Schweitzer mining dispute claim goes forward, but judge questions $10 million in compensation

IndustrialsAssociated Press

An expert commission will decide on a $10 million compensation claim from former Montana Gov. Brian Schweitzer and other investors in a mining dispute, 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 a silver and copper mine near Libby proposed by Mines Management Inc.

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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 it 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.

The Montanore mine holds an estimated 1.7 billion pounds of copper and 230 million ounces of silver beneath 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.

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.