ALBUQUERQUE — A uranium mining company contends a U.S Environmental Protection Agency ruling is stalling its plans to begin operations in northwestern New Mexico.

The EPA ruled last year that a 160-acre parcel near Church Rock is part of a dependent Indian community, therefore requiring that Hydro Resources Inc. obtain an underground injection control permit with the EPA, not the state of New Mexico.

New Mexico-based Hydro Resources challenged that ruling, and the 10th U.S. Circuit Court of Appeals in Denver is to hear arguments in the case Monday.

"The most important thing is we need to have clarity so we can move forward with our business," said Mark Pelizza, vice president of health, safety and environmental affairs for Uranium Resources Inc., HRI's parent company.

The state of New Mexico granted HRI an underground injection control permit for the land in the late 1980s. The EPA has not taken any action to deny or issue a permit since its ruling in February 2007.

New Mexico did not challenge the EPA ruling.

Hydro Resources owns the surface and mineral rights on the 160-acre property 10 miles northeast of the Church Rock Chapter House known as Section 8. The company contends the EPA erred in determining the Indian Country status, since Section 8 never had been set aside by the federal government for use as Indian land.

"That property we're talking about in Church Rock is our property," said Deborah Palowski, a spokeswoman for URI. "We own it, and it has never been given to the (American) Indians."

The EPA based its decision on the makeup of the Church Rock community. Over 95 percent of the land within the chapter is either trust land, tribal fee lands or used exclusively by members of the Navajo Nation, the EPA said. The agency also found that nearly 98 percent of the population in the chapter is American Indian.

The EPA said the appellate court should uphold the agency's determination because Section 8 "is plainly within the Church Rock Chapter."

"HRI primarily contends that one must determine the Indian Country status of the Section 8 land with blinders on, focusing solely on the Section 8 land itself," the EPA wrote in court documents.

The eastern side of the Navajo Nation and the Church Rock area is commonly referred to as a checkerboard, made up of Indian and non-Indian lands.

There is no uniformity of jurisdictional authority over the land within the chapter boundaries. The Section 8 land, like state or other non-Indian owned fee land, is not part of the chapter, HRI wrote in court documents.

"The fact that neither the Navajo Nation nor the United States' government has jurisdiction over state-owned land or private fee lands is recognized by the Navajo Nation and should have been recognized by EPA," HRI said.

The Navajo Nation — an intervener in the case — banned uranium mining on its lands in 2005.

The tribe wants the EPA to make the determination on permits, rather than the state, because the federal government has a trust responsibility to tribes. The EPA decision doesn't specifically state the agency would consider the ban when receiving applications for mining-related permits, but tribal officials have said they are hopeful the agency will.