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Mining company seeks payout for expected profits

Felicia Fonseca, Associated Press

FLAGSTAFF, Ariz. (AP) -- A uranium mining company that has staked hundreds of claims around the Grand Canyon said it is losing out on as much as $123 million in profits because of limits the U.S. has placed on more than 1 million acres that are rich in high-grade uranium ore reserves.

The Department of Interior instituted the 20-year ban on the filing of new mining claims last year following a temporary ban and said anyone with existing claims has to prove they already have a sufficient quantity and quality of uranium ore before any mining can occur. Then-Interior Secretary Ken Salazar said the intent was to protect the Colorado River through the Grand Canyon.

VANE Minerals LLC contended in a complaint filed last week with the U.S. Court of Federal Claims that the ban is an unconstitutional taking of property rights and wants it reversed. If the ban is declared valid, the company said it should be compensated between $68 million and $123 million for its expected profit loss and $8.5 million in damages for its investment so far.

"By ignoring both the science and the facts, defendants' actions have done nothing to protect the Grand Canyon watershed, have violated their statutory mandate to manage the land and to promote multiple use and sustained yield, and effectively deprived VANE of its investment in mining claims for uranium deposits," the complaint reads.

The Interior Department declined to comment.

VANE had intervened in two cases in U.S. District Court in Arizona that stemmed from the ban but withdrew so it could pursue the case with the U.S. Court of Federal Claims.

A U.S. District Court judge previously upheld the Interior Department's authority to ban new hard rock mining claims on federal land after mining advocacy groups sought to have the Federal Land Policy and Management Act declared unconstitutional. Other claims on environmental and economic impacts have yet to be heard.

Some 3,000 hard rock mining claims exist on the 1 million acres, but federal officials expect that fewer than a dozen uranium mines will materialize.

VANE holds 678 unpatented claims and says it wants to expand its exploration and locate more. The company said the 1872 mining law allows it to do so, but the Interior Department ban has frozen its development plans.

"What the BLM would reply is that if you have valid existing rights, we're going to let you exploit that valid existing right," said U.S. Bureau of Land management biologist Jeff Garrett. "But if you don't have that right, you have no rights."

Determining valid existing rights is a lengthy, expensive process that would be triggered by the filing of a plan or notice on BLM land, he said. The U.S. Forest Service requires the same review for claims on its portion of the land.

Roger Clark of the Grand Canyon Trust, an environmental group that has fought uranium mining in northern Arizona, said VANE's arguments are rare. He said the company should have established the validity of its claims long ago if it felt they would be economically viable.

"It's an outrageous claim and hopefully the claims court will see it is an outrageous attack on the federal treasury and rule accordingly," he said.