San Carlos v. State/resolution

IN THE

SUPREME COURT OF THE STATE OF ARIZONA
SAN CARLOS APACHE TRIBE,
Appellant,

v.

STATE OF ARIZONA; ARIZONA WATER QUALITY APPEALS BOARD;
ARIZONA DEPARTMENT OF ENVIRONMENTAL QUALITY,
Appellees.
___________________
RESOLUTION COPPER MINING, LLC,
Intervenor/Appellee.

No. CV-22-0290-PR
Filed June 27, 2024

Appeal from the Superior Court in Maricopa County
The Honorable Sigmund G. Popko, Judge Pro Tempore
No. LC2019-000264-001
AFFIRMED

Opinion of the Court of Appeals, Division One
254 Ariz. 179 (2022)
VACATED IN PART

COUNSEL:

Christopher D. Thomas (argued), Diane M. Johnsen, Andrea J. Driggs, Janet
M. Howe, Perkins Coie LLP, Phoenix, Attorneys for Resolution Copper
Mining, LLC

Kristin K. Mayes, Attorney General, Jeffrey D. Cantrell (argued), Assistant
Attorney General, Arizona Attorney General’s Office, Phoenix, Attorneys
for Arizona Department of Environmental Quality
 SAN CARLOS V. STATE, ET AL.
Opinion of the Court

Alexander B. Ritchie, Justine Jimmie, Department of Justice, San Carlos
Apache Tribe; Bernardo M. Velasco (argued), Jana L. Sutton, Mesch Clark
Rothschild, Tucson, Attorneys for San Carlos Apache Tribe

Brian A. Cabianca, Squire Patton Boggs (US) LLP, Phoenix, Attorney for
Amici Curiae American Exploration and Mining Association, National
Mining Association, Arizona Mining Association, and Montana Mining
Association

JUSTICE KING authored the Opinion of the Court, in which CHIEF
JUSTICE BRUTINEL, VICE CHIEF JUSTICE TIMMER, and JUSTICES
BOLICK, LOPEZ, BEENE, and MONTGOMERY joined.

JUSTICE KING, Opinion of the Court:

¶1 Copper mining began at the Magma Copper Mine near
Superior, Arizona, over a century ago. In 1975, the United States
Environmental Protection Agency (the “EPA”) issued the mine its first
permit authorizing the discharge of water pursuant to the Clean Water Act,
33 U.S.C. §§ 1251–1389 (the “CWA”). See 33 U.S.C. § 1342(a) (tasking the
EPA with administering the National Pollutant Discharge Elimination
System (“NPDES”) permit program, which includes issuing permits that
authorize the discharge of pollutants when certain conditions are met).
The EPA later renewed the mine’s discharge permit every five to eight
years.

¶2 In 2002, the EPA delegated its administrative authority over
the CWA permit program to the Arizona Department of Environmental
Quality (“ADEQ”). See Approval of Application by Arizona to
Administer the NPDES Program, 67 Fed. Reg. 79629, 79630 (Dec. 30, 2002);
A.R.S. §§ 49-255 to -265. Thereafter, ADEQ periodically renewed the
mine’s permit, as required by the CWA.

¶3 In 2014, the mine’s owner, Resolution Copper Mining, LLC
(“Resolution”), completed construction of a new mine shaft (“Shaft 10”).

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Shaft 10 is a vertical excavation about thirty feet wide that descends nearly
7,000 feet underground. The issue before us is whether Shaft 10 is a “new
source” under the CWA. A “new source” is subject to the generally more
stringent new source performance standards under § 306 of the CWA, 33
U.S.C. § 1316. Based on the record before us, we conclude that the sinking
of Shaft 10 did not create a “new source” under the CWA. Thus, ADEQ
acted within its discretion when it issued the discharge permit renewal to
Resolution in 2017.

I. BACKGROUND

A. History And Development Of The Mine

¶4 In 1910–1911, Magma Copper Company (“Magma”)
purchased and began developing the mine to extract copper ore. Part of
Magma’s development included deepening an existing mine shaft (Shaft 1)
and constructing other underground workings, including additional mine
shafts (Shafts 2 through 8). A “shaft is the surface opening to the mine
which provides a means of entry to or exit from the mine for men and
materials, and for the removal of ore or waste from underground to the
surface. It may be vertical or inclined.” See EPA, Development Document
for Final Effluent Limitations Guidelines and New Source Performance Standards
for the Ore Mining and Dressing Point Source Category (“Development
Document”) 29–30 (Nov. 1982), https://www.epa.gov/sites/default/files/
2015-10/documents/ore-mining_dd_1982.pdf. The mine shafts were
used for a variety of purposes, including the removal of water to keep the
mine workings dry (a process known as dewatering) and ventilating and
improving air quality below the surface of the mine. Magma also installed
equipment at the mine, such as a local concentrator to process ore and a
smelter. In addition, the mining operation included underground tunnels
that connected the shafts and facilitated ore extraction.

¶5 The development of a mine may expand as new ore deposits
are located. In this case, as active extraction depleted copper ore in the
original area, Magma turned its attention to other exploratory efforts.
New copper-ore deposits were discovered, and Magma’s operations
consequently expanded in an eastward direction.

¶6 In 1971, Magma constructed Shaft 9 on non-contiguous
property located approximately two miles east of the original workings of

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Opinion of the Court

the mine. The purpose of Shaft 9 was to identify copper-ore bodies within
that area and improve access to ore.

¶7 Magma also constructed an underground tunnel extending
about two miles in length that connected the eastern portion of the mine
(including Shaft 9) with the western portion. This tunnel was known as
the “Never Sweat Tunnel.” Magma used the Never Sweat Tunnel to
transport copper ore from Shaft 9 to the western portion of the mine, where
extracted ore was processed and stored.

¶8 As mining operations continued depleting copper ore,
Magma began drilling underground exploratory holes in an effort to locate
new ore. Magma discovered some new copper ore near Shaft 9 but ceased
further exploratory drilling in 1982. With no operating pumps, Magma
allowed the underground workings to flood with infiltrating groundwater.

¶9 In 1989, Magma began the process of dewatering the mine.
Magma also resumed ore production and underground exploratory
drilling. The results of the exploratory drilling suggested the possibility
of undiscovered copper. In 1994–1995, Magma discovered a new, large
copper-ore body beneath the eastern portion of the mine (the “Eastern
Deposit”). Magma, however, did not extract copper ore from the Eastern
Deposit at that time.

¶10 In 1996, a new entity, Broken Hill Proprietary Company Ltd.
(“BHP”), acquired the mine, forming a wholly owned subsidiary, BHP
Copper, Inc. (“BHP Copper”). BHP Copper continued mining operations
from Shaft 9, depleting the remaining reserves in that area. BHP Copper
ceased mining operations but continued exploration efforts by drilling deep
holes in the area of the Eastern Deposit. In 1998, BHP Copper ceased all
operations and turned off its dewatering pumps, allowing the mine’s
underground workings to flood with water. In addition, some of the
underground workings at the mine were backfilled.

¶11 In 2001, BHP entered into an exploration agreement with an
entity that was a wholly owned subsidiary of Rio Tinto (collectively “Rio
Tinto”). Thereafter, Rio Tinto commenced a deep exploratory drilling
program focused on outlining the Eastern Deposit.

¶12 In 2004, Rio Tinto acquired a majority interest in the mine.

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Rio Tinto then formed Resolution as a joint venture with BHP’s successor,
BHP Billiton, to continue efforts aimed at extracting copper ore from the
Eastern Deposit. Beginning in 2005, Resolution resumed exploratory
drilling and conducted a study to assess viable methods of extracting
copper ore from the Eastern Deposit. Resolution also decided to construct
a new mine shaft and other support structures that would enable it to access
and study the Eastern Deposit. Through years of exploration efforts, it
was determined that the Eastern Deposit begins around 4,500 feet below
ground surface level and proceeds down to about 7,000 feet. It covers an
area of about one square mile, and the ore body is approximately 1,600 feet
in thickness.

¶13 From 2007 to 2009, Resolution began developing and sinking
Shaft 10. Shaft 10 is located about 300 feet from Shaft 9 in the eastern
portion of the mine. Shaft 10 descends nearly 7,000 feet underground; in
contrast, Shaft 9 descends roughly 5,000 feet. Shaft 10 is not drilled
directly into the Eastern Deposit. In 2014, Resolution completed
construction of Shaft 10 and its surface components, including a hoist and
structural supports that enable the transport of supplies to and from the
base of Shaft 10.

¶14 During Shaft 10’s construction, Shaft 9 was used for support
purposes (e.g., ventilation and dewatering underground mine workings).
Resolution plans to continue to use Shaft 9 for support but not for ore
extraction. 1

¶15 Around the time of Shaft 10’s construction, Resolution
performed other work at the mine: (1) rehabilitating and extending the
Never Sweat Tunnel; and (2) constructing a new cooling tower, additional
rock stockpiles, wash bays, and a mine water treatment plant.2 Resolution
used the Never Sweat Tunnel to transport development rock from its
activities to the western portion of the mine for storage and future
processing. Shaft 9 and the eastern portion of the mine remain connected
with the western portion of the mine via the Never Sweat Tunnel.

1 Resolution plans to extend Shaft 9 to about the same depth as Shaft 10 at
some point.
2 Resolution also has plans to build a concentrator at the western portion

of the mine, as well as another tunnel connecting the western and eastern
portions of the mine.
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¶16 Resolution uses Shaft 10 to explore and study the Eastern
Deposit, ventilate and dewater the underground workings, and transport
supplies. Shaft 10 also provides another point of entry and exit for
individuals working at the mine. Resolution has not used Shaft 10 or other
new features for the commercial extraction of copper ore from the Eastern
Deposit. Resolution uses preexisting infrastructure at the mine to support
Shaft 10’s functions. Resolution’s operation requires it to control
stormwater and other water used in the mining process, as well as remove
groundwater from the underground workings of the mine through
dewatering. To accomplish this, Resolution drains water from Shaft 9 to
the base of Shaft 10 and then pumps the water up to and through the Never
Sweat Tunnel to the western portion of the mine. From there, it is
combined with water that has been collected from Shaft 8, which is used to
dewater the western portion of the mine. Then, Resolution sends all
combined water west to the water treatment plant for treatment and
storage. 3

¶17 According to Resolution’s General Plan of Operations, after
water is treated at the water treatment plant, Resolution will attempt to
reuse the water internally for ore processing, dust suppression, equipment
washing, drinking water, cooling, or fire protection. In the event of excess
treated water, Resolution has a contract with the New Magma Irrigation
and Drainage District, thirty miles southwest of the mine, to pipe that water
to the irrigation district. If the irrigation district does not have capacity,
Resolution is authorized to pipe the treated water into a tributary that flows
into Queen Creek. To date, however, Resolution has not discharged any
water into Queen Creek; instead, it has sent all excess treated water to the
irrigation district. Although circumstances could change, Resolution
intends to continue sending its treated water to the irrigation district, rather
than discharging it into Queen Creek.

¶18 Many of the originally constructed shafts and tunnels are no

3 Resolution also captures stormwater runoff using a channeling system
that diverts the water to a specific area. From there, it can be pumped to
another location for evaporation or to the water treatment plant. The main
source of water sent to the water treatment plant is from dewatering the
underground mine workings, but small volumes of industrial water and
stormwater are sent as well.
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longer in operation or accessible. But Shaft 6 is used to ventilate the Never
Sweat Tunnel. And, as noted, Shafts 8 and 9 and the Never Sweat Tunnel
remain in use, and Resolution plans to continue their use. Resolution may
use other preexisting shafts in the future, but not other tunnels.

¶19 Resolution’s plan is to access the Eastern Deposit using a
technique called panel caving. This method involves cutting the rock
underneath the ore deposit, removing its ability to support the overlying
rock material and causing it to collapse into a collection zone. As the ore
is extracted from the bottom of the mine, the deposit will continue to
collapse in on itself, thereby continuing to replenish the extractable ore.
Occurring entirely underground, a series of conveyors, rail lines, tunnels,
hoists, and other equipment will then transport the ore from beneath the
deposit up and to the western portion of the mine for storage and
processing. This method differs from that previously implemented at the
mine through the use of adits and tunnels. See Development Document,
supra, at 29–30 (describing an “adit” as a “passageway or opening driven
horizontally into the side of a hill generally for the purpose of exploring or
otherwise opening a mineral deposit,” and it “is open to the atmosphere at
one end”); see also Development Document, supra, at 557.

