McCain Helps a Business Partner of Iran

The hawkish senator is catching some flak from neocons for pushing a land sale that could benefit one of Tehran's corporate associates.

Sean Gardner/Getty Images

Sen. John McCain, who once joked about bombing Iran, is now pushing for a bill that would benefit a company that’s in business with the Iranian government.

The Arizona senator and 2008 GOP presidential nominee is leading the charge on Capitol Hill to hand over 2,400 acres of federal land in Tonto National Forest in Arizona to Resolution Copper. The land lies above what may be the largest copper deposit in the United States and ownership would make it easier for Resolution to fully exploit the deposits. In exchange, Resolution will give the U.S. government 5,300 acres scattered across the state that the company acquired nearly 10 years ago to facilitate this land swap. If the deal goes through, projections are that the mine could end up providing up to one quarter of the nation’s copper supply and create up to 1,400 jobs in an economically depressed corner of Arizona.

But there’s something of a catch. Resolution is majority owned and controlled by Rio Tinto, a global mining conglomerate. And that conglomerate also owns nearly 70 percent of the Rossing uranium mine in Namibia. Another owner of the place is the government of Iran.

This connection with the Tehran government has drawn scrutiny from those concerned about the Iranian nuclear program. And it’s put McCain—well-known as one of the most hawkish members of the GOP—in the unusual position of being at odds with some of his fellow neoconservatives.

Gabriel Pedreira, a spokesman for United Against a Nuclear Iran, opposed any legislation to transfer federal land to Rio Tinto. He told The Daily Beast, “Our concern continues to be that the [Iranian] regime is attempting to enrich uranium for purposes of nuclear weapon, and the regime maintains direct ownership of a mine that produces uranium.” In his opinion, Rio Tinto has not addressed this provision of the comprehensive sanctions against Iran.

United Against a Nuclear Iran, it should be noted, counts among its board members former Sen. Joe Lieberman, who was once one of McCain’s closest Capitol Hill confidants, and Mark Salter, McCain’s former chief of staff.

Nevertheless, Brian Rogers, a McCain aide pushed back against UANI, calling the Rio Tinto-Iran connection “a red herring.” Rogers noted that Iran technically owns a share of a Rio Tinto uranium mine in Namibia that was purchased before the fall of the shah. Since then, all dividend payments have been frozen and Iran receives “no uranium or revenue from the mine.”

Rio Tinto also reiterated that holdings in the mine are fully compliant with the current sanctions regime. Illtud Harri, a spokesman for the company, told The Daily Beast in a statement, “Rio Tinto has regular meetings with relevant U.S. government officials to discuss our shareholding in Rossing... We will continue to engage with U.S. officials, who have not indicated that they expect Rio Tinto to take any action in regard to its shareholding in Rossing.”

Yet even if Iran is not directly profiting from Rossing, the Iranian government’s ownership stake in the company still raises some red flags.

Jonathan Schanzer, a scholar at the Foundation for the Defense of Democracies, noted that even while Iran is not able to benefit from access to the mine and steps have been taken to force Iranian government officials from Rossing’s board, a potential land deal with Rio Tinto and Resolution could still send “mixed messages” to the Iranian regime.

He saw a potential vote on the land transfer as “an interesting test case” for Congress, because even if a deal on the Iranian nuclear program is reached, “they’re still not going to have agreement moving forward about Iranian-held assets and Iranian-held entities.” In Schanzer’s view, it is a very complicated case even in the already complicated world of U.S.-Iranian relations.

But the concerns over the mine aren’t just about Rio Tinto’s connections to Iran. Environmental groups have long been up arms over the project, which would involve digging a giant cave 7,000 feet below the surface of the earth, where robots will work to extract the copper at temperatures as high as 175 degrees Fahrenheit.

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Athan Manuel, the director of land protection programs for the Sierra Club, said the mine was “a deeply horrible idea from any angle” because of the destruction of forest and damage to water supplies as a result of mining. Further, the San Carlos Apache tribe has opposed the proposed mine and rallied significant Native American support against any land exchange. The land involved is sacred to them and used to gather acorns for religious ceremonies. In somewhat hyperbolic congressional testimony, the tribe has compared the project to allowing mining “underneath the Vatican or Arlington National Cemetery.”

But the project hasn’t just been held up because of these concerns. Originally, when the land exchange was first mooted nearly 10 years ago, former Congressman Rick Renzi insisted that one of the parcels that Resolution Copper purchase include an alfalfa field owned by a friend and business partner. The alfalfa field wasn’t included but the resulting scandal served to slow the already glacial legislative process and contributed to the fact that Renzi is now serving three years in federal prison.

In the meantime, even without the land-exchange bill moving forward in Congress, Resolution is still taking major steps to go through the environmental regulatory process for federal owned lands as if the land exchange wasn’t going to happen. This would allow Resolution to take some steps to open the mine and make back some of the nearly $1 billion it has already invested in the project. The land exchange is still the preferred option. After all, as one McCain aide told The Daily Beast, it is necessary “in order to fully operate the mine and maximize job growth.”

The question moving forward is whether McCain is able to leverage his new status as a member of the Senate majority to push the land exchange forward in the next Congress. In the meantime, McCain’s nearly decade-long struggle for the mine has generated this rather strange collection of opponents—a diverse coalition ranging from Iran hawks, environmentalists, and Apaches determined to gather acorns. But all are determined to use what leverage they can grasp. As Manuel of the Sierra Club told The Daily Beast, “Whenever you can link anything to Iran, it gives you more traction than you would otherwise.”