New mining era for northeastern Minnesota -- and new environmental worries

Even before giant shovels begin peeling away tons of overburden to launch a new mining era in northeastern Minnesota, legislators and others are pondering what happens when the mines shut down.

The first "nonferrous" open-pit mine is set to open as soon as an environmental report is completed and state permits are issued as early as late this year. But unlike iron mining that has defined the Arrowhead's economy for more than a century, mining for copper, nickel and other metals will literally bring to the surface sulfides that can combine with air and water to produce sulfuric acid that can be environmentally deadly.

Industry advocates insist there's nothing to worry about, and that has environmentalists plenty worried.

"The more informed one gets about copper mining, the more one learns not to trust the industry and to fear the scale and persistence of its pollution," said Clyde Hanson of Lutsen, Minn., a co-chair of the Sierra Club's "Mining Without Harm" campaign.

On Friday in St. Paul, a joint Senate-House hearing involving the Legislature's leading environmental committees will hear from industry advocates and its doubters about how to protect the state's environment and financial resources if the new industry goes bust and bolts, leaving a costly cleanup as already happened in Colorado and most Appalachian states.

"We have a duty to protect the state financially, and we aim to do just that," said state Rep. Jean Wagenius, DFL-Minneapolis, who chairs the House Environment Finance Division.

New to Minnesota
The issue is how to ensure that before mining starts the companies put up enough money to pay for reclaiming the mined-over lands once the ore is removed — or the companies go bankrupt in the fickle economic world of hard-rock mining that already has seen a recurring boom-bust cycle on the state's Iron Range.

Minnesota has special rules for "nonferrous" mining that require companies to put upfront cash for reclamation and environmental protection and to annually review whether the dedicated amount is enough. The challenges are to make certain the financial commitment is binding, the cash is readily available in the event of a rapid shutdown or a catastrophe, and the cash is enough to cover foreseeable events that, it turns out, are difficult to foresee.

"We're concerned generally about sulfide mining; it's new to Minnesota and we need to be cautious," said Janette Brimmer, legal director for the Minnesota Center for Environmental Advocacy.

Geologically, it's far from new: 1.1 billion years ago lava oozed across the Arrowhead and was dubbed the "Duluth Complex" (its durable remnants are visible at the North Shore's Palisade Head near Silver Bay). Heat from the event leached out copper, nickel, platinum, palladium, cobalt, and even gold in quantities so small that extraction wasn't economical.

However, today's emerging economies in China, India and elsewhere have helped drive world metals prices to historic highs, and suddenly modern-day prospectors are punching dozens of test holes into the Duluth Complex to figure out where the metals are. According to MiningMinnesota, a trade group for the "new era" nonferrous mining industry, there are at least four billion tons of mineable metals scattered throughout the Complex.

But it's low grade stuff with less than a percent of everything in the ore body yielding metal — and the worrisome sulfides that come with it. This means that nearly all material removed from the mines will be "waste" piled into massive mountains of rock with crushed residue from the initial ore processing dumped into "tailings basins" and, hopefully, prevented from leaching into streams draining into Lake Superior or the Boundary Waters Canoe Area (BWCA).

"Nearly half of the rivers in the western U.S. have their headwaters polluted by sulfide mining," said Hanson.

Company poised to begin operations
But that won't happen here, pledges MiningMinnesota's Frank Ongaro, who adds that companies will have "zero water discharge" and will line and cap waste rock to prevent any discharge of the toxic sulfuric acid.

The first of several companies seeking to move forward is Polymet Mining, technically based on Vancouver, British Columbia (only because the company's president, William Murray, hasn't yet joined his entire staff in Hoyt Lakes, Minn.). Polymet's very first mine venture anywhere will be an open pit near Babbit, Minn., where the company has purchased the defunct LTV operation including its rock crushers and tailings basin. Polymet also has rights to LTV's railroad and equipment to eventually ship its processed product to Taconite Harbor on Lake Superior.

LaTisha Gietzen, Polymet's vice president for public and environmental affairs, said the company is poised to begin operations as soon as state permits can be obtained. The Department of Natural Resources is expected to release a draft environmental statement in March and the company hopes to have its state permits sometime this fall.

Even by Iron Range standards the emerging industry is huge. Polymet's operation is valued at $380 million and is expected to require 400 or more fulltime jobs over the anticipated 20-year life of the mine.

There is also Franconia Minerals that is prospecting with test holes in the area of Birch Lake (near the BWCA) and anticipates a $616 million underground operation with 550 regular jobs to begin operation in 2011. At least four other companies are actively prospecting their leases in the Duluth Complex.

How the mining process works
Fully operational, the mining process is generally like this: waste rock is removed and stored in massive piles over sealed liners and, later, covered to prevent any of the inevitable sulfuric acid from draining into surface or ground waters. Metalic ore is sent to crushers with the tiny quantities of copper, nickel, palladium platinum, cobalt and gold drawn out in a chemical flotation process, with waste "tailings" dumped into a large basin.

The remaining ore contains up to 15 percent metal along with its sulfides, and that's sent to an "autoclave" process (that replaces the smelter of yore) that adds pressure and heat (provided by sulfur in the ore) that produces nearly 100 percent metal, most of which is formed into 4-by-6-foot plates (the powdered gold is put into bags) for shipment to product processors. Gietzen said the residue from the autoclave process is neutralized with lime that becomes gypsum that will initially be put into landfills but may be further processed into wallboard for use in home construction.

But it's not always as tidy as that, according to mining expert David Chambers of the Montana-based Center of Science in Public Participation.

Chambers, who will testify at Friday's legislative hearing, tells of the Sumitville mine in Colorado where the mining company went bankrupt and left the state with a messy cleanup that cost more than $200 million. The company paid only $4.5 million of the cleanup cost.

Which gets to two questions that will be examined Friday.

First, how can the mining companies guarantee that they will cover the cost of cleanup? Polymet says it favors insurance, but Brimmer said that in bankruptcy or contested cases insurance money is hard to get. A lawyer, she favors a "non-expiring letter of credit" that is the most direct avenue to cash when it's needed in an emergency.

Second, how much should the mining companies put up? Brimmer favors $70 million to $150 million, but neither Ploymet nor others in the industry have commented on an amount.

Another option is expected to be proposed to legislators: copy Wisconsin's "Prove It First" law. Brad Sagen of the Ely-based Northeastern Minnesotans for Wilderness says the law requires that metallic sulfide companies seeking to mine must first show that similar mines have operated successfully in North America for at least 10 years. 

Ron Way, a former reporter for several Midwest newspapers, covers the environment and energy issues. He can be reached at rway [at] minnpost [dot] com.