DENVER (AP) â¿¿ A group challenging a company's plan to look for molybdenum at an old mining site near Crested Butte is making its case Wednesday to Colorado officials.

U.S. Energy Corp. won state approval last year of a revised plan to build a mine tunnel at Mount Emmons, nicknamed the Red Lady for its reddish soil. The High Country Citizens' Alliance is appealing the decision before the Colorado Mined Land Reclamation Board on Wednesday.

It's part of a yearslong dispute over plans for large-scale mining near Crested Butte, a ski town and mountain biking mecca. The dispute that has lasted through changes in ownership of the site and a failed bid by the group for a review by the U.S. Supreme Court.

The alliance says the mining proposal represents not just prospecting, as state officials found, but development, which requires a more thorough review.

The group also says the state should order the company to get locally required permits before activity begins and to post enough bond to cover costs of water-quality treatment.

The Colorado Division of Reclamation, Mining and Safety says the group hasn't shown that state officials' approval was incorrect, and Riverton, Wyo.-based U.S. Energy Corp. contends Colorado officials' previous decisions should stand.

The alliance argues that U.S. Energy Corp., now working with Thompson Creek Metals Co., already believes Mount Emmons has one of the largest and highest-grade molybdenum deposits in the world, and its proposed activities can't qualify as prospecting.

U.S. Energy Corp. counters that it still doesn't know if it's commercially viable to mine at current prices and industry standards.

Colorado is the country's leading producer of molybdenum, which is used to strengthen steel.

The Mount Emmons site is in the same area as the old Keystone Mine, where lead, silver and zinc was mined until 1969. A plant treats water from the site before it flows to Coal Creek.

In December, state health department officials advised U.S. Energy Corp. of possible water contamination violations after samples showed high levels of cadmium, aluminum and zinc.

High Country Citizens' Alliance executive director Dan Morse says approving new mining activities on a site with contamination "flies in the face of common sense."

The alliance formed in 1977 to try to block large-scale mining near Crested Butte, and it spent years challenging the sale of public land for mining at Mount Emmons. Federal appeals court judges said the group was a third party and couldn't challenge the sales, and the U.S. Supreme Court decided not to take up the case.

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