B. The Distinction Between A “New Source” And “Existing Source”

¶20 We must determine whether Resolution’s sinking of Shaft 10
created a “new source” under the CWA. The CWA treats “new sources”
differently from “existing sources.” See 40 C.F.R. § 122.29(a)(3) (“Existing
source means any source which is not a new source or a new discharger.”).
A “new source” is subject to the CWA’s new source performance standards.
See 33 U.S.C. § 1316(a)(1) (defining “standard of performance” as “a
standard for the control of the discharge of pollutants which reflects the
greatest degree of effluent reduction which [the EPA] determines to be
achievable through application of the best available demonstrated control
technology, processes, operating methods, or other alternatives, including,
where practicable, a standard permitting no discharge of pollutants”); see
also Ore Mining and Dressing Point Source Category Effluent Limitations
Guidelines and New Source Performance Standards, 47 Fed. Reg.
54598–600 (Dec. 3, 1982) (referring to the standards as “new source
performance standards”).

¶21 “The classification of a facility as a new or existing source is

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important because under the CWA existing sources are subject to best
available technology (BAT) and best conventional technology (BCT)
requirements, while new sources are subject to the generally more stringent
new source performance standards . . . under section 306 of the CWA.”
NPDES Permit Regulations, 49 Fed. Reg. 37998, 38043 (Sept. 26, 1984). The
distinction between a “new source” and an “existing source” “is based on
the concept that new facilities have the opportunity to install the best and
most efficient production processes and wastewater treatment
technologies.” Id.

C. Water Discharge Permits

¶22 Since the CWA began requiring discharge permits, all past
and present owners of the mine have obtained the necessary permit and
permit renewals to discharge water from the mine. The permit renewal at
issue here is the “Authorization to Discharge under the Arizona Pollutant
Discharge Elimination System,” which ADEQ issued to Resolution on
January 19, 2017 (Permit No. AZ0020389) (the “2017 Permit Renewal”).
The 2017 Permit Renewal became effective on January 23, 2017 and expired
on January 22, 2022.

¶23 The 2017 Permit Renewal subjected Resolution to certain
requirements for purposes of complying with the CWA’s water quality
standards. If Resolution complied with such requirements, the 2017
Permit Renewal authorized Resolution

to discharge mine site stormwater runoff from Outfall 001 and
treated mine water, industrial water and seepage pumping
from Outfall 002 from the Superior Operations in Pinal
County, Arizona to an unnamed wash, tributary to Queen
Creek in the Middle Gila River Basin . . . in accordance with
discharge limitations, monitoring requirements and other
conditions set forth herein, and in the attached “Standard
[Arizona Pollutant Discharge Elimination System] Permit
Conditions.”

¶24 As noted, the 2017 Permit Renewal authorized the discharge
of waters “to an unnamed wash, tributary to Queen Creek in the Middle
Gila River Basin.” Queen Creek has been designated an “impaired
waterway” due to the levels of copper present in it. See 33 U.S.C.

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§ 1313(d)(1)(C) (requiring states to identify waters that do not meet water
quality standards and establish for those waters a “total maximum daily
load . . . at a level necessary to implement the applicable water quality
standards”); see also 40 C.F.R. § 131.31(b); Ariz. Admin. Code tit. 18, ch. 11,
art. 1, app. B. ADEQ’s 2017 Permit Renewal subjected Resolution to
effluent limitations for copper that are more stringent than federal new
source performance standards for copper. See 40 C.F.R. § 440.104.

D. Procedural History

¶25 The San Carlos Apache Tribe (the “Tribe”) challenged
ADEQ’s issuance of the 2017 Permit Renewal with the Arizona Water
Quality Appeals Board (the “Board”). The Tribe claimed that the
construction of Shaft 10 and other new features created a “new source,” 40
C.F.R. §§ 122.2, 122.29(b), rather than an “existing source,” 40 C.F.R.
§ 122.29(a)(3), under the CWA. The Tribe maintained that, as a “new
source,” Shaft 10 needed to satisfy additional provisions of the CWA before
ADEQ could properly issue a permit renewal.

¶26 An administrative law judge (“ALJ”) from the office of
administrative hearings conducted a seven-day hearing and issued
findings of fact and conclusions of law. The ALJ determined that ADEQ
generally did not act arbitrarily and capriciously when it issued the 2017
Permit Renewal, but ADEQ should have first analyzed whether Shaft 10
and the other new features were a “new source” under § 122.29(b). The
ALJ, therefore, concluded that “the matter should be remanded to ADEQ
to allow it to conduct an analysis as required by 40 C.F.R. § 122.29(b).”

¶27 In response to the ALJ’s decision, the Board entered an order
remanding the matter to ADEQ to conduct a “new source” analysis.
ADEQ did so and concluded that Shaft 10 and the new features were
“existing sources” (not “new sources”) under the CWA. The Board issued
a final administrative decision, which adopted all the ALJ’s findings of fact
and affirmed ADEQ’s issuance of the 2017 Permit Renewal.

¶28 The Tribe appealed the Board’s decision to the superior court
under A.R.S. § 12-905. The superior court affirmed the Board’s decision,
concluding that Shaft 10 and the new features did not constitute a “new
source” under the CWA.

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¶29 The court of appeals reversed the superior court in a split
opinion. San Carlos Apache Tribe v. State, 254 Ariz. 179, 193 ¶ 61, 195 ¶ 72
(App. 2022). The majority concluded that “[t]he CWA treats the new mine
shaft as a ‘new source’ because it is substantially independent of the
non-contiguous original deposit at the mining site.” Id. at 183 ¶ 1. Thus,
Shaft 10 “is a new source and Resolution’s mining site is subject to [new
source performance standards] under 40 C.F.R. § 440.104(a).” Id. at 193
¶ 61. The majority also determined that because Shaft 10 is a “new source”
and Queen Creek is an “impaired waterway,” ADEQ may not renew
Resolution’s discharge permit until (1) ADEQ finalizes a total maximum
daily load plan for Resolution’s discharge of water into Queen Creek, and
(2) Resolution demonstrates other requirements prescribed in 40 C.F.R.
§ 122.4(i). Id. at 183 ¶¶ 2, 4, 193 ¶¶ 62–63.

