MINNEAPOLIS – Two longstanding mineral rights leases that are critical for a proposed large underground copper-nickel mine upstream from the pristine Boundary Waters Canoe Area Wilderness in northeastern Minnesota will not be renewed, two federal agencies announced Thursday, but the company said it will press forward.

The decision by the Interior and Agriculture departments strikes a serious blow to the proposed $2.8 billion Twin Metals project near Ely, about 250 miles north of Minneapolis. The agencies also announced other steps to protect the Boundary Waters watershed from future mining projects.

However, the incoming administration of President-elect Donald Trump potentially could reverse the decision. Trump’s nominee for interior secretary, Rep. Ryan Zinke of Montana, has advocated for increased mining on federal lands.

In a statement, the agencies cited “broad concerns from thousands of public comments and input about potential impacts of mining on the wilderness area’s watershed, fish and wildlife, and the nearly $45 million recreation economy.”

Twin Metals Minnesota, which sued the federal government in September to force renewal of its leases, said it will continue pursuing its legal options. The lawsuit is pending. The company issued a statement saying if the decision stands, it “will have a devastating impact on the future economy of the Iron Range and all of Northeast Minnesota, eliminating the promise of thousands of good-paying jobs and billions of dollars in investment in the region.”

But environmental groups that had fought the project for years welcomed the announcement.

Becky Rom, national chair of the Campaign to Save the Boundary Waters, said she believes the project is dead, and that it would be legally difficult for the Trump administration to undo the decision, but vowed that opponents will keep up the fight.

“We’re going to continue to make our case to policymakers and the American public to raise awareness of this issue,” she said. “By no means is our work done.”

But Frank Ongaro, executive director of the trade group Mining Minnesota, called the decision “a perfect example of why Democrats lost rural America.”