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With nonferrous-metal demand rising, pressures for production from Minnesota’s Copper Range will be difficult to resist

Little noticed in our 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.

Little noticed in our 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 nonferrous metals like copper, nickel and cobalt. One reason for this demand is their use in energy systems that provide transmission, rechargeable batteries, and wind turbine technology.

Commenting on the Metorex bids, Andrew Ross, partner at First New York Securities LLC, said, “The Chinese and the Brazilians have voracious appetites for mining assets. There’s a race for assets worldwide going on. China and Brazil are at the forefront of that race.”

Dwarfing the mineral assets of Metorex Ltd are world-class mineral deposits that lie in a band meandering from southwest to northeast, adjacent to the Archean granite of Minnesota’s Iron Range. This resource has attracted several proposed mining ventures, including one by Polymet Mining 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.

A 228-million-ton project
The PolyMet project calls for surface mining and mineral processing of approximately 228 million tons of copper-nickel-platinum ore over approximately a 20-25 year mine life. PolyMet expects to mine, on average, 91,200 tons per day of material, which would include about 32,000 tons of ore and 3,900 tons of overburden and 55,300 tons of waste rock. Annual metal production would total 39,000 tons of copper, 9,000 tons of nickel, 400 tons of cobalt, 22,000 ounces of platinum, 87,000 ounces of palladium, and 13,800 ounces of gold.

Environmentalists are lined up in opposition to PolyMet, viewing the project as a serious threat to water quality in the entire region, including the Boundary Waters Canoe Area Wilderness (BWCA). Project advocates include Rep. Chip Cravaack, Sens. Amy Klobuchar and Al Franken and most area mayors, who want those quality jobs on the depressed Iron Range.

There is a 714-page Draft Environmental Impact Statement (DEIS) for the PolyMet Project from the Minnesota DNR and the Corps of Engineers. It is clear from the statement that any 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 BWCA.

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. The following quote from the DEIS on the Partridge River applies to its analysis of the three rivers involved:

“Even with these higher loadings and assuming no natural attenuation, the model results indicate that water quality standards for the Partridge River would be maintained for the eight constituents studied (i.e., antimony, arsenic, fluoride, cobalt, copper, nickel, vanadium, and sulfate) under all flow conditions and mine years modeled. Therefore, even using relatively conservative assumptions, the Proposed Action is not predicted to result in any exceedances of surface water quality standards for the Partridge River at the modeled locations.”

A relatively small corporation
One of the concerns with the PolyMet project is the financial status of PolyMet, a relatively small corporation for whom this is the major activity. PolyMet will have to meet the substantial environmental commitments of the project, which are described in the DEIS. There is also the final closure and remediation , which is estimated to cost $50 million, and then the long (more than 1,000 years per the DEIS) follow up of drainage from leftover tailings and newly created storage ponds.

The Duluth Metals/Antofagasta project is primarily underground, with fewer environmental concerns. And the presence of Antofagasta assures strong financial backing.

In 2010, 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. World legislators are forcing renewable energy programs, causing increased demand for nonferrous metals, of which the world now produces a mere 35 annual pounds per capita. Their price is rising as shortages develop. The pressures for production from Minnesota’s Copper Range will be difficult to resist.

Rolf Westgard is a professional member of the Geological Society of America