New York City: State health department to use state health funds to buy a copper mine

New York’s health department said Wednesday that it will use a portion of state funds to purchase a copper mining company that was previously owned by a state contractor.

The Department of Health and Mental Hygiene said it will make the purchase of Copper Mountain Resources Inc. (CMRA) at a cost of $1.9 million, which is a third of the $10.5 million the company was seeking for a state contract.

The department said CMRA’s proposed contract includes an agreement to use the funds for “all activities related to the purchase” of mining equipment, such as digging for copper and using copper mines.CMRA has been the subject of state investigations since the state’s 2010 financial disclosure reports.

The company’s board said in an Oct. 31 letter to state Attorney General Eric Schneiderman that the company’s financial statements “do not meet the highest standards of good financial management and due diligence” and that the board had not “adequately considered the potential consequences of a loss.”CMRA was founded in New York in 2005 and is the only company to win approval to mine copper in New England, according to its website.

In 2011, it acquired the copper mines of the former Chatham River Basin, near Boston, from the state.

The companies plans to build a new mine to extract copper from the region.

The company said Wednesday the state has agreed to reimburse $1 million for the purchase and has provided a “full financial commitment” to CMRA.

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