¶30 The dissent disagreed with the order in which the majority
approached the CWA regulations for the “new source” determination,
explaining that the regulations should be evaluated “in the order they are
presented in the text of the regulation.” Id. at 197–98 ¶¶ 74–76 (Paton, J.,
dissenting). Conducting the analysis in that order, the dissent concluded
that “Shaft 10 is not a new source that would require ADEQ to issue [a total
maximum daily load plan] before permitting discharge from Shaft 10.” Id.
at 202 ¶ 99.

¶31 We granted review because this case presents an issue of
statewide importance. Although the 2017 Permit Renewal has expired,
the issue presented is one that is likely to arise again and evade review.
We have jurisdiction pursuant to article 6, section 5(3) of the Arizona
Constitution.

II. DISCUSSION

¶32 “We interpret statutes and administrative rules de novo,
‘apply[ing] the same rules in construing both statutes and rules.’” Saguaro
Healing LLC v. State, 249 Ariz. 362, 364 ¶ 10 (2020) (alteration in original)
(quoting Gutierrez v. Indus. Comm’n, 226 Ariz. 395, 396 ¶ 5 (2011)). “We do
not defer to the agency’s interpretation of a rule or statute.” Id. We
“affirm the agency action unless the court concludes that the agency’s
action is contrary to law, is not supported by substantial evidence, is
arbitrary and capricious or is an abuse of discretion.” A.R.S. § 12-910(F).

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A. What Is The Test For Determining Whether A Construction Is A
“New Source” Under The CWA?

¶33 In 1972, Congress passed the CWA with the “objective . . . to
restore and maintain the chemical, physical, and biological integrity of the
Nation’s waters.” 33 U.S.C. § 1251(a). The CWA prohibits the “addition
of any pollutant to navigable waters from any point source” without a
permit. 33 U.S.C. § 1362(12)(A); see also 33 U.S.C. § 1311(a); 40 C.F.R.
§ 122.1(b)(1). The CWA also requires the EPA to establish “standards of
performance” for “new sources” from which there are or may be discharges
of pollutants for certain industries. 33 U.S.C. § 1316(b)(1)(B).

¶34 The Tribe claims that Shaft 10 is a “new source” under the
CWA. According to the Tribe, this designation matters because Queen
Creek is an “impaired waterway” and the CWA regulations provide:

No permit may be issued . . . [t]o a new source . . . if the
discharge from its construction or operation will cause or
contribute to the violation of water quality standards. The
owner or operator of a new source . . . proposing to discharge
into a water segment which does not meet applicable water
quality standards or is not expected to meet those standards
even after the application of the effluent limitations required
by . . . [the] CWA, and for which the State or interstate agency
has performed a pollutants load allocation for the pollutant to
be discharged, must demonstrate . . . that: (1) There are
sufficient remaining pollutant load allocations to allow for the
discharge; and (2) The existing dischargers into that segment
are subject to compliance schedules designed to bring the
segment into compliance with applicable water quality
standards.

40 C.F.R. § 122.4(i). The Tribe maintains that the 2017 Permit Renewal was
improper because ADEQ issued it before a copper total maximum daily
load for Queen Creek was finalized and before Resolution met its burden
under § 122.4(i)(1) and (2). Conversely, Resolution and ADEQ contend
that Shaft 10 is not a “new source” that would trigger these requirements,
and therefore ADEQ properly issued the 2017 Permit Renewal.

¶35 At the outset, we must determine the proper framework for

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determining whether a construction is a “new source” under the CWA.4
Section 122.29(b) provides the “[c]riteria for new source determination.”
We agree with the court of appeals’ dissent that we should “approach the
CWA regulations in the order they are presented in the text of the
regulation.” San Carlos Apache Tribe, 254 Ariz. at 197 ¶ 74; see also Antonin
Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 167
(2012) (discussing the “whole-text canon” that “calls on the judicial
interpreter to consider the entire text, in view of its structure and of the
physical and logical relation of its many parts”).

¶36 Section 122.29(b)(1) begins: “Except as otherwise provided in
an applicable new source performance standard, a source is a ‘new source’
if it meets the definition of ‘new source’ in § 122.2.” See also 40 C.F.R.
§ 122.29(a)(1) (providing that “[n]ew source” is “defined in § 122.2”).
Therefore, the test first examines the definition of “new source” in § 122.2,
which states:

New source means any building, structure, facility, or
installation from which there is or may be a “discharge of
pollutants,” the construction of which commenced: (a) After
promulgation of standards of performance under section 306
of CWA which are applicable to such source, or (b) After
proposal of standards of performance in accordance with
section 306 of CWA which are applicable to such source, but
only if the standards are promulgated in accordance with
section 306 within 120 days of their proposal.

See also 33 U.S.C. § 1316(a)(3) (defining “source” as “any building, structure,
facility, or installation from which there is or may be the discharge of

4 The federal CWA statutes and regulations at issue here may have a
corresponding state statute or regulation due to implementation of the
Arizona Pollutant Discharge Elimination System Program. See, e.g., Ariz.
Admin. Code R18-9-A905(A)(1)(e) (incorporating by reference 40 C.F.R.
§ 122.29 (“New sources and new dischargers”) for the Arizona Program
Standards). In this Court, however, the parties exclusively relied upon
federal statutes and regulations rather than citing any corresponding state
statute or regulation. Thus, we cite to the federal provisions. No party
has challenged the validity, enforceability, or applicability of the CWA
regulations.
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pollutants”); 40 C.F.R. § 122.29(a)(2) (same); 33 U.S.C. § 1316(a)(2) (“The
term ‘new source’ means any source, the construction of which is
commenced after the publication of proposed regulations prescribing a
standard of performance under this section which will be applicable to such
source, if such standard is thereafter promulgated in accordance with this
section.”).

