Governor Dayton is now touring the proposed non ferrous metal mining projects on the Iron Range, as he wrestles with an approval decision.
Nearly a billion years ago, the area that we now know as northern Minnesota was one of the most geologically active areas on earth. The Mid Continent Ridge was trying to separate the continent, leaving behind a curved gap in the ground which filled with water to become Lake Superior.
Mineral rich magma thrust upward, leaving behind volcanoes and world class deposits of iron, copper, nickel and gold. Those metals now lie in a band meandering from southwest to northeast, adjacent to the Archean granite of Minnesota's Iron Range. The iron has been mined for decades contributing to U.S. manufacturing and our role in World War II as the Arsenal of Democracy
In the current news is the ongoing battle between the world's largest iron ore miner, Vale SA of Brazil, and the Jinchuan Group, China's biggest nickel producer. They are bidding for control of South Africa's Metorex Ltd, a medium sized producer of high demand non-ferrous metals like copper and nickel. One reason for this demand is their use in renewable energy systems which provide transmission, rechargeable batteries, and wind turbine technology.
Commenting on the Metorex bids, Andrew Ross partner at First New York Securities LLC, said, "There's a race for mining assets worldwide going on. China and Brazil are at the forefront of that race."
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Dwarfing the mineral assets of Metorex Ltd are Minnesota's non ferrous mineral deposits. This resource has attracted several proposed mining ventures including one by Polymet Corporation of Canada and another from Duluth Metals of Canada and its partner, Chilean copper giant, Antofagasta PLC.
The state of Minnesota owns more than 6,000 acres of land in the region, and it stands to collect $2.5 billion in royalties in the coming decades if these new mining projects proceed. This state property is known as "school trust lands.'' Under the state Constitution, income from such lands is earmarked for the Permanent School Fund, which contributes about $60 per pupil to every school district. An analysis by the Minnesota Department of Natural Resources projected that the school fund, with assets of $720 million, could more than triple in size with the copper royalties over 25 to 30 years.
Since this estimate commodity prices have dropped reducing the potential for profits and royalties.
The Polymet project calls for surface mining and mineral processing. Annual metal production would total about 38,000 tons of copper, 9,000 tons of nickel, 400 tons of cobalt, 22,000 ounces of platinum, 87,000 ounces of palladium, and 13,000 ounces of gold. Environmentalists are lined up in opposition to Polymet, with understandable concern that the Project can be a serious threat to water quality in the entire region, including the Boundary Waters. Project advocates include Senators Klobuchar and Franken, and most area mayors who want those quality jobs on the depressed Iron Range. There is a 714-page Draft Environmental Impact Statement for the Polymet Project from the Minnesota DNR and the Corps of Engineers. It is clear from
the statement that most effluent from the project ends up in the drainage areas of the Partridge and Embarrass Rivers. Those rivers flow south to the St. Louis River and Lake Superior, not north to the Boundary Waters.
The DEIS is generally positive about the project, and it suggests that if all of Polymet's commitments are met, there is no serious impact on the environment.
One of the concerns with the proposed projects is the financial status of Polymet and Duluth Metals, relatively small corporations for whom this is the major activity. They will have to to meet the substantial environmental commitments of the project which are described in the DEIS. There is also the costly final closure and remediation, and then the long (perhaps 1,000 years
per the DEIS) follow-up of drainage from leftover tailings and newly created
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storage ponds.
Each of the two projects has a major corporation partner, Glencore of Switzerland and Antofagasta, the world's largest copper miner. Their long term commitment will be essential for approval.
In 2014, world energy demand burned more than 2 tons of coal, oil, and natural gas for every person on the planet. This sent more than 30 billion tons of CO2 into the atmosphere. In response, world legislators are forcing renewable energy programs which require more non-ferrous metals, of which the world now produces a mere 35 annual pounds per capita. The pressures for production from Minnesota's Copper Range will be difficult to resist. A key question is "Can Minnesota regulate that production to safe standards?" I suggest that we can.
Westgard is a geologist and guest faculty in the University of Minnesota Lifelong Learning program. He teaches classes on geology related subjects. A recent class was "Minnesota's Volcanic Geologic History; from Mountain Building to Minerals."
