Antofagasta Denied Permission to Renew Two Minnesota Licenses -- Update

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By Olga Cotaga and Ian Walker

LONDON--Antofagasta PLC (ANTO.LN) said Friday it has been denied permission to renew two of its long-held federal mining leases in the iron range region of north-eastern Minnesota.

The company said its fully owned Twin Metals Minnesota LLC was in the early stages of a proposal for an underground copper- and nickel-mining project.

Antofagasta didn't give any reason why its request was denied but the U.S. Department of Agriculture cited the potential risk of environmental contamination of the surrounding watershed as a key concern.

The department said the two leases, initially issued in 1966 and then renewed in 2004, would have allowed for the mining of copper, nickel, and associated minerals from the leased lands. However, it said no mineral production has occurred on either lease since the original date of issue.

"Denial of the leases is inconsistent with federal law, the terms of leases themselves and the federal government's established precedent in supporting and renewing the leases over five decades," the company said.

"Twin Metals is committed to progressing the project and will continue to pursue legal avenues to protect its contractual mineral rights," its added.

The two leases are located directly adjacent to, and within three miles of, the Boundary Waters Canoe Area Wilderness, an area in northeastern Minnesota comprised of more than a million acres of lakes and forests.

"It is well established that acid mine drainage is a significant environmental risk at sulfide ore mine sites like the one proposed for these leased lands and in a water-based ecosystem like the Boundary Waters because contaminated water could have dramatic impacts to aquatic life, sport fisheries, and recreation-based uses and communities," the Agricultural department said.

Shares at 1250 GMT down 11 pence, or 1.61%, at 672.5 pence.

Write to Ian Walker at [e-mail]; @IanWalk40289749 and Olga Cotaga at [e-mail]

(END) Dow Jones Newswires

December 16, 2016 08:28 ET (13:28 GMT)

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