Copper producer Antofagasta has impaired the full carrying value of its Twin Metals project, which was dealt a serious blow last month when the US federal government cancelled the long-held leases for the group’s proposed copper and nickel mine near Minnesota’s Boundary Waters region.
The Chilean mining company stated in its full-year results announcement on Tuesday that while it believed Twin Metals had a valid legal right to the mining leases and a strong case to defend its legal rights, it had decided recognise an impairment of $177.6-million relating to the projectd, given the time and uncertainty related to any legal challenge to the government decisions.
President Joe Biden’s administration on January 26 cancelled two leases – MNES-1352 and MNES-1343 – which form a significant proportion of the mineral resources contained within Twin Metals’ current project plant. Antofagasta said that it was determined that the cancellation represented an impairment trigger.
The leases had been pulled by then-President Barack Obama’s administration in 2016, but that decision was reversed by his successor's administration. However, US Interior Secretary Deb Haaland said in January that her department found that the leases were “improperly renewed”.
Last week, the Minnesota Department of Natural Resources notified Twin Metals that it had stopped work on the state’s environmental review, given the cancellation of the federal leases associated with the project.
The DNR’s letter to Twin Metals also highlighted concern about the location of the proposed tailings facility of the project.
The DNR stated that it would close the administrative record and redirect staff resources to other high priority projects.