Mining companies have long recognised the need to accommodate local communities as part of their "social licence to operate."  However, in the rush for domestic critical minerals development, as regulatory processes become more burdensome and opposition from mining opponents grows, the need for sophisticated accommodation strategies is increasingly clear. 

Companies are learning to de-risk projects by negotiating formal agreements with local stakeholders to address socio-economic, environmental, and cultural concerns, gain community support, and reduce the threat of legal challenges.  The most effective agreements are often those concluded prior to or outside the regulatory process.

The Traditional Good Neighbor Playbook

Community engagement is nothing new for mining companies.  At the most basic level, companies donate to local youth baseball teams and libraries, provide scholarships, sponsor open houses, and engage local media about mining's benefits.  Companies also commonly stage job fairs and provide training opportunities to support the mine's workforce requirements.  Where environmental or cultural concerns arise outside the regulatory framework, companies often work with communities to find solutions.  However, these actions are largely discretionary.  Some companies use them effectively, while others choose to avoid any discretionary engagement at all.  Historically, the latter approach has contributed to devastating legacies, such as contamination left by uranium mining around Navajo Nation communities, and eroded trust in the mining industry in general.[1]  

Of course, not all engagement is discretionary.  Regulations that require significant governmental action, such as permitting and leasing, require government agencies to issue public notices and solicit public comments during review and approval processes.  At the federal level, the National Environmental Policy Act (NEPA) requires federal agencies to solicit public comments and consult with local, tribal, and state governments on environmental, socioeconomic, and cultural concerns.  Meanwhile, the National Historic Preservation Act (NHPA) similarly requires federal agencies to consult with local, tribal, and state governments.  There are also a plethora of state-level statutes and local zoning ordinances that mandate community engagement. 

The Case for Community Agreements Outside the Regulatory Process

Although regulation-induced engagement serves its purpose, it inserts government agencies as intermediaries between the companies and stakeholders.  This may be useful in certain circumstances and an impediment in others.  That is, an agency might serve as a neutral deal-broker in the best cases and a disinterested arbiter in others, where neither the company nor the community are satisfied.  Further, once subsumed in regulation, companies lose control of the process.  The control of time and cost moves to the regulator, and the process itself can give birth to and nurture project opposition.  For these reasons, there may be benefits to engaging the community early, without a regulatory intermediary.  Adopting a community engagement approach to mitigate project risks and streamline regulatory processes could prove most effective when supported by formal agreements.  

The main benefit of a formal negotiated community agreement is that it invests both sides in the outcome.  That is, despite best efforts, mining companies that rely on discretionary action alone might not always get things right.  Rather, it may be better to bring a community or tribe to the negotiating table in order to sharpen understandings, needs, and trade-offs for all parties. 

To that end, companies could consider opportunities ranging from community benefit agreements (CBAs) to cultural resource stipulations (CRSs).  The goals of these community agreements are equity and sustainability (environmental, socioeconomic, and cultural), leading to community support.  Examples are discussed below. 

CBA: Sibanye-Stillwater

Sibanye-Stillwater owns palladium-platinum operations near the towns of Nye and McLeod, Montana.  Local residents grew concerned in the mid-1990s when the company began planning a new tailings facility at an existing mine, Stillwater, and permitting for a new mine, East Boulder.  Recognising the high cost of litigation, these residents organized with the help of the non–profit Northern Plains Resource Council and its affiliates (NPRC) and approached the company to negotiate accommodations.  The resulting Good Neighbor Agreement (GNA), a form of CBA, was signed between the company and NPRC in 2000.  There has been no environmental litigation since then.[2] 

The GNA provides for a Good Neighbor Oversight Committee that meets three times annually and a Technology Committee and other working groups that meet as necessary.  One working group reports weekly on water quality projects and issues.  While water quality is perhaps the central issue, the GNA also addresses traffic and signage on local roads, long–term tailings storage design, and emergency procedures, some of which includes collaboration with regulators.  The company, through the GNA, funds mining and water experts to advise the group.  

