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Spotlight: Montana’s Black Butte Copper Project

These (new infrastructure) projects can change the trajectory of generations, and without community benefits frameworks there would be no way to reflect on the significance of this inflection point.
—Jackson Rose, Montana State University

The “Spotlight Story” panel focused on the Black Butte Copper Project in Montana, about 15 miles north of White Sulphur Springs in Meagher County. The project, led by Sandfire Resources, is the first copper mine in Montana that has been permitted in more than 40 years. The project faced mixed reactions and divided opinions in the local communities due to its proximity to the Smith River. However, a community benefits agreement (CBA) was ultimately agreed on and was in the final stages of approval at the time that this workshop was convened. This panel spotlights the CBA negotiation from the perspective of the developer and a community member.

Mark Haggerty, a senior fellow at the Center for American Progress and a Montana resident, moderated the panel. The panelists included Jackson Rose and Nancy Schlepp. Rose is a faculty member at Montana State University in the Geography Department. Before that, he was the executive director of the Meagher County Stewardship Council, a local coalition that was organized around negotiating a CBA with the mining company for the Black Butte Copper Project. Schlepp is the vice president of communications and government relations at Sandfire Resources America, the associated mining company. Schlepp has also previously served in an elected position as the Meagher County Commissioner.

DELIVERING COMMUNITY BENEFITS IN RURAL AMERICA

Haggerty introduced the Black Butte Copper Project as a great case study of how a community benefits framework can help those in rural communities. Rose noted that he first began working on this project as part of his master’s thesis at Montana Stata University and looked specifically at non-regulatory agreements between community groups and mining companies. He began by looking at

mining industry examples in Australia and Canada to understand how such agreements could be used to confer lasting benefits beyond the life of mining projects. His first case study in Montana was White Sulphur Springs. The lifetime of the project was about 8 to 10 years. Hence, they had a limited window to deliver long-term benefits to the community. The timeline, combined with the boom-bust cycle of the mining communities, spurred Schlepp and Rose to work together on a community benefits framework and CBA.

Schlepp explained that the Black Butte Copper Project is an underground copper mine—the first of its kind to be permitted in Montana in 40 years. She commented on her strong roots in the region and her love for the community. She and her company believed that this project would allow them to hire locally and work with those who share a similar mindset. They used a good neighbor agreement (see Box 1-1) from Sibanye-Stillwater as a prototype for their project. Sibanye-Stillwater is an international precious metals mining company with a diversified portfolio that includes being the largest primary producer of platinum, palladium, rhodium, and gold, and a producer and refiner of iridium and ruthenium, nickel, chrome, copper, and cobalt, To address the community benefits associated with the Black Butte project, Sandfire Resources helped start the Meagher County Stewardship Council, composed of 60 percent community members from the county and 40 percent conservation voices from around the region.

Schlepp continued that Montana is a great state to change the paradigm of how we think about natural resource projects because of the many legacy cleanup issues in the state; therefore building trust would be a critical element. Sandfire Resources began its process of trust-building by making data transparent and available for the community to access and paying attention to diversity and equity within the company. It has a 40 percent female workforce, which is uncommon in natural resource companies. To get to this point, providing childcare and housing were important segments of its community benefits framework.

Schlepp recognized the Hard Rock Mining Impact Act of Montana as being critical for the project and the success of the community benefits process. The act is unique to the state and recognizes mining and the production of minerals as activities that are beneficial to the state’s economy when conducted in a way that protects the environment from degradation and ensures proper reclamation of mined land.

The Role of States

Haggerty continued that CBAs and community benefits plans (CBPs) are not happening in vacuums. While federal policies are important, the state context is also fundamental to delivering benefits to communities. He noted that some states are not very supportive of communities; however, Montana is. He asked the panelists to elaborate. Rose re-emphasized the Hard Rock Mining Act, calling it

“a pretty unique and progressive law.” Legally, developers are required to work with local government units and design an impact plan during the permitting process and before the project has started. This process starts at the planning stage, wherein there are no tax revenue impacts, but projects begin to impact community services, like emergency services, and local infrastructure. Rose also highlighted that the law entails that companies must engage in building trust through public education.

Haggerty asked Schlepp to detail why the Sibanye-Stillwater project was a good example for the Black Butte Copper Project and noted that the former changed hands five times since it has been in operation. He also asked her to comment on what it takes to get a company to be ready to negotiate and how that momentum can be sustained. Schlepp highlighted that it is key that in projects that may change hands a few times, the CBA must be centered on the property and not on the owner, to ensure that no matter who owns the project, the benefits will last through the end of the mine life. She noted that community benefits were at the top of her company’s priorities and have been a guiding principle for its board throughout the project.

On being asked about the outlines of the agreement, Schlepp continued that an important aspect of the good neighbor agreement (see Box 1-1) on the environmental front is the provision for third-party testing. This allows the board of the Meagher County Stewardship Council to bring in a consultant and test at any point in the project to make sure the company is doing what it is claiming. She added that her company pays for that, detailing the provisions. Currently, money paid by Sandfire Resources is available to the council, which can use it as it wants to. At the same time, Sandfire Resources is developing an economic development fund to diversify the community in preparation for when the mine closes. According to Schlepp, Sandfire Resources thinks of this fund as a way to deliver benefits for the next three generations, or over the next 100 years. The company is also developing funds to support youth programs and a long-term foundation that will operate even after the mine closes.

Haggerty noted that this could potentially serve as a long-term leverage point. He then asked Rose to comment on what the negotiations have meant for the community and the other lasting benefits they have led to. Rose said, “broadly, in rural places, there is often a lack of support or resources for community planning. So, I think this whole CBA process has forced community members to ask themselves, what do I want my community to look like in 20 or 30 years?” To enable a peer-to-peer learning opportunity, the Meagher County Stewardship Council brought members of other similar communities to work with them and build social capital. This was crucial because public hearings held by a regulatory agency do not allow for such conversations. Moreover, in a rural community where there are only 2,000 people spread over 2,000 square miles, large industrial projects have an outsized impact on the economy and people’s lives. These projects have ripple effects on related industries like tourism, recreation, and the

environment. They are also inflection points that can change the trajectory of generations through cumulative impacts. Developing a community benefits framework provides an opportunity and avenue to reflect on the significance of these inflection points and for the community to make decisions about its future.

The Role of Local and National Organizations

Next, Haggerty commented that sometimes developers bypass the local community and enter into agreements with either a national environmental organization or some other community that has more power and resources. He asked Schlepp to comment on how developers can stay focused on working with the local community and navigate the pressures from different levels of the community, including litigation. Schlepp noted that Sandfire Resources focuses on projects that fit the community. Sometimes it is important to have the pressure of litigation to make the projects better. She continued that if the Meagher County Stewardship Council chooses to have a national organization on its board in the future, Sandfire will be fully supportive of its decision.

The Role of Academia and Philanthropic Organizations

Haggerty continued that, due to the rural setting of the project, much of the capacity to plan and build the project came from external sources. For example, Rose was trained at Montana State University and was able to support the Meagher County Stewardship Council. Moreover, the project received funding from a statewide nonprofit that was trying to convene conversations about community benefits. He asked the panel about the importance of support from experts in academia and philanthropic organizations in the negotiations. Rose elaborated that the experts provided capacity in terms of time, advice on matters outside of regulatory requirements, legal counsel resulting in a robust framework, and a legal contract that will survive ownership transitions and serve generations of the community. Schlepp concluded the panel by reiterating that bringing in community members early in the process helped them synergistically build on the wealth of knowledge in their community.