Asked whether legislation affecting a favored northeast Minnesota industry can pass the Legislature if Iron Range DFLers are solidly against it, the Range delegation’s dean, Sen. Tom Bakk of Cook, smiled broadly and confidently.
“Unlikely,” Bakk said. “They’re up against some pretty tough timber.”
Added Sen. Tom Saxhaug of Grand Rapids: “We know what to do.”
Their disaffection was directed at bills introduced last week to require mining companies to financially assure payment for reclamation and environmental damage from sulfide copper-nickel mining, even if problems show up long after operations have ended or companies quit for reasons including bankruptcy. The bills also require companies to fully treat potentially harmful sulfur-water drainage during mine operations so no further treatment is required after shutdown.
Companies would have to show the money before they could start to mine, and while exact costs aren’t known because “nonferrous” sulfide mining hasn’t been tried in Minnesota, varying estimates put the tab at $70 million to $150 million added to investor liability.
“This would make copper-nickel mining in Minnesota impossible,” said Rep. Tom Anzelc, DFL-Balsam Township in Itasca County.
“Not just for sulfide mining,” added Sen. David Tomassoni, DFL-Chisholm. “This would also cripple iron mining on parts of the Range.”
Asked whether he thought the bill would kill a major new industry and jobs that go with it, Tomassoni snapped: “Yes.”
Prolonged debate
And so the first gauntlets fell at the Capitol on a DFL wedge issue pitting Iron Rangers against what Rep. Tom Rukavina, DFL-Virginia, called “my liberal friends in the Twin Cities who want their windmills and electric cars and solar panels but don’t want the mines that produce the metals these projects need.”
Anzelc and Rukavina said they’d be more explicit with their views would it not be for what Rukavina said is a “deep respect” on the Range for the bill’s House author, veteran Rep. Alice Hausman, DFL-St. Paul.
The Senate author is Sen. Jim Carlson, DFL-Eagan, a freshman who has garnered respect among lawmakers.
Decorum aside, if the long-anticipated mining bills show traction in the Legislature observers see a prolonged debate taking on the still-simmering rancor of famous 1980s knockdowns over federal wilderness protections for the Boundary Waters Canoe Area (BWCA).
And the history with wilderness will be on the minds of some because the Minneapolis-based Friends of the BWCA is a principal advocate for the legislation, along with the Minnesota Center for Environmental Advocacy (MCEA) in St. Paul.
In talks with reporters last week, Carlson said that public concern about the potential for environmental degradation from sulfide mining is strong, and not just in the Twin Cities.
“If this mining can’t be done right, the public may push to do what was done in Wisconsin and place a moratorium on sulfide mining,” Carlson said. “This bill is not anti-mining, and it should be viewed as finding a way for mining to proceed.”
Later, Carlson was seen huddling with Bakk at the Capitol. Carlson has said that he’s open to discussions about how the bill’s requirements may be done without excessive investor burden.
Mary Marrow, an MCEA attorney, said she’s surprised over the negative reaction to the bill.
Marrow said the financial assurance requirements are in effect in several states, including Montana, New Mexico and South Dakota. Also, she said, the water-treatment provision is actually more flexible than a similar requirement in Michigan law.
Still, the Range’s economy is troubled. The timber industry has been battered for years with a falloff in residential construction and more recently there have been painful layoffs in the taconite industry in response to dampened demand for iron.
Bakk said he just learned that Essar Steel of India couldn’t get all the financing it needs for a $2 billion project near Nashwauk, and that Minntac at Mountain Iron had just announced worker layoffs.
Industry problems
Regardless of what happens to the Carlson and Hausman bills at the 2009 Legislature, the copper-nickel industry is facing several problems of its own.
For one, the price of copper has plummeted from a high of $4 per pound last July to less than $1.50. Local mining experts have said that the price must remain above $1 for a mine to be economically viable.
The first sulfide mine slated to open in the state would be by Polymet, whose open-pit mine would be in the area of the old LTV taconite mine between Hoyt Lakes and Babbitt. The $600 million mine would employ some 400 workers, the company has said.
Polymet officials had expected the mine would be open by now, but prolonged delays have occurred in the preparation of an environmental impact statement (EIS) headed by the Minnesota Department of Natural Resources (DNR).
That EIS has been in development for over three years and a preliminary draft is now being circulated to state agencies, mining interests and advocacy groups.
Last year, the MCEA said that if the EIS doesn’t fully examine an underground mining option that the group would legally challenge the document.
Marrow said her review of the circulating draft is that the underground option has not been fully examined and, she said, the document itself “needs a lot of work.”
That could add up to still more delay, especially if MCEA moves ahead with a lawsuit on the underground-options issue.
Of the several companies in the queue for permits to mine in Minnesota’s expansive Duluth complex, Polymet’s application has proceeded the farthest and it appears that the company is financially set to get through the EIS process due to a cash infusion from a marketing agreement with commodities-supplier giant Glencore.
Bakk and the Iron Range delegation, together with the mining industry, said they believe that there are adequate state laws in place.
“We don’t need more laws and regulations,” said Frank Ongaro of the mining advocacy group MiningMinnesota, who called the new legislation unnecessary.
Ongaro’s position has been echoed by the DNR and the Minnesota Pollution Control Agency, but advocacy groups don’t agree.
In testimony on the sulfide mining issue a year ago, witnesses recounted a list of examples where similar mines in North America, notably in Montana and Colorado, were closed and the states were left with cost of cleanup that ran into the hundreds of millions of dollars.
“The taxpayers don’t want that to happen here, and taxpayers shouldn’t be left holding the bag,” Carlson said.
Ron Way covers the environment and energy issues. He can be reached at rway [at] minnpost [dot] com.