Importantly, Sibanye-Stillwater uses the GNA oversight bodies to solicit comments and modify mine plans and permit applications prior to the formal regulatory comment period.  The company believes this has streamlined the regulatory process, by "reduc[ing] permitting delays and largely eliminat[ing] negativity during public comment periods."[3] 

CBA: Lithium Americas

Lithium Americas is developing a greenfield mine at Thacker Pass in northern Nevada, approximately 40 miles from the Fort McDermitt Indian Reservation, which is home to the Western Shoshone and Northern Paiute tribes.  The company signed a CBA with the Fort McDermitt joint tribal government in 2022, following a 2021 final decision by the Bureau of Land Management (BLM) to permit the project. 

According to the company, the CBA "establishes a framework for continued collaboration" with the Fort McDermitt tribes and "seeks to define the long-term benefits for the tribes."[4]  Leading to and after signing the CBA, Lithium Americas provided over 50 job training sessions for operating heavy equipment, agreed to hire tribal members, completed a Cultural Technical Report with oversight and assistance from tribal members, and agreed to build a community centre, among other things.[5]  

Where the Fort McDermitt reservation generally appears to support the project, other groups of Shoshone and Paiute at the Reno-Sparks Indian Colony ("Colony"), 280 miles from the project site, oppose development.  The Paiute and Shoshone tribal members living at the Colony are concerned about the project disturbing the site of an 1867 US Cavalry massacre of tribal members.  The Colony sued BLM under NHPA for failing to solicit or consider comments from the Colony during the required tribal consultation and public comment period.[6]  The Colony's claim failed because of its distance and because it had previously expressed no interest in the site during BLM solicitation under a different matter.  The court therefore found that BLM's failure to contact the Colony was reasonable and complied with NHPA.  The Colony's fellow plaintiffs in the case consisted of environmental groups and ranchers who argued that BLM's NEPA environmental analysis was inadequate.  That claim also failed.  

Mine development is currently underway, although tribal opposition continues to receive national media attention.  Unlike the Sibanye-Stillwater experience, Lithium Americas did not escape litigation, although it prevailed in the multi-pronged legal challenge.  Perhaps the company's focus on Fort McDermitt to the exclusion of the Colony and ranchers led to the tribal litigation that occurred.  Once allied with environmental groups, the Colony was committed to opposing the project, even disregarding the Technical Cultural Report overseen by their tribal relatives at Fort McDermitt and any mitigations offered by the company.  It is unknown whether early outreach to the Colony and their inclusion in the CBA might have made a difference.  

CRS: Cloud Peak Energy Inc. (CPE)

CPE owned the Spring Creek mine, a large coal operation in Montana located three miles outside the southern edge of the Crow Indian Reservation ("Reservation").  In 2012, CPE and the Crow Tribe executed an agreement giving CPE the option to lease coal on the Reservation under the auspices of the Indian Mineral Development Act of 1982 (IMDA).  The Bureau of Indian Affairs (BIA), exercising powers delegated by the Secretary of the Interior, subsequently approved the option agreement.  However, approval of the coal mineral lease that was attached to the option agreement was conditioned upon compliance with NEPA, which would only be triggered upon CPE's option exercise.  With these approvals and conditions, CPE promptly commenced exploration work on the Reservation, as well as environmental and cultural resource surveys. 

CPE's project risk was mitigated in several ways.  First, the Crow leased coal to another mine on the northern edge of the reservation and benefited from coal taxes, royalties, and employment.  As a result, the tribal community generally supported coal mining.  Second, the optioned Crow coal on the southern edge of the reservation could be developed as satellite pits to the Spring Creek mine, using existing plant, equipment, and rail loading infrastructure, all of which reduced capital risk.  Third, the five–year option period afforded CPE the opportunity to complete environmental and cultural work in advance of the NEPA and NHPA regulatory processes.  

The option agreement provided annual payments to the Crow Tribe, scholarships, employment at a local CPE project office, and provisions for cooperation on cultural resources (i.e., artifacts and landscapes of interest). On the latter, the Crow Tribal Historic Preservation Office (THPO) took the lead, supported by CPE personnel and funding, to survey the project area and inventory cultural resources.  THPO consulted with the Crow Cultural Committee and sought advice from Crow elders on the significance of the items found.  Upon the conclusion of the survey, CPE executives and Crow officials toured the site together, inspecting medicine wheels, eagle catches, arrowheads, and petroglyphs.  

