Updated

Development of a gravel mine near the site of Theodore Roosevelt's historic Badlands ranch in western North Dakota will not continue, a Montana businessman said Wednesday.

Roger Lothspeich of Miles City, Mont., told The Associated Press that he signed an agreement Wednesday with the U.S. Forest Service to work out an exchange for other federal land or mineral rights at a different location.

Forest Service district ranger Ron Jablonski called it "a major change in direction" and said the agency is anxious to work with Lothspeich. He also said the exchange could be for other land or mineral rights on yet-to-be-determined federal land.

"We are going to take a look at options for some type of exchange," Jablonski said. "This could include other federal land, other minerals or a tax break of some kind."

The Forest Service purchased the ranch, next to Roosevelt's Elkhorn Ranch site, from brothers Kenneth, Allan and Dennis Eberts and their families in 2007. It cost $5.3 million, with $4.8 million coming from the federal government and $500,000 from conservation groups. The purchase did not include mineral rights.

Roosevelt, who was president from 1901 to 1909, set aside millions of acres for national forests and wildlife refuges during his administration. He spent more than three years in the North Dakota Badlands in the 1880s, grazing cattle on land that government agencies and conservation groups have hailed as the "cradle of conservation."

More than 50 wildlife and conservation groups, including the Boone and Crockett Club started by Roosevelt himself, pressed Congress to approve the 2007 purchase.

The Ebertses had bought Roosevelt's ranch and half the mineral rights from the Connell family in 1993 for $800,000. Lothspeich, who grew up near the land before moving to Montana, bought the other half of the mineral rights from the Connells at an undisclosed price, knowing the government had not obtained them in the Eberts deal.

Lothspeich and his fiancée, Peggy Braunberger, have spent about four years proving they own the right to remove gravel and other surface minerals at the 5,200-acre ranch near Medora. The proposed 25-acre site is about a mile from Roosevelt's cabin.

Lothspeich said he had intended to start digging gravel this year but he said the agreement for a potential land exchange means the plans are "stopped dead in their tracks."

"I'm shutting everything down," Lothspeich told the AP. "I'm happy, the Forest Service is happy, everybody will be happy," he said.

Lothspeich had previously said he wanted the Forest Service or conservation groups to pay him $2.5 million. Neither the federal agency nor the conservation groups took up his offer. He also has said his portion of the subsurface rights represents about $10 million in high-grade gravel that can be sold to the government and companies for road building in North Dakota's booming oil patch.

Tweed Roosevelt, the former president's great-grandson, said last month that he asked President Barack Obama to designate the area as a national monument, which would block development in the area.

"I'm delighted to hear this and it has the potential to be an excellent solution," Roosevelt said from his home in Boston. "I would still like to see the national monument designation go forward, to protect this area from any other potential problems."

Lothspeich said he and his fiancee approached the government about the exchange and met with the Forest Service for about three hours Wednesday morning to craft the agreement.

"I think Roger and Peggy showed a great amount of respect for the place, its history and the feeling people have for this," Jablonski said."