MINNEAPOLIS - New data suggest that a proposed mine near Ely contains one of the world's largest deposits of copper, nickel and precious metals, along with some of the largest platinum and palladium resources outside South Africa, the company planning the mine told analysts Wednesday.
Duluth Metals Ltd., the Canadian-based parent of Twin Metals Minnesota LLC, significantly boosted its estimates of what could be pulled from the mine based on the data projections, which are measured two ways.
The company said the site has "indicated resources" of 8 billion pounds of copper, 2.5 billion pounds of nickel and 12.1 million ounces of palladium, platinum and gold. The company is highly confident in those estimates because they are based on samples taken from a high number of drill sites.
Duluth Metals separately projects "inferred resources" of 13.5 billion pounds of copper, 4.6 billion pounds of nickel and 15.8 million ounces of precious metals. Those estimates are less certain because they're based on fewer bore holes.
"This is a monster deposit," Duluth Metals Chairman and CEO Christopher Dundas told analysts during a conference call. He estimated the value of the metals at more than $100 billion.
The site is just east of Birch Lake, about 15 miles southeast of Ely. Twin Metals has been drilling extensively in the area for several years and expects to update its projections in August with results from 170 more holes drilled over the past nine months. It also plans further explorations on other land it controls in the area.
Twin Metals said it expects to invest $2 billion to develop the mine and it will create hundreds of badly needed jobs in northeastern Minnesota. Any mining is likely years off. The company is doing a "prefeasibility study" to lay the foundation for the mine plan and environmental impact statements, and that's not expected to be completed until the end of 2013, at the earliest.
Another copper-nickel mine proposed for northeastern Minnesota near Hoyt Lakes is further along. PolyMet Mining Corp. has been revising an environmental impact statement since federal regulators rejected it in 2009. It expects to have the new one early next year. PolyMet says its $600 million open pit project would create about 350 jobs.
Duluth Metals President Vern Baker said the tonnage and grade projections for Twin Metals are significantly higher than PolyMet's projected 32,000 tons of ore per day. Twin Metals projects 80,000 tons a day.
Environmental groups are fighting both projects because the minerals are bound up in sulfur compounds that can leach sulfuric acid and other pollutants when exposed to the elements. They fear runoff from the Twin Metals mine would flow into the pristine Boundary Waters Canoe Area Wilderness, and that PolyMet's runoff would reach Lake Superior.
Betsy Daub, policy director for the Friends of the Boundary Waters Wilderness, said Wednesday's announcement is "a call for Minnesotans to learn more about sulfide mining and what it could mean for this region, and weigh in on whether right next door to the Boundary Waters is the right location for something like this."
No mine of this type has ever managed to avoid polluting nearby waters, Daub said, adding that the record around the world shows they fail to deliver promised economic benefits.
The mining industry insists that modern technology can put Minnesota on the forefront of mining these minerals in an environmentally responsible way.
"Our critics like to use the term `This isn't your grandfather's mine' and they're absolutely correct," said Bob McFarlin, vice president of public and governmental affairs for Twin Metals. "The mining of yesterday that may have caused problems is a thing of the past."
Frank Ongaro, executive director of the industry group Mining Minnesota, said the announcement "puts an exclamation point" on how companies keep finding more and more minerals in northeastern Minnesota. "That adds up to more economic benefit, more jobs for a longer period of time," he said.
The announcement came two weeks after the state approved 77 leases for minerals exploration on state and private land in the region and the U.S. Forest Service signed off on environmental protections to clear the way for the Bureau of Land Management to issue 29 permits for prospecting on federal land there.
Duluth Metals: http://www.duluthmetals.com
Twin Metals: http://www.twin-metals.com
Friends of the Boundary Waters Wilderness: http://www.friends-bwca.org
Mining Truth: http://www.miningtruth.org
Mining Minnesota: http://www.miningminnesota.com