The company's position was simple: only the Crow could determine the importance of their cultural resources and therefore the Crow needed to declare which areas were mineable and which were unmineable and, further, how artifacts in mineable areas would be managed. 

The option agreement provided for these declarations in advance of CPE's option exercise.  However, coal not mined would mean lower revenue for the tribe.  Further, too many restrictions on mining could imperil the project.  The Crow ultimately restricted mineral development from occurring in and around a sandstone butte covered in petroglyphs, while the surrounding minable areas and the artifacts found there were subject to a TERO cultural resource management plan (which included artifact categorisation by importance, the disposition of collected artifacts, provisions for further studies, and other mitigations to protect, curate, and preserve artifacts).   

These understandings were formally memorialized in a CRS signed by CPE's chief executive and the Crow Tribal Chairman.  "Stipulations" are a form of memoranda of understanding often used by federal agencies under NHPA.  An agency might, for example, sign a stipulation with a local historic preservation society to mitigate adverse impacts on traditional cultural properties.  The CRS was therefore rooted in NHPA vernacular while presenting something new—an agreement outside the federal regulatory process. Critically, the CRS provided that the Crow Tribe's comments for the pending NEPA and NHPA processes would be consistent with the findings, inventory, understandings, and agreements in the CRS. 

Benefits for CPE included greater confidence in both project economics and tribal support in advance of triggering the option and commencing the regulatory process.  Unfortunately, softening coal market conditions drove CPE into bankruptcy prior to exercising the option; but the company had anticipated the CRS would streamline NEPA and NHPA, saving time and money.  

This is not to say the CRS reduced risk to zero.  It remained possible, though unlikely, that future Crow government officials could provide NEPA and NHPA comments counter to the CRS, despite the CRS being a legally binding document.  The Crow Tribe is, after all, a sovereign political entity and not a business.  Although the option agreement contained a limited waiver of sovereign immunity and federal arbitration for disputes, BIA would be hard pressed to ignore any negative tribal comments.  Further, the CRS could not preclude negative comments from individual Crow tribal members, who were not otherwise speaking on behalf of the tribe. The CRS also did not cover neighboring tribes, such as the Northern Cheyenne, who have opposed coal development.  On balance, however, the terms of the CRS were dictated by the Crow Tribe for addressing cultural resources on their Reservation, which would most likely have led to favorable NEPA and NHPA outcomes. 

Active Engagement:  Resolution Copper

Resolution Copper proposes to develop one of the largest copper mines in the world, largely on lands to be transferred from the Tonto National Forest by the US Forest Service (USFS).  At the heart of these federal lands is a mountain referred to as "Oak Flat," which is held sacred by the local Apache tribe.  Resolution Copper is a joint venture between Rio Tinto and BHP, certainly two of the savviest and most well-organised companies when it comes to community relations.  Nevertheless, the project has been significantly delayed by litigation and political pressure.  

On March 26, 2024, the company announced the signing of a CBA with local municipalities, counties, and environmental groups.  There is no indication that local tribes are party to the agreement.  The CBA follows almost a decade of project development and NEPA compliance work as well as a recent court decision favoring the land transfer over a religious rights challenge.[7] 

Resolution Copper initially submitted a mine plan to USFS in 2013.  USFS initiated consultations with local governments and tribes in 2015 and commenced the NEPA process in 2016.  NEPA compliance is required to execute the land transfer.  Under USFS supervision, tribal monitors surveyed 61,000 acres in the project area, over 150 cultural baseline reports were prepared, and local tribes provided detailed management plans for handling artifacts.[8]  Although USFS led this process, Resolution Copper also "participated in hundreds of separate parallel engagements, including community working groups, to collect input to help shape the project."[9]  As a result of the NEPA and NHPA consultations, the company decided to reduce the land transfer area by 20%, set aside 142 acres of privately held land for preservation, and relocate the preferred alternative locations for tailings, pipelines, and power lines. 

Further, Resolution Copper has been active in the local communities, centered around the town of Superior.  The company organised a Community Working Group (CWG) with business, area leaders, and local organisations.  Among its activities, CWG provides water sampling.  The company further reports that it has funded $2.2 million since 2016 for community initiatives covering the environment, education, community, development, and arts and culture; $700,000 for scholarships, including tribal students; $1.2 million over four years to support STEM education in the local school district; $1.2 million for local COVID response; and a Tribal Monitor program to train 30 members from seven tribes to work alongside archeologists.  All or most of these areas appear to now be subsumed in the recently signed CBA. 