¶37 If that provision is satisfied, § 122.29(b)(1) instructs that we
next evaluate the three criteria in § 122.29(b)(1)(i)–(iii):

[A] source is a “new source” if it meets the definition of “new
source” in § 122.2, and (i) It is constructed at a site at which no
other source is located; or (ii) It totally replaces the process or
production equipment that causes the discharge of pollutants
at an existing source; or (iii) Its processes are substantially
independent of an existing source at the same site.

40 C.F.R. § 122.29(b)(1) (emphasis added); see also Nat’l Wildlife Fed’n v. EPA,
286 F.3d 554, 568 (D.C. Cir. 2002) (explaining that the new source
performance standards apply “only to sources that meet the ‘new source’
definition in 40 C.F.R. § 122.2, as well as one of the following three criteria”
in § 122.29(b)(1)(i)–(iii)).

¶38 If those provisions are satisfied, the “new source” test
concludes with an evaluation of § 122.29(b)(2): “A source meeting the
requirements of paragraphs (b)(1)(i), (ii), or (iii) of this section is a new
source only if a new source performance standard is independently
applicable to it. If there is no such independently applicable standard, the
source is a new discharger. See § 122.2.” 5

¶39 The “new source” test, therefore, begins with the broadest
criteria—identifying both the general physical characteristics of the
construction (whether it is a “building, structure, facility, or installation”)

5 As the ALJ noted, the Tribe originally contended Resolution developed
a “new discharger” but later withdrew that allegation and presented no
substantial evidence on the issue. We were not asked to determine
whether Shaft 10 is a “new discharger” under the CWA, see, e.g., 40 C.F.R.
§ 122.2 (providing a definition of “new discharger”). We therefore do not
address that issue or any requirement applicable to a “new discharger.”
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and when its construction commenced. See 40 C.F.R. §§ 122.2, 122.29(b)(1).
The test then evaluates additional criteria that are narrower in scope (e.g.,
the source’s relationship with other features where the source is located).
See 40 C.F.R. § 122.29(b)(1)(i)–(iii), (b)(2). See also Nat’l Wildlife Fed’n, 286
F.3d at 568 (“If new construction does not satisfy 40 C.F.R. § 122.2 and one
of the three criteria set forth in 40 C.F.R. § 122.29(b)(1), then the construction
is generally classified as a ‘modification’ and is not subject to the [new
source performance standards].”).

¶40 Accordingly, the following three-step test should be used to
determine whether a construction is a “new source” under the CWA:

1. Step One: Does the construction meet the definition of “new
source” under 40 C.F.R. § 122.2? 40 C.F.R. § 122.29(b)(1); see also
33 U.S.C. § 1316(a)(2), (3).

a. Has there been a construction of a building, structure,
facility, or installation from which there is or may be the
discharge of pollutants? 40 C.F.R. § 122.2; see also 33
U.S.C. § 1316(a)(3); 40 C.F.R. § 122.29(a)(2).

b. Has construction commenced? 40 C.F.R. § 122.2; see also
33 U.S.C. § 1316(a)(2).

c. Did construction commence after the promulgation (or
proposal) of standards of performance under section 306
of the CWA that are applicable to such source? 40 C.F.R.
§ 122.2; see also 33 U.S.C. § 1316(a)(2).

If the answer to any subpart is no, the construction is not a new
source.

2. Step Two: If the answer to all subparts of step one is yes, does the
construction meet any of the following definitions of a “new
source” in 40 C.F.R. § 122.29(b)(1)?

a. Is the construction at a site at which no other source is
located? 40 C.F.R. § 122.29(b)(1)(i).

b. Does the construction totally replace the process or

14
 SAN CARLOS V. STATE, ET AL.
Opinion of the Court

production equipment that causes the discharge of
pollutants at an existing source? 40 C.F.R.
§ 122.29(b)(1)(ii).

c. Are its processes substantially independent of an existing
source at the same site? 40 C.F.R. § 122.29(b)(1)(iii).

If the answer to all subparts is no, the construction is not a new
source.

3. Step Three: If the answer to all subparts of step one and any
subpart of step two is yes, is there a new source performance
standard that is “independently applicable” to the source? 40
C.F.R. § 122.29(b)(2).

a. If yes, the source is a new source. Id.

b. If no, the source is not a new source. Id.

This three-step test is consistent with the text and sequence of the “criteria
for new source determination” expressly set forth in § 122.29(b). See, e.g.,
Nat’l Wildlife Fed’n, 286 F.3d at 568.

B. Is Shaft 10 A “New Source” Under The Three-Step Test?

¶41 We must now apply the three-step test to determine whether
Shaft 10 is a “new source” under the CWA.

1. Step One

a. Is Shaft 10 a building, structure, facility, or installation from
which there is or may be a discharge of pollutants?

¶42 The Board found that Shaft 10 and other mine features are
“facilities” under § 122.2. In this Court, the parties do not dispute that
Shaft 10 is a “building, structure, facility, or installation from which there is
or may be a ‘discharge of pollutants.’” See 40 C.F.R. § 122.2; see also 33
U.S.C. § 1316(a)(3); 40 C.F.R. § 122.29(a)(2). Copper effluent is a pollutant
under the CWA. 40 C.F.R. § 401.15(22).

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 SAN CARLOS V. STATE, ET AL.
Opinion of the Court

b. Has construction of Shaft 10 commenced?

¶43 It is undisputed that construction of Shaft 10 has commenced.
See 40 C.F.R. § 122.2; see also 33 U.S.C. § 1316(a)(2).

c. What was the timing of Shaft 10’s construction?

¶44 The final issue at step one is whether the construction of Shaft
10 commenced after the promulgation (or proposal) of standards of
performance under “section 306 of CWA which are applicable to such
source.” See 40 C.F.R. § 122.2; see also 33 U.S.C. § 1316(a)(2).

¶45 We begin by determining the meaning of “applicable to such
source”—does “such source” refer to the mine or to the new construction
at issue? We do not interpret this specific text in isolation, but instead read
it within the context of the CWA “new source” criteria. See Columbus Life
Ins. v. Wilmington Tr., N.A., 255 Ariz. 382, 385 ¶ 11 (2023) (stating that we
“determine the plain meaning of the words the legislature chose to use,
viewed in their broader statutory context”); Silver v. Pueblo Del Sol Water
Co., 244 Ariz. 553, 558 ¶ 16 (2018) (“We interpret agency regulations
according to principles of statutory construction.”); see also Scalia & Garner,
supra, at 167 (explaining that courts must interpret a statute’s plain
language in context because “[c]ontext is a primary determinant of
meaning”).

