Texas-based Hydro Resources Inc (HRI), a subsidiary of Uranium Resources Inc., sustained a major blow to its effort to operate an underground injection uranium mine near Church Rock, New Mexico as a U.S. appeals court upheld a 2007 decision by the U.S. EPA that the land is Navajo Nation land.

The decision means that HRI will have to obtain its underground injection control permit from EPA rather the New Mexico Department of the Environment before it can move forward with its plans for in-situ leach mining.

The Navajo Nation has made it clear for several years that it is opposed to companies that continue to seek to mine uranium on Navajo Nation lands, enacting a ban on uranium mining and milling in April 2005.Meanwhile, HRI had obtained a Nuclear Regulatory Commission license to mine uranium at the Churchrock project and had applied for a permit from the State of New Mexico. The project is located in the checkerboard area of northwestern New Mexico, called Section 8 land, and is defined by the federal Safe Drinking Water Act as Indian Country.

The 10th Circuit Court of Appeals in Denver upheld the EPA and the U.S. Department of the Interior decision that the Churchrock Section 8 uranium project is located in Indian Country within a dependent India n community.  The 10th Circuit decisions also may apply to other uranium mining states, including Colorado, Utah, and Wyoming.

Chris Shuey of Southwest Research Information Center told the Gallup Independent, This is a huge victory, and if upheld on further appeal will set precedent for regulating non-Indian activities on non-Indian lands inside dependent Indian communities.

Rick Van Horn, Uranium Resources Inc COO, said the company has not had time to review the decision. I think the one thing we need to re-emphasize is regardless of the ruling, we are committed to going forward with mining and doing business in New Mexico.

Van Horn estimated that 70 million pounds of uranium reserves are known to exist on the Navajo Reservation.  HRI required its Churchrock land from the United Nuclear Corporation, also purchasing UNC's patents for uranium-mining claims on the Section 8 land.

The city of Gallup is located 11 miles southwest of the Section 8 land, while the Navajo town of Church Rock is six miles south of the land. The Section 8 land is not located within the Navajo reservation, but is within the jurisdiction of the Eastern Navajo Agency.

The appeals court denied HRI's petition for review, but granted the National Mining Association's motion to file a friend of the court brief on the matter, as well as the State of New Mexico's motion to file a reply brief to the decision.

In a dissenting opinion, however, Justice D.J. Frizzell said he believes the appeals court has no standing to overrule the Nuclear Regulatory Commission decision.  Frizzell said the land is not owned by the Navajo Nation. It is not set aside for Indian use. It is not federally superintended.