26 / 111
25
They also can impose substantial liability for the costs of removal or remediation associated with such
discharges. The CWA also regulates stormwater handling at mining facilities, requires a stormwater
discharge permit for certain activities, and requires the implementation of a Stormwater Pollution
Prevention Plan establishing best management practices, training, periodic monitoring of covered
activities, and monitoring and sampling of stormwater run-off. The CWA and regulations
implemented thereunder also prohibit discharges of dredged and fill material in wetlands and other
waters of the United States unless authorized by a permit issued by the U.S. Army Corps of Engineers.
The Safe Drinking Water Act (“SDWA”) and the Underground Injection Control (“UIC”) program
promulgated thereunder regulate the drilling and operation of subsurface injection wells. The EPA
directly administers the UIC program in some states, and in others the responsibility for the program
has been delegated to the state. Violation of these regulations and/or contamination of groundwater by
mining related activities may result in fines, penalties, and/or remediation costs, among other sanctions
and liabilities under the SDWA and state laws.
The Endangered Species Act (“ESA”) regulates activities that could have an adverse effect on
threatened and endangered species, including the habitat and ecosystems upon which they depend.
The ESA protects threatened and endangered species primarily by prohibiting the unauthorized
“taking” of listed species. The ESA also requires consultation with other agencies in certain
circumstances. Compliance with ESA requirements can significantly delay, limit, or even prevent the
development of projects, including the development of mining claims, and can also result in increased
development costs. In addition, civil and criminal penalties for violations of the ESA are provided,
and citizen suits against any person alleged to be in violation of the ESA are authorized.
Regulations and pending legislation governing issues involving climate change could result in increased
operating costs that could have a material adverse effect on our business.
Climate change has become an important topic in public policy debate. It is a complex issue, with some
scientific research suggesting that rising global temperatures are the result of an increase in greenhouse gases
(“GHGs”). A number of governments or governmental bodies have adopted or are contemplating regulatory
changes in response to the potential impact of climate change. For example, the EPA has issued a notice of finding
and determination that emissions of carbon dioxide, methane, and other GHGs present an endangerment to human
health and the environment, which has allowed the EPA to begin regulating emissions of GHGs under existing
provisions of the Clean Air Act. Legislation and increased regulation regarding climate change could impose
significant costs on us and/or our suppliers, including costs related to increased energy requirements, capital
equipment, environmental monitoring and reporting and/or other costs to comply with such regulations. Any
adopted future climate change regulations could also negatively impact our ability to compete with companies
situated in areas not subject to such regulations. Given the political significance and uncertainty around the impact
of climate change and how it should be dealt with, we cannot predict how legislation and regulation will affect our
financial condition, operating performance or ability to compete.
Even without such regulation, increased awareness or any adverse publicity in the global marketplace about
the mining or rare earth industries’ potential impacts on climate change could harm our reputation. The potential
physical impacts of climate change on our operations are highly uncertain and would be particular to the geographic
circumstances in areas in which we operate. These may include changes in precipitation, storm patterns and
intensities, water shortages and changing temperatures. These factors may have an adverse impact on the cost,
production or financial performance of our operations.
We depend on key personnel, and the absence of any of these individuals could adversely affect our business.
Our success is currently largely dependent on the performance, retention and abilities of our directors,
officers, employees and contractors. The loss of the services of these persons could have a material adverse effect
on our business and prospects. There is no assurance that we can maintain the services of our directors, officers,
employees, contractors or other qualified personnel required to operate our business. Failure to do so could have a
material adverse effect on us and our prospects. We do not maintain “key man” life insurance policies on any of our
officers or employees.