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The agency ruled that the canyon could be "categorically excluded" from a formal environmental assessment because exploration would last less than a year and might not lead to mining activity.

If the exploration finds rich uranium deposits, it could lead to the first mines near the canyon in nearly two decades.

On Tuesday, the Board of Supervisors in Coconino County, Ariz., voted unanimously to try to block any potential uranium mines, and asked the government to withdraw large sections of land immediately north and south of the national park from mineral leasing.

Kaibab National Forest spokeswoman Barbara McCurry said the agency had little choice but to allow the drilling under the 1872 mining law that governs hard-rock mining claims. "The exploratory drilling is pretty minimal," she said, adding that if Vane discovered uranium deposits and sought a permit to mine, that decision would require a full environmental analysis and impact statement.

Dusty Horwitt of the Environmental Working Group in Washington said the Forest Service's actions confirmed that House-approved amendments to the mining law should be approved by the Senate. Congress should give federal land managers the right to balance the desires of mining companies with other values like the protection of national parks and water supplies (Felicity Barringer, New York Times, Feb. 7).

Rio Tinto rejects BHP takeover bid

Rio Tinto rejected rival mining group BHP Billiton's takeover offer hours after the bid was made, leaving a hostile campaign largely dependent on what a Chinese company intends to do.

BHP Chief Executive Marius Clopper yesterday raised his offer for Rio by 13 percent to $147 billion (Greenwire, Feb. 6).

But Rio rejected it, saying it "still fails to recognize the underlying value of Rio Tinto's quality assets and prospects."

The role of China is critical to what happens next. Chinese state-owned mining and minerals company Chinalco last week acquired 12 percent of Rio Tinto's U.K.-listed shares, a move seen by many as an attempt to block BHP's efforts to buy Rio (Greenwire, Feb. 1).

China worries such a takeover would give the two companies a virtual monopoly on iron ore supplies from Australia, of which the Chinese steel industry is the biggest customer.

If Chinalco does bid for Rio, or if it increases its stake, Rio and BHP might decide to cooperate together.

BHP will now submit its bid to the regulatory authorities in Canada, the European Union, South Africa and the United States. Kloppers said the EU review was expected to last nine to 12 months, which leaves BHP and Rio time to evaluate the market before deciding what to do (Bream/Burgess, Financial Times [subscription required], Feb. 7). -- SG

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