Three state District Court judges ruled today that the Reserve Mining Co. can dump taconite tailings on a site it has chosen over the protests of two state environmental agencies.

The panel of judges, disagreeing with the State Pollution Control Agency and the Department of Natural Resources, said the on-land disposal site poses no threat to health or the environment.

The company has been dumping 67,000 tons of waste products daily into Lake Superior for 22 years. The state and federal governments began trying to stop it in 1970, contending that the taconite tailings can cause cancer. The tailings have contaminated the drinking water of Duluth and other communities that draw from the lake.

Federal Districk Court Judge Miles ordered reserve to stop dumping the tailings into Lake Superior in April. 1974, but legal battles have delayed resolution of the controversy.

A federal appeals court ordered a halt to the discharge in March of 1975, ruling that Reserve must switch to an on-land disposal. The company then applied for start permits to use the site it preferred, but the state agencies turned it down.

Reserve has been ordered by a federal court to halt the discharge by July 7. But the deadline could be lifted to allow reserve time to build a new disposal site.

Today's decision is expected to be appealed by the two state agencies to the Minnesota Supreme Court. The agencies have argued that asbestos fiabers from the tailings could be blown onto four miles away silver Bay, from Mile Post, the site preferred b-p Reserve. In addition, the agencies point out that a trout stream in the rugged, uninhabited creek valley might be harmed and that dams needed to contain the waste would be unsafe.

But the three judges said denial of dumping permits was "unlawful, unreasonable, and not supported by substantial evidence,."

The state preferred another location, Mile Post 20. But Reserve argued that it could not afford to haul the waste the additional 13 miles inland and that it would cost $100 million more than the $300 million needed to build at Mile Post 7.

Reserve had threatened to close its 3,200-worker processing plant at Silver Bay unless Mile Post 7 was approved.

Once the site issue is resolved, it would take about two years to build a disposal base. The July 7 deadline on lake dumping couldn't be met anyway, and many parties involved believe the Minnesota Supreme Court may extend it rather than see the plant shut down.

Reserve, owned by two Ohio companies, Armco Steel Corp. and Republic Steel Corp., produces up to 10 million tons of taconite pellets each year for processing steel.