Ursula Kramer with the Pima County Department of Air Quality officials say the application was denied because Rosemont Copper could not show that it was in compliance with state and federal air regulations. The company can reapply for the permit or appeal the decision to the PDEQ board within 30 days.

Rod Pace, president of the Canadian-based company, says his firm is concentrating on other applications for the mine. They'll also continue pursuing a lawsuit against Pima County over permit delays. The company proposes to build an open-pit copper mine on private and public land about 30 miles southeast of Tucson. Rosemont officials have estimated the mine will produce up to 234 million pounds to copper annually, when at full production.

Reporter Steve Shadley takes a closer look: