QUESTION JUMPS TO ANSWER BELOW

What happened?
Did the MDEQ take the right action in this situation?
What is Kennecott's reaction?
Did Kennecott do anything wrong?
What now?
What does this mean for those anticipating the jobs to be created from the mine?
How will this situation affect the Eagle project?
What were the reports about?
Did the MDEQ require Kennecott to address the issues raised in the report?
What was Kennecott's proposed method for dealing with the subsidence question?
Did Kennecott's proposal for dealing with the subsidence issue meet regulators' requirements?
Would Eagle be the first sulfide mine in Michigan?
Is sulfide mining a particular process?

What happened?
The MDEQ late on Thursday (March 1) withdrew its proposed approval of Kennecott's mine permit after discovering that two reports submitted to MDEQ by its technical consultant that were part of the application review process were not included in the public record on the project.

Did the MDEQ take the right action in this situation?
While it is disappointing and unfortunate that the MDEQ made the decision to withdraw its proposed mine permit approval, the regulatory agency has indicated that it believes it has taken the appropriate step for ensuring public access to permit review information.

What is Kennecott's reaction?
Although it is unfortunate that two of the reports to MDEQ by its subcontractor where apparently omitted from the public record, the substantive issues raised in the reports and Kennecott's response have been a part of the public record for quite some time. Moreover, Kennecott understands that specific conditions included in the draft mine permit issued by MDEQ resolved the MDEQ subcontractor's concerns. To view the draft permit conditions or Kennecott's responses to questions, please go to the following links located on the MDEQ website:
Draft Permit Conditions
Kennecott's October 25 Response to MDEQ Comments

Did Kennecott do anything wrong?
Absolutely not. To be clear, the situation is not due to any action or inaction on Kennecott's part. This is an MDEQ internal issue they must address themselves.

What now?
The MDEQ has announced it will conduct an extensive procedural review to determine how the documents were handled. Kennecott is unsure at this time what this process will entail or when it may be completed.

What does this mean for those anticipating the jobs to be created from the mine?
The MDEQ's decision may affect the schedule and timing of mine construction and start of operations. Kennecott recognizes that it is the economic activity the project would generate that is one of the most important benefits the community will experience as a result of our operations. We join others in looking forward to the MDEQ getting the process back on track so that Kennecott will be able to deliver the jobs and business opportunities greatly anticipated.

How will this situation affect the Eagle project?
This is an MDEQ issue that it must address so that it believes has followed a process that maintains the public's confidence in the process. Unfortunately, it will likely affect the timeline for completing the permitting process and getting construction of Eagle underway so that the benefits of the project to the community begin to be realized.

What were the reports about?
The reports were submitted to the MDEQ mine review team last May by an outside consultant the MDEQ hired to assist in the review of Kennecott's mine permit application, specifically the geotechnical analysis of the mine design. The reports provided the MDEQ with requests for clarification or additional information related to the geotechnical assessment.

Did the MDEQ require Kennecott to address the issues raised in the report?
Yes. MDEQ required that Kennecott address the issues raised by the technical consultant. The technical consultant who had initially raised the issues agreed that Kennecott's proposed engineering and method of addressing the issue was the appropriate path to take. The consultant submitted a subsequent memorandum (November) to MDEQ to this effect.

What was Kennecott's proposed method for dealing with the subsidence question?
First, geotechnical data from the mine site area indicates the integrity of the rock is such that the potential for subsidence - even the smallest amount - is very unlikely; however, Kennecott prefers to take a conservative approach to such issues by taking preventive measures through the design and engineering of the mine. In this case, Kennecott will mine from the bottom of the ore body up to a specific point below the top of the mine. At that point, additional geotechnical information will be gathered and engineering for completing the mining process will be submitted to the MDEQ for its review and approval. The MDEQ and its consultants agreed that this was the appropriate course of action and would ensure environmental protection and safety standards. Consequently, this approach was incorporated into draft permit conditions Section E (5), dated February 23, 2007.

Did Kennecott's proposal for dealing with the subsidence issue meet regulators' requirements?
Yes. The technical consultant who had initially raised the issues agreed that Kennecott's proposed engineering and method of addressing the issue was the appropriate path to take. The consultant submitted a subsequent memorandum (November) to MDEQ to this effect.

Would Eagle be the first sulfide mine in Michigan?
No. Mineral extraction from sulfide ore bodies has taken place previously in Michigan. The White Pine and Ropes mines are just two such operations, which produced copper and gold respectively. Other Òsulfide minesÓ have existed, as the UP has a long history of producing the resources society has needed for key technology advancements.

Is sulfide mining a particular process?
No. First the phrase "sulfide mining" is a misnomer. Most of the earth's base metals are found in sulfide ore bodies. Extracting them is not "sulfide mining". It is nickel mining or copper mining or gold mining. "Sulfide mining", as the phrase is used, refers to the fact that certain minerals - nickel, copper, gold and many others - are found only in geologies that naturally contain sulfide. The process of extracting rocks and their minerals from the earth is common and done for thousands of years.