Despite these efforts and more, USFS has not yet issued a final environmental impact statement (FEIS) as required under NEPA.  Without a FEIS, the national forest lands cannot be transferred and no permits can be issued. The primary reason for the FEIS delay has been the religious rights lawsuit brought against USFS by a non–profit group, Apache Stronghold.  This legal challenge has so-far failed but could possibly be taken up on appeal by the US Supreme Court.  In response to Apache Stronghold's concerns about the destruction of Oak Flat, the Biden Administration asserted a "pause" on the FEIS by directing additional federal consultations with local tribes.  On top of this, the San Carlos Apache Tribe and certain environmental groups are likely to pursue litigation against the FEIS, if it is ever released, on the grounds of incomplete NEPA environmental analysis.[10]  

Resolution Copper first submitted a mine plan to USFS more than 10 years ago and has reportedly spent over $2 billion to date.[11]  This has been a high-value, high-risk project, with opportunity for retrospection.  Did the company fully understand the sensitivity of Oak Flat from the outset?  Was it a deliberate decision to defer to USFS as the lead with the local tribes?  Could it have been possible to negotiate a CBA or CRS ahead of the NEPA process to accommodate mining of a site considered by tribal members to be their "Mount Sinai?"[12] 

Conclusions

Broad community engagement, established at the company's discretion, retains a key place in any strategy to engender community support.  However, CBAs and CRSs are more targeted and can be more effective in reducing project risk, as well as reducing the time and costs attendant with regulatory processes.   To be sure, the discretionary community approach sets the stage for negotiating agreements by building trust and awareness; however, it is the community's ability to negotiate on its own behalf, and not through the intermediary of a government regulator, that delivers the best equity, sustainability, and support.  Direct negotiation empowers communities, positioning them as active partners in mineral development that affects their rights and interests. This is particularly important for tribes, where respect for culture and sovereignty especially matters.  The positive experiences at Sibanye–Stillwater and CPE attest to this.  Even Lithium Americas, though it had to address litigation, is benefitting from the CBA negotiated with the Fort McDermitt reservation. 

Intertwined with self–determination are the benefits of partnership, where something is gained for something lost.  In the CPE example, the Crow Tribe controlled the coal on their reservation and would collect production taxes and royalties equivalent to about a quarter of all mine revenue.  Tribal members were therefore supportive and willing to negotiate measures allowing for the disturbance and protection of their cultural resources.  The tribe weighed the loss or disturbance of cultural resources against tribal economic wellbeing.  The situation is flipped at Resolution Copper.  There, the tribes do not control their sacred site, which is on national forest land, and did not negotiate a formal agreement with the company. 

Against their loss, which they did not agree to, they have little to gain. Granted, no amount of compensation or other negotiated benefit may adequately make-up for their loss of Oak Flat.  Nevertheless, in an age where domestic mineral development is needed to achieve clean energy transition and U.S. energy security, fostering partnerships with tribes and local communities through contractual agreements could be leveraged as one tool to reduce conflict, and hopefully thereby reduce harm and improve equity.   

Todd A. Myers is Principal for Leviathan Advising, LLC.  He was previously Senior Vice President-Marketing & Business Development for Cloud Peak Energy Inc. and, prior to that, held a similar role at Westmoreland Coal Co.  In those roles, he negotiated several agreements with the Crow Tribe of Indians, managed corporate relations with the Crow and Northern Cheyenne tribes.  In a prior consulting role, he provided litigation support to the Navajo Nation in a royalty dispute.  Mr. Myers holds a Master of International Management from the Thunderbird School of Global Management and is a Master of Legal Studies candidate in the Global Natural Resources, Energy, and Environmental Law program at the University of Denver's Sturm College of Law. 

Solène Crawley is a 2024 juris doctorate candidate at the University of Denver's Sturm College of Law.  She is the 2023–2024 President of the Natural Resources and Environmental Law Society (NRELS), and a Squire Patton Boggs Fellowship Alumni.  

Notes