¶46 There are noteworthy differences in the text of the “new
source” criteria that assist in our interpretation. Step one considers
whether new source performance standards “are applicable to such source.”
See 40 C.F.R. § 122.2 (emphasis added); see also 33 U.S.C. § 1316(a)(2). Step
three provides that “[a] source . . . is a new source only if a new source
performance standard is independently applicable to it.” 40 C.F.R.
§ 122.29(b)(2) (emphasis added). We cannot ignore the text of
“independently applicable” at step three when determining the meaning of
“applicable” at step one. See Columbus Life Ins., 255 Ariz. at 385 ¶ 11
(noting “we view ‘the statute as a whole’ to ‘give meaningful operation to
all of its provisions’” (quoting Wyatt v. Wehmueller, 167 Ariz. 281, 284
(1991))); Silver, 244 Ariz. at 558 ¶ 16.

¶47 This textual distinction reveals that “applicable to such
source” at step one addresses whether a new source performance standard

16
 SAN CARLOS V. STATE, ET AL.
Opinion of the Court

is applicable to the mine. And “independently applicable to” the source
at step three addresses whether a new source performance standard applies
independently to the shaft. This interpretation gives meaning to each
term and ensures that the criteria in step one and step three are not
redundant. See State v. Eddington, 228 Ariz. 361, 363 ¶ 9 (2011) (“[I]f the
terms mean the same thing, then one subsection is redundant, and we
generally construe statutes so that no part is rendered redundant or
meaningless.”); see also Scalia & Garner, supra, at 174 (stating that no
provision “should needlessly be given an interpretation that causes it to
duplicate another provision or have no consequence”).

¶48 Moreover, this interpretation that step one addresses general
applicability to the mine is consistent with the fact that the “new source”
test begins with the broadest criteria at step one. See Part II(A) ¶ 39. The
subsequent steps evaluate criteria that are narrower in scope. Id.

¶49 Next, we must identify (1) when the construction of Shaft 10
commenced, and (2) when the new source performance standards were
promulgated that would be applicable to Shaft 10 as part of the regulated
copper mine. See 40 C.F.R. § 122.2; 33 U.S.C. § 1316(a)(2). And finally, we
must determine whether the construction of Shaft 10 commenced after the
promulgation of the new source performance standards that would be
applicable to Shaft 10 as part of the regulated copper mine. Id.

¶50 Resolution began developing and sinking Shaft 10 between
2007 and 2009. The EPA promulgated the new source performance
standards for the Ore Mining and Dressing Point Source Category on
December 3, 1982. See Ore Mining and Dressing Point Source Category
Effluent Limitations Guidelines and New Source Performance Standards,
47 Fed. Reg. at 54598–621; see also 40 C.F.R. § 440.100(a)(1) (stating that
provisions in Subpart J of Part 440 for Ore Mining and Dressing Point
Source Category are applicable to “discharges from . . . [m]ines that
produce copper” by “open-pit or underground operations”); 40 C.F.R.
§§ 440.100 to .105 (providing effluent limitation guidelines for certain mines
and mills). 6 The construction of Shaft 10 commenced after the
promulgation of new source performance standards that are applicable to

6 At step one, we do not determine whether Shaft 10 is itself a “mine”
because new source performance standards are applicable to copper mines
in Subpart J, 40 C.F.R. §§ 440.100 to .105.
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 SAN CARLOS V. STATE, ET AL.
Opinion of the Court

Shaft 10 as part of the regulated copper mine. Therefore, step one of the
“new source” test is met.

2. Step Two

¶51 In order to meet step two, one of the three criteria in
§ 122.29(b)(1)(i)–(iii) must apply to Shaft 10. Here, we only consider the
applicability of one subsection: § 122.29(b)(1)(iii) (evaluating whether “[i]ts
processes are substantially independent of an existing source at the same
site”). We accepted review on § 122.29(b)(1)(iii), which was presented in
ADEQ’s petition for review. Further, the Tribe’s briefing in this Court
focused on whether Shaft 10 met the criteria in § 122.29(b)(1)(iii). The
Tribe did not develop an argument under § 122.29(b)(1)(i) or (ii).
Accordingly, we decline to consider whether § 122.29(b)(1)(i) or (ii) are
satisfied. See State v. Johnson, 247 Ariz. 166, 180 ¶ 13 (2019) (declining to
consider an argument that a party failed to develop). 7

¶52 Section 122.29(b)(1)(iii) requires us to determine whether
Shaft 10’s “processes are substantially independent of an existing source at
the same site.” As § 122.29(b)(1)(iii) instructs, “[i]n determining whether
these processes are substantially independent, the Director shall consider
such factors as the extent to which the new facility is integrated with the
existing plant; and the extent to which the new facility is engaged in the
same general type of activity as the existing source.”

a. To what extent is the new facility integrated with the existing
plant?

¶53 The record demonstrates that Shaft 10 is integrated with
existing sources and operations of the mine. Shaft 10 works with existing
infrastructure, including Shaft 9 and the Never Sweat Tunnel, to ventilate
and dewater the underground workings of the mine.

7 The Tribe suggests that this “Court might remand for a determination of
whether Shaft 10 totally replaces the prior mine(s) under subsection
(b)(1)(ii).” We will not do so for the reasons stated. But even if we were
inclined to do so, any remand would be futile because we conclude that the
“new source” test fails at both steps two and three, see Part II(B)(2), (3)
¶¶ 63, 71.
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 SAN CARLOS V. STATE, ET AL.
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¶54 The “management of mine drainage is an integral part of most
mining systems.” Ore Mining and Dressing Point Source Category;
Effluent Limitations Guidelines and New Source Performance Standards,
47 Fed. Reg. 25682, 25684 (June 14, 1982). Without proper mine drainage
management, water will flood the mine’s underground workings and
disrupt operations. See id. at 25685 (“Water is a natural feature that
interferes with mining activities.”). To that end, Resolution drains water
from Shaft 9 to the base of Shaft 10, pumps the water up to and through the
Never Sweat Tunnel, combines that water with water collected from Shaft
8, and sends the water west to the water treatment plant for treatment and
storage. Resolution has integrated these functions of Shafts 8, 9, and 10
and the Never Sweat Tunnel. Shaft 10 depends on existing infrastructure
to serve the essential functions of ventilation and dewatering, which it does
not do independently.

