12/15/2016 06:47 EST | Updated 12/16/2017 00:12 EST

Feds deny minerals lease renewals for NE Minnesota mine

MINNEAPOLIS — Two longstanding mineral rights leases that are critical for a proposed large underground copper-nickel mine upstream from the pristine Boundary Waters Canoe Area wilderness in northeastern Minnesota will not be renewed, two federal agencies announced Thursday.

The decision by the Department of Interior and the Department of Agriculture strikes a serious blow to the proposed Twin Metals project near Ely. The agencies also announced other steps to protect the Boundary Waters watershed from future mining projects.

In a statement, the agencies cited "broad concerns from thousands of public comments and input about potential impacts of mining on the wilderness area's watershed, fish and wildlife, and the nearly $45 million recreation economy."

Agriculture Secretary Tom Vilsack said in the statement that the agencies plan take a two-year "time out" to conduct a careful environmental analysis and engage the public on whether future mining should be authorized on any federal land next door to the Boundary Waters.

Interior Secretary Sally Jewell noted that the Boundary Waters is the most visited federally designated wilderness area in the U.S., with 150,000 visitors annually.

"This is the right action to take to avoid irrevocably damaging this watershed and its recreation-based economy, while also taking the time and space to review whether to further protect the area from all new mining," Jewell said in the announcement.

The leases were first issued in 1966 and last renewed in 2004 and would have allowed the company to mine copper, nickel and precious metals from the lands near southeast of Ely. Environmentalists objected because the metals are bound up in sulfide-bearing minerals that can leach sulfuric acid and other pollutants when exposed to air and water. The agencies said acid mine drainage would pose a significant risk to the Boundary Waters.

Twin Metals sued the federal government in September to force renewal of the leases. The company says it can mine without damaging the wilderness while creating hundreds of badly needed jobs in an economically struggling region of the state.

Ely is 250 miles northeast of Minneapolis.