A Canadian mining company that wants to open a mine near Salmon satisfied the concerns of every environmental group and Indian tribe that came forward - a surprising story in and of itself.

But relatively small Formation Capital's major hurdle is the international mining giant that owns the cobalt mine next door. If you believe company officials, Formation is caught in the middle of a worldwide scheme to corner the cobalt market.

But an attorney for Noranda Exploration, the main owner of the Blackbird Mine adjacent to Formation's Idaho Cobalt Project, says it is just protecting the $70 million investment it and its partners made to clean up after past mining.

Formation Capital plans to invest $138 million to mine more than 1,500 tons of cobalt a year 22 miles west of Salmon in an area with some of the richest deposits of cobalt known in the world. The mineral is used in jet engines, batteries for hybrid and electric cars, and other machines.

Formation's planned output would represent about 15 percent of the annual world supply, company officials said.

Noranda has filed an appeal of Formation's recently granted permit from the U.S. Forest Service with the regional forester. Formation Capital secured its permit from the U.S. Environmental Protection Agency earlier this year.

The permit was awarded after the company joined the Idaho Conservation League in a unique partnership. Formation said it will pay $150,000 a year for the life of the mine for a series of projects that will be picked by a panel that includes the ICL, the Nez Perce and Shoshone-Bannock tribes, and residents of Lemhi and Custer counties. The first projects were picked last month.

Noranda is worried that since it has not been able to meet water quality standards yet in the same drainage where Formation's mine will be located, the new mine could add to the pollution and Noranda would be the easiest target for paying to clean it up.

"Noranda is not opposed to the cobalt project," said Bruce Smith, a Boise attorney who represents the company. "What Noranda is concerned about is the cobalt project being implemented in a way that increases our exposure."

Noranda is owned by Xstrata, a huge international mineral conglomerate. Its Blackbird Mine is also a rich cobalt deposit, but the four mining companies who owned it have spent years and more than $70 million to clean it up and to restore Panther Creek.

The Swiss-based company controls 80 percent of the high purity cobalt market and makes tens of millions of dollars annually by delaying Formation Capital's opening, Formation officials said.

Formation officials argue that Noranda had supported its mine until it announced its concentrated ore would not be shipped out of the country to Noranda, but instead would be processed at its own plant in North Idaho. That made it a competitor and a threat to Xstrata's near monopoly of high-purity cobalt.

In the interim, Xstrata is making anywhere from $5 million to $10 million monthly on the share of the market that would be Formation's if it were operating, said its attorney Joe Baird of Boise.

If Formation is right, Xstrata will keep the mine tangled up in court for as long as it can. If the issue truly is the environmental liability it would seem the federal government could work out a compromise.

But if Xstrata's real motive is to control the high- purity cobalt market, a resolution is more complex.

Rocky Barker: 377-6484