Duluth Metals Ltd.’s proposed copper and nickel mine near Ely should be competitive, profitable and sustainable over 30 years, according to a draft feasibility study released Wednesday.
The Twin Metals Minnesota Project, which proposes mining 50,000 “short” tons of minerals per day from the Maturi deposit in the northeastern corner of Minnesota, still must secure financing and pass environmental reviews.
Financial analysts, however, said the project still appears a long way from reality and pressed the Toronto-based company for more details. Minnesota’s other proposed copper and nickel mine — PolyMet Mining Corp.’s project near Hoyt Lakes and Babbitt — has been in a regulatory quagmire for nearly a decade.
“We believe this is one of the great projects in the world and we don’t need to get anywhere near a worst-case scenario,” Christopher Dundas, Duluth Metals chairman, said in the conference call. “We are encouraged with this project. And we think there is very good growth we can build on over the next few years.”
Duluth Metals CEO Kelly Osborne said the new independent report “validates the Twin Metals project to be one of the most compelling greenfield copper-nickel development projects in the world. The foundations of the project are its tremendous mineral resource, technically sound engineering and test work, strong operating margins and location in a state that supports the mining industry.”
The project is located 9 miles southeast of Ely and 11 miles northeast of Babbitt. The firm estimates it will eventually employ 850 people.
The draft study said the underground mine could ultimately produce 5.8 billion pounds of copper, 1.2 billion pounds of nickel, 1.5 million ounces of platinum and 4 million ounces of palladium. It also should deliver 1 million ounces of gold and 25 million ounces of silver. The project has a “net present value” of $1.4 billion after taxes and the minerals are “anticipated to be marketable to customers across the world,” the report said.
A final technical report is expected to be completed in 45 days.
While Duluth Metals plans to open a new mine, PolyMet has proposed reopening a taconite mine and processing plant to be used instead for copper and nickel. Regulators and environmentalists have scrutinized the project extensively because of the prospect that the mining process could leach sulfuric acid into nearby lakes. In 2009, the U.S. Environmental Protection Agency gave the PolyMet proposal its lowest rating for environmental safety.
The St. Paul-based company worked with regulators to address concerns and, in April this year, received the EPA’s second-highest rating for a revised environmental impact study. That study, still in draft form, could be approved by the agency within a few months of being finalized.