Minnesota's mining boom: New riches or new threat?

The North Woods is being targeted for lucrative, but dangerous, mineral mining.

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ISABELLA, MINN. -- For 30 years, Ron Brodigan has cherished the winters that blanket his two-room log cabin near this tiny town in the North Woods. But soon that cold, white silence could be broken by the relentless grinding of a drill rig.

Beneath his land, on the doorstep of the Boundary Waters Canoe Area Wilderness, lies one of the largest untapped deposits of copper and nickel in the world. And now, for the third time in its history, Minnesota is on the verge of a mining boom.

This one, triggered by seismic shifts in the world economy, will present the state with its biggest environmental decision in a generation: Whether to open its arms to hard-rock mining, an industry that could bring thousands of jobs -- and a record of environmental calamities -- to the wildest and most beautiful corner of the state.

As two multinational mining companies set up shop here, a fierce debate is erupting over what kind of place Minnesota should be.

Opponents say this new kind of mining cannot co-exist with wilderness and clean water -- that it brings risks that dwarf those that came with taconite mining.

"This is beautiful country," said Brodigan, who, along with some other local property owners, is fighting the state's decision to lease their land for exploratory drilling. "And they are bound to wreck it."

Proponents, including many of the state's leading politicians, say the state can have both. New technologies, sharp regulatory oversight and legally binding financial protections will preserve the state's lakes and forests for future generations, they say.

Just this month, at the request of the mining industry, Gov. Mark Dayton created a new mining coordinator and a subcabinet of top state officials assigned to expedite and coordinate environmental review and permitting for mine projects.

"You have to balance the recreational needs with the fact that you are creating tremendous long-term employment," said Ernie Lehmann, a mine executive and longtime mining advocate.

State and federal regulators are nearing the end of the environmental review of the first proposed project, near Hoyt Lakes. But engineers who specialize in mining say even the best designs and highest scrutiny are not fail-safe.

Some modern hard-rock mines have fulfilled their environmental promises, and some have failed spectacularly, said Stuart Jennings, a geologist and mining consultant in Bozeman, Mont. "These are massive disturbances on the landscape, and there will be impacts," he said. "Sometimes they are negligible, and that is the best-case scenario."

Copper-nickel deposits

A century after finding vast iron deposits in northern Minnesota, mining interests discovered copper nearby in the 1960s.

It's contained within the "Duluth complex,'' a geological formation that forms an arc across the Arrowhead region and extends below ground one-third of the way to the earth's core. Though the deposit is low in concentration -- about 5 pounds of copper per ton of rock, at best -- the volume is enormous.

For years, the deposits were considered too expensive to mine because of their depth and low concentration. But the economic boom in China and India has helped push copper to nearly $10,000 per ton, making Minnesota's deposit much more alluring. The ore also contains smaller amounts of nickel, palladium, gold, cobalt and platinum -- all metals in huge demand for computers, smart phones, solar panels and medical devices.

"Minnesota is sitting on something special in terms of the world economy," said Bob McFarlin, vice president of public and government affairs for Twin Metals, the Canadian company that is developing an underground mine near Ely.

Not to mention the green economy, he added. A single wind turbine can contain nearly 5 tons of copper.

The industry is predicting a rebirth of northern Minnesota's once-vibrant mining industry, one that many residents would like to see rise again.

McFarlin said copper mining will create the kinds jobs that provide a good life -- the kind "that let you send your kids to college."

As a down payment on that promise, Twin Metals has built a beautiful, $1.5 million glass, steel and copper office building in Ely.

Taxpayers also stand to benefit. The state could collect up to $2.5 billion in royalties from mining on state-owned property in coming decades, according to one state study.

PolyMet, a Canadian company that is proposing a vast open-pit mine and processing facility near Hoyt Lakes, says it will create 360 "high-quality" jobs and an annual payroll of $36 million.

Others, however, doubt those numbers.

"Job predictions are often inflated," said Betsy Daub, policy director for Friends of the BWCA, who points out that mining has had boom-and-bust cycles.

But above all, they say, jobs must be balanced against serious environmental risks.

To use the valuable ore, mining companies must extract it from tons of sulfur-bearing rock, a process that creates sulfuric acid that can leach heavy metals, including mercury and arsenic, into groundwater, rivers and lakes. In high concentrations, that acid drainage can make water lethal to wildlife and undrinkable for humans. And it can persist for decades, long after a mine has closed.