¶55 The Tribe claims that “Shaft 10 is not integrated into prior
operations; those facilities are integrated into Shaft 10.” But
§ 122.29(b)(1)(iii) does not draw this fine distinction. Instead, it expressly
provides that we consider “the extent to which the new facility is integrated
with the existing plant.” 40 C.F.R. § 122.29(b)(1)(iii). And the record here
demonstrates that Shaft 10 is materially integrated with existing
infrastructure for purposes of performing the essential functions of
ventilating and dewatering underground workings, which are necessary
for the continued pursuit of copper ore. There is no evidence that Shaft 10
alone can ventilate and dewater the underground workings in the manner
necessary for exploration and extraction of copper ore at the mine. Shaft
10 is integrated with existing features of the mine for its proper functioning.
And the mere fact that Resolution extended the Never Sweat Tunnel does
not change this determination. Shaft 10 is also substantially integrated
with Shaft 9, which provides further support for the integrated workings.
Thus, existing features and Shaft 10 facilitate the continued and integrated
workings necessary for the pursuit of copper ore.

¶56 The Tribe points to a provision in the Federal Register where
the EPA notes that “a minor change” to a process (like “a new purification
step”) does not make a facility a “new source”; but “if the only connection
between the new and old facility is that they are supplied utilities such as
steam, electricity, or cooling water from the same source or that their
wastewater effluents are treated in the same treatment plant, then the new
facility will be a new source.” See NPDES Permit Regulations, 49 Fed. Reg.

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Opinion of the Court

at 38043. This provision does not support Shaft 10 being a “new source”
in this case. Shaft 10 is integrated with existing infrastructure—the Never
Sweat Tunnel and Shaft 9—to provide ventilation and dewatering, which
are essential components of the mining process. These interconnected
systems of ventilation and drainage are essential physical features of the
mine structure. Thus, the integration here materially differs from a
situation where the only connection between facilities is that “they are
supplied utilities . . . from the same source” or that their water is “treated
in the same treatment plant.” Id.

b. To what extent is the new facility engaged in the same general
type of activity as the existing source?

¶57 We now consider the extent to which Shaft 10 “is engaged in
the same general type of activity as the existing source.” 40 C.F.R.
§ 122.29(b)(1)(iii). Shaft 10 supports the ventilation and dewatering of
underground workings, which are necessary for the exploration, study, and
extraction of copper ore. These are the same general types of activities as
the existing source (i.e., the original workings of the mine that also
supported ventilation and dewatering).

¶58 The Tribe argues that Shaft 10’s activity is different from prior
activity at the existing mine. In particular, the Tribe claims that
dewatering Shaft 10 will be independent of the dewatering that previously
took place at a different point of extraction; the mine has not been used to
excavate copper ore for a period of time; and Resolution plans to extract
from a new, untouched ore body using a different mining technique (panel
caving) that will produce lower grade copper ore and increase the amount
of ore production.

¶59 But these arguments miss the mark. The issue is whether
Shaft 10 “is engaged in the same general type of activity as the existing
source.” 40 C.F.R. § 122.29(b)(1)(iii) (emphasis added). It is not focused
on the specific manner by which “the same general type of activity as the
existing source” is conducted, such as a precise mining technique, volume
of production, time period, or location. See also NPDES Permit
Regulations, 49 Fed. Reg. at 38044 (noting there is not a new source “if a
facility increases capacity merely by adding additional equipment in one or
two production steps”). Here, the historical mining operation in existence
for over a century sunk new shafts and provided the ventilation and

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dewatering necessary to discover, study, and extract new bodies of copper
ore as the mine expanded in an eastward direction. Shaft 10 is engaged in
that “same general type of activity”—providing ventilation and dewatering
necessary to discover, study, and at some point extract copper ore (i.e.,
copper mining). 40 C.F.R. § 122.29(b)(1)(iii); see also NPDES Permit
Regulations, 49 Fed. Reg. at 38044 (“The second clarifying factor that EPA
has added is the extent to which the construction results in facilities or
processes that are engaged in the same general type of activity as the
existing source. Under this second factor, if the proposed facility is
engaged in a sufficiently similar type of activity as the existing source, it
will not be treated as a new source.”).

¶60 The Tribe also points to the following language from the
EPA’s guidance: “Of course, to the extent the construction results in
facilities engaged in the same type of activity because it essentially
replicates, without replacing, the existing source, the new construction
would result in a new source.” NPDES Permit Regulations, 49 Fed. Reg.
at 38044. But Resolution’s sinking of a new shaft 300 feet from Shaft 9 to
pursue more ore does not “replicate” the existing source. This is unlike
the situation described in the Federal Register where “a power company
builds a new, but identical and completely separate power generation unit
at the site of a similar existing unit,” in which case “the new unit will be a
new source.” Id. Resolution constructed Shaft 10 and the mine’s other
new features to mine copper ore adjacent to the copper-ore deposits that
were exhausted. There is no “replication” in this case where those ore
deposits were exhausted. Merely pursuing a new ore deposit in a mining
area (as mines often do) does not make a construction a “new source” by
default—instead, the “new source” criteria must be evaluated.

¶61 A construction is not a “new source” if it merely could operate
substantially independently of the existing facility. The focus is on
whether it actually does operate substantially independently. See id.
(noting the EPA’s agreement that it “should consider whether the new
facility actually operates substantially independently of the existing facility,
not whether it could operate substantially independently” (emphasis
added)). The record does not establish that Shaft 10 does anything on its
own. It is instead fully integrated into the mining process.

