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Policy: Environment & Energy

Schweitzer mining dispute claim goes forward

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News,Business,Montana,Energy and Environment,Mining

BILLINGS, Mont. (AP) — An expert commission will decide on a $10 million compensation claim from former Montana Gov. Brian Schweitzer and other investors in a dispute involving a proposed silver mine, under a federal judge's ruling that said the size of the claim was "more than suspect."

Schweitzer is a director in Optima Inc., a company with mining claims, or rights, that stand in the way of the Montanore silver and copper mine near Libby proposed by Mines Management Inc.

U.S. District Judge Dana L. Christensen issued a preliminary condemnation order on those mining rights in April, making Optima eligible for compensation and prompting it to file the $10 million claim.

Mines Management's had been seeking to throw out the claim, which the company's chief executive has called a "shakedown."

Christensen denied the request to block the claim in an Aug. 12 order. But he called the $10 million amount into question, writing that the "amount and basis for the statement of claim are more than suspect."

The judge said the question of just compensation would best be determined by a commission of experts rather than a jury.

In a Friday interview with The Associated Press, Schweitzer downplayed the significance of the judge's skepticism about the size of the claim. He said his side would present evidence to back up its claim during the upcoming condemnation proceedings before the commission.

"Where we are in this case right now is the court just has affirmed that (Optima) has legitimate mining claims. In order for Mines Management to proceed there will be condemnation proceedings, at which point there will be a value put on the condemnation," he said.

Schweitzer is a former two-term Democratic governor who became chief executive of Billings-based Stillwater Mining Co. after leaving office last year. Stillwater is not involved in the Montanore claims.

The Montanore mine holds an estimated 1.7 billion pounds of copper and 230 million ounces of silver beneath an area that includes the Cabinet Mountains Wilderness, according to Mines Management.

The Spokane, Washington-based mining company turned down a March offer from Schweitzer to resolve the claims dispute outside court in exchange for cash and stock worth about $10 million. CEO Glenn Dobbs alleges Schweitzer threatened to drive down the company's stock if it didn't give his group a favorable deal, a charge Schweitzer has denied.

Dobbs said Friday that Christensen's ruling showed the court recognizes that the claim from Schweitzer and his fellow investors is "clearly motivated by personal greed."

Other members of Optima include Bruce Ramsey, a former U.S. Forest Service supervisor for the Beaverhead-Deerlodge National Forest and mining industry veteran Frank Duval, and Arnold Bakie, the man who originally controlled the mining claims

"They have nothing of value," Dobbs said in an email to The AP. "The court recognizes the entire affair and grandstanding by Schweitzer/Duval are aimed at attempting to gain an advantage for purposes of getting money from our company."

Schweitzer said Dobbs was mischaracterizing the facts in the case, which he said began when Mines Management sued Bakie so the company could move forward with its mine.

"In every step along the way, Bakie has been the defendant, not the other way around," Schweitzer said.

The company still needs approval for the project from government regulators. A permit decision by the U.S. Forest Service and other agencies is targeted for 2015.

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