All the potential mine sites near Ely drain into the Boundary Waters Canoe Area. PolyMet's would drain to the St. Louis River and its estuary, a primary wildlife incubator for Lake Superior.

Mining vs. tourism

Skeptics also say Minnesota shouldn't forget the region's other valuable asset -- the $700 million tourism industry, which depends on pristine woods and lakes.

The threat to tourism is "the albatross around our neck," said Jane Koschak, who along with her husband, Steve, built the River Point Resort just outside Ely into a thriving business.

Their resort and outfitting business, which began life as a simple family fishing camp, sits on the north edge of Birch Lake, a northern Minnesota classic, with high rock walls, loons and bays of wild rice.

But Birch Lake is now ground zero for future copper mining. The surrounding national forest is dotted with drill rigs that operate day and night, mapping ore deposits. Five companies have purchased exploratory drilling leases within the 1.7-million-acre Superior National Forest, and more are pending.

The Minnesota Department of Natural Resources is selling exploratory drilling leases on state property and on certain private property where the state controls the mineral rights -- a total of 621 parcels, including Brodigan's 200 acres outside of Ely. DNR officials point out that they have twin roles -- managing natural resources as a source of revenue to the state as well as protecting them for future generations.

Twin Metals, which hopes to drill beneath Birch Lake, says that, mindful of environmental risks, it is creating models that would predict the impact of mining on groundwater and surface water.

But engineers say such models are not always accurate. And just the presence of the mine could forever alter the nature of the lake and send their customers away, the Koschaks said.

"This is where we live," said Jane Koschak as she looked out over the wind-scudded lake on a cool day in July. "Our entire lives will have been wasted."

Superfund sites

Her fears are grounded in the often disastrous history of hard rock mining.

In 1991 acid runoff from the Summitville Mine in Colorado killed all life in a 17-mile stretch of the Alamosa River. The gold mine, owned by a Canadian company that eventually filed for bankruptcy, is now a federal Superfund site.

In the 1990s the Gilt Edge Mine in South Dakota leached cyanide into groundwater and nearby creeks, and in 1995 acid drainage from mining waste piles flowed into Ruby Gulch Creek, killing off the fish population. It was declared a Superfund site in 2000 after its owner filed for bankruptcy.

In 2004 the federal government estimated that it would cost taxpayers $7.8 billion to clean up 63 of the mining operations designated as Superfund sites by the Environmental Protection Agency; cleaning up all abandoned hard-rock mines would cost between $20 billion and $54 billion.

Mining executives in Minnesota don't dispute that legacy. But, they say, mining techniques have improved markedly in the past decade. Today, for example, they can use reverse-osmosis water treatment plants to reduce the risk of hazardous runoff. New technologies can process ore without the air pollution produced by traditional smelting. They also argue that the risks from acid drainage are less in Minnesota because the rock has much lower concentrations of sulfide than in the West.

They hope to convince the public and regulators that they can protect the fragile ecosystem in northern Minnesota. "We will bear the burden to answer those questions," said Twin Metals' McFarlin.

A pivotal question is how much "financial assurance'' the mining companies will provide to cover the cost of future cleanups, even long after the ore is played out.

"We cannot tolerate a situation where big mining companies take the profits'' and leave pollution behind, said Scott Strand, executive director of the Minnesota Center for Environmental Advocacy, a nonprofit law firm in St. Paul.

Mining proponents say such sums, now required by state and federal laws, will be adequate to cover any significant failures. The environmental review of PolyMet's project is expected to wrap up in January, with the permitting and financial assurance calculation to follow sometime next year.

Brad Moore, a PolyMet vice president, said that quite apart from financial assurance, the company plans to use the most up-to-date antipollution techniques. The waste rock and tailings, for example, will be stored in water-filled pits that are dammed and lined with impermeable materials. Jennings, the mining consultant, says such systems have been used successfully elsewhere.

But for how long? Moore said PolyMet is still trying to figure that out. The answer, however, is crucial because even the best protections don't last forever, Jennings said.

"All dams fail. And all liners leak," he said. "Sometimes the leakage is inconsequential. Sometimes very consequential."

Josephine Marcotty • 612-673-7394

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