¶62 Ultimately, § 122.29(b)(1)(iii) requires us to determine
whether Shaft 10’s “processes are substantially independent of an existing

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source at the same site.” “Site” is broadly defined as “the land or water
area where any ‘facility or activity’ is physically located or conducted,
including adjacent land used in connection with the facility or activity.”
40 C.F.R. § 122.2. Shaft 10, the mine water treatment plant, and the other
new features, such as the cooling tower, rock stockpiles, and wash bays, are
included in and integrated into the same “site.” With Shaft 10 being just
300 feet from Shaft 9, Resolution will continue operating in the area where
copper-ore mining previously took place within the confines of an earlier
permit renewal.

¶63 We agree with ADEQ’s explanation in its “new source”
analysis: “The new features added to the mine are supporting the same
process that has always existed at the site, which is extracting ore by any
means or methods. Therefore, there are no processes that are substantially
independent of the existing process to extract ore.” The record before us
supports this determination. Shaft 10 does not meet the criteria in
§ 122.29(b)(1)(iii), and it therefore fails to meet the definition of “new
source” at step two.

3. Step Three

¶64 Although we conclude that Shaft 10 is not a “new source” at
step two, we proceed to apply the remainder of the test at step three to
clarify this issue of statewide importance.

¶65 Section 122.29(b)(2) provides that “[a] source meeting the
requirements of paragraphs (b)(1)(i), (ii), or (iii) of this section is a new
source only if a new source performance standard is independently
applicable to it.” Thus, step three requires us to consider whether a new
source performance standard is “independently applicable” to Shaft 10.
In essence, this step differentiates between a “new source” and a “new
discharger,” because “[i]f there is no such independently applicable
standard, the source is a new discharger.” 40 C.F.R. § 122.29(b)(2).

¶66 The CWA sets forth new source performance standards that
apply to “discharges from . . . [m]ines that produce copper.” 40 C.F.R.
§ 440.100(a)(1); see also 40 C.F.R. § 440.104(a) (explaining that the effluent
limitations in the new source performance standards apply to “pollutants
discharged in mine drainage from mines that produce copper”). The
CWA does not provide a new source performance standard for a single

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“shaft.” But the Tribe argues that Shaft 10 is “in and of itself a mine” under
the CWA.

¶67 A “mine” is “an active mining area, including all land and
property placed under, or above the surface of such land, used in or
resulting from the work of extracting metal ore or minerals from their
natural deposits by any means or method.” 40 C.F.R. § 440.132(g).
“‘Active mining area’ is a place where work or other activity related to the
extraction, removal, or recovery of metal ore is being conducted . . . .” 40
C.F.R. § 440.132(a).

¶68 These definitional provisions describe a “mine” as a broader
geographic area made up of “all land and property” used in or resulting
from the work of extracting ore by any means or method. 8 See All,
Merriam-Webster, https://www.merriamwebster.com/dictionary/all
(last visited June 10, 2024) (defining “all” as “the whole amount, quantity,
or extent of; as much as possible; every member or individual component
of; the whole number or sum of”). The descriptions of “all land and
property” and “a place where work or other activity related to the extraction,
removal, or recovery of metal ore is being conducted” include Shafts 9 and
10, the Never Sweat Tunnel, and other features that work together to
ventilate and dewater the underground workings necessary for Resolution
to explore the Eastern Deposit and extract copper ore. See 40 C.F.R.
§ 440.132(a), (g) (emphasis added). These provisions do not describe a
single shaft which “is the surface opening to the mine.” See Development
Document, supra, at 49–50.

¶69 The Tribe claims that “Resolution will use Shaft 10 to extract
copper ore from an untouched ore body.” Resolution, however, asserts
that “Shaft 10 would be used for dewatering and ventilation, not to remove
ore.” The Tribe has not introduced any evidence to support a finding that
Resolution plans to excavate or remove copper ore in the Eastern Deposit
from Shaft 10. According to Resolution’s General Plan of Operations, in
the event of future ore extraction, two new shafts “will be production shafts

8 The fact that a new mining method will be used for the Eastern
Deposit—panel caving—does not change the analysis because the
definition of “mine” includes extraction “by any means or method.” 40
C.F.R. § 440.132(g).

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Opinion of the Court

dedicated to hoisting ore and other rock material from the Mine”—these
will be Shafts 11 and 12. The Plan of Operations does not state that Shaft
10 will be used for ore extraction. Thus, we cannot speculate about such
alleged future use of Shaft 10. But even if Shaft 10 is at some point used to
extract a new ore deposit, this does not automatically make it a “new
source.” The CWA’s “new source” criteria applicable to mines could have
stated that a construction used to extract a new ore deposit is a “new
source.” But the CWA does not take this rigid approach. Instead, when
ADEQ considers a discharge permit renewal, it must consider each step of
the “new source” criteria and the evidence relevant to each step during the
applicable time period.

¶70 The ALJ’s findings of fact—which the parties do not challenge
here—include testimony describing Shaft 10 as a structure “related to the
extraction, removal or recovery of metal ore.” 9 Shaft 10 is not drilled
directly into an ore body; it works with other features to conduct activities
related to ventilating and dewatering underground workings. It is
therefore a component of the mine and is not itself a “mine” under
§ 440.132(g).

¶71 Shaft 10 does not have a new source performance standard
“independently applicable” to it. See, e.g., Mahelona v. Hawaiian Elec. Co., 418 F. Supp. 1328, 1335 (D. Haw. 1976) (“[W]hile there are standards of
performance governing steam electric generating plants, there are no
regulations applicable solely to discharge facilities.” (internal citation
omitted)). Because Shaft 10 does not meet step three of the “new source”
test, for this additional reason, it is not a “new source” under the CWA.
See 40 C.F.R. § 122.29(b)(2).

III. CONCLUSION

¶72 We vacate paragraphs 1–20 and 30–72 of the court of appeals’

9 The court of appeals explained that “the Tribe did not challenge any
specific factual determinations below” and “[g]iven the parties have not
raised any factual issues on appeal, we need not resolve any questions of
fact.” San Carlos Apache Tribe, 254 Ariz. at 186 ¶ 28. The same is true in
this Court.
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Opinion of the Court

opinion. 10 We affirm the superior court’s decision that Shaft 10 is not a
“new source” and that ADEQ acted within its discretion by issuing the 2017
Permit Renewal to Resolution.

10 Paragraphs 21–29 address issues of mootness, timeliness, and deference
to factual determinations below that no party challenged before this Court.
25