March 17, 2009
Major Cobalt Producer, Xstrata plc, Appeals Idaho Cobalt Project Record of Decision
Vancouver, B.C., March 17, 2009 - Formation Capital Corporation (“Formation”, FCO-TSX,)
that its wholly owned subsidiary, Formation Capital Corporation, U.S.
(the “Company”) has received from the United States Department of
Agriculture, US Forest Service, an appeal filed by Swiss based Xstrata
plc (Xstrata) through its 100% owned subsidiaries Noranda Mining Inc.,
Noranda Exploration Inc., and the Blackbird Mining Co. Ltd. Partnership,
in relation to the January 2009 Record of Decision (ROD) for the
Company’s 100% owned Idaho Cobalt Project (ICP) located in Lemhi County.
Xstrata, the sole appellant opposing the project, is a major exporter of
cobalt to the United States. According to information collected by the
European Commission in 2006, Xstrata controls approximately 85% of the
world’s high purity cobalt market. As the ICP is expected to produce
high purity cobalt, their actions appear to indicate they believe the
ICP is in direct competition with Xstrata. All attempts to contact
Xstrata executives have been unsuccessful to date. Glencore
International AG, who controls Xstrata, is reported to control over 40%
of the entire global cobalt market.
Xstrata owns the old Blackbird Mine site which has been impacted from
past mining practices and is undergoing restoration. The Blackbird Mine
is adjacent to the ICP. Xstrata is the minority stakeholder of the
restoration liability for the Blackbird Mine site. The majority
stakeholder of the restoration liability for the Blackbird Mine site did
not appeal the ROD. Xstrata’s appeal, as in their previous appeal,
states, among other things, that if the ICP is approved, Xstrata should
be relieved of their environmental obligations to meet water quality
standards in certain creeks emanating from their site.
“Most of the issues raised by Xstrata seek to address the adequacy of
the Final Environmental Impact Statement which has already been upheld”
said Preston Rufe, Environmental Manager for the ICP. He continued, “We
believe the Forest Service, having already seen Xstrata’s appeal last
fall, will move quickly to uphold and implement the ROD”.
Bill Scales, President of Formation Capital Corporation, U.S. further
commented “We don’t believe there were any new issues raised that would
affect the positive decision made by the Forest Service.”
The Idaho Conservation League, Boulder White Clouds Council, Earthworks,
and Western Mining Action Project (collectively, “NGOs”) had originally
commented unfavorably upon the ICP’s Draft Environmental Impact
Statement; however, none of the NGOs challenged the ICP ROD. Similarly,
the Shoshone-Bannock Tribes and the Nez Perce Tribe have been actively
engaged with the ICP, but neither Tribe chose to challenge the ICP ROD.
Thus, to summarize, the Federal permitting agencies most responsible for
protecting the environment at both the old Blackbird Mine and at the
ICP have approved the ICP ROD’s environmental protection measures. The
relevant NGOs and Tribes have chosen not to challenge the ICP ROD.
Finally, the majority stakeholder in the environmental liability
associated with the Blackbird Mine cleanup has chosen not to challenge
the ICP ROD.
Former Idaho Governor Cecil Andrus, a long time and well-known friend of
Idaho’s environment, has stated that, “By looking at the entirety of
the circumstances, and given Xstrata’s percentage control of the high
purity cobalt market, it does not take much imagination to understand
why Xstrata is seeking to prevent the ICP from entering production,
particularly when you consider that the persons and groups who would
normally feel compelled to oppose any irresponsible mining project have
chosen not to appeal the ICP ROD.” Governor Andrus has been on the
Board of Directors of Formation since 2007.
A second appeal from an individual, in favor of the ICP, but in
disagreement with certain specifics of the Forest Service’s ROD not
related to the Company’s Mine Plan of Operation, was also received by
the Forest Service.
Once in production, Formation’s Idaho Cobalt Project will provide the
United States with high purity super alloy grade cobalt metal required
for critical applications such as the construction of jet airplane
engines, land based turbines, catalysts for coal and gas to liquid
technology, and batteries used in hybrid and electric cars. At present,
the US is essentially 100% dependent on foreign sources for cobalt.
Formation Capital Corporation is dedicated to the principles of
environmentally sound mining and refining practices and believes that
environmental stewardship and mining can co-exist. The Company trades
on the Toronto Stock Exchange under the symbol FCO.
Formation Capital Corporation
Mari-Ann Green, C.E.O.
For further information please contact:
E.R. (Rick) Honsinger, P.Geo., V.P. Corporate Communications
Formation Capital Corporation, 1730 — 999 West Hastings Street, Vancouver, BC, V6C 2W2
Head Office: 604-682-6229, Investor Relations: Email: email@example.com
- Or visit our Web site at: formcap.com
The statements contained in this news release in regard to Formation
Capital Corporation that are not purely historical are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including Formation Capital Corporation’s beliefs,
expectations, hopes or intentions regarding the future. All
forward-looking statements are made as of the date hereof and are based
on information available to the parties as of such date. It is
important to note that actual outcome and the actual results could
differ from those in such forward-looking statements. Factors that
could cause actual results to differ materially include risks and
uncertainties such as technological, legislative, corporate, commodity
price and marketplace changes.
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News Release:March 25th, 2009, No Appeals Filed Against Formation's Idaho Cobalt Project NPDES Permit