Nothing’s going to get better for the Iron Range until we stop talking about 30-year mining plans and start talking about five year reform plans.
These thoughts have been building for a time and it will take more than one post to explore them all. A recent headline pushed me to start. David Shaffer at the Star Tribune explores a new DNR report declaring that two specific copper/nonferrous mining projects in northern Minnesota could net up to $2.5 billion for the Permanent Schools Fund over the next 25-30 years.
Wow. That sure seems like a lot of money. Let’s take a look at this.
Briefly, mining in northern Minnesota involves land leases that yield money for the state, and production taxes that yield money for Iron Range communities and schools. All of this yields profits for the mines. Mines do not pay property taxes within the legally defined mining area. Generally, this system has worked well over the modern age of mining.
The story as it would appear from afar is this: Mining companies want to mine different minerals on the Iron Range. This would create jobs and revenue. However, there is an environmental risk and political debate which have slowed permitting to the chagrin of many locals. All of this is true, but only the tip of the ore dump.
First, as the story in the Star Tribune indicates, these two mining interests — Twin Metals and Teck Resources — are in varied states of readiness. Both have long, litigious journeys to gather so much as their permits, much less the economic impetus to begin nonferrous mining. Mining developers, however, would be quick to say that the minerals are there, the demand is going up, and that nonferrous mining here is a longterm opportunity for the region.
Tuesday’s report comes from the DNR, which by virtue of a slightly odd quirk of state law, not only regulates mining in Minnesota but also manages the Land Trust, monitoring its investments and, in this case, its potential revenue sources. DNR officials thus face the dual, sometimes opposing instincts to limit mining’s environmental impact and enhance mining’s economic impact. Which one wins? Well, sometimes one, sometimes the other. The result is a long permitting process punctuated by euphoric economic impact reports like this.
Bear in mind that all of this discussion centers around brand new mining operations extracting minerals other than iron, upon which the region has built its name and entire economic, tax and political system. For 50 years now workers have rolled low grade taconite ore into pellets for the blast furnaces in eastern steel mills. Before that, 60 years of natural ore mining literally created the region’s towns and built the state of Minnesota and the United States of America. This new form of mining may or may not be as environmentally sound as modern taconite mining. Set that aside. More importantly, this new mining has not been economically proven. Copper prices are all over the place; generally up, but prone to rapid drops. Copper extraction is different than iron extraction, more expensive and technically difficult. Even if you can mine it safely, a matter of debate, you are highly unlikely to mine it profitably on a three-decade continuum.
What I’m saying is take this promise of $2.5 billion over 30 years in context. That’s a lot of money in one year, a little less impressive when you consider the annual breakdown. It also represents the wildest fantasy of mining officials, not the economic reality we are so prone to ignore. Half of the Iron Range’s taconite plants can’t promise 30 years of life, why should we assume the same of yet-to-be-built mines extracting the much more economically volatile minerals of copper and nickel? It’s possible, sure. Lots of fantastical things could happen that would improve the Range’s fortunes.
The more dangerous problem is that right now, somewhere on the Iron Range, there is a school board member, a city councilor, a county commissioner or local businessperson reading this same information. They will take it as a cue to wait. Wait to fix the declining local schools. Wait to fix the dwindling budget situation in our towns. Wait to own up to the fact that only new revenue from a modern economic innovation will save us.
Some of my ancestors come from Cornwall, England. In the 1880s young men poured out of Cornwall when the mines closed. They moved to mining regions all over the world including the Iron Range of Minnesota. Nevertheless, mining continued on a reduced scale in Cornwall. Someone told me recently they had visited Cornwall and the old men giving the tours of the mines told everyone that there was still ore down there, new minerals. As soon as it was economically viable they were going to go back down there. They would mine again, someday. Just let them mine.
These old men wait, watching the tourists pass them by. How long will they wait? How long will we?
I’m very concerned about the environment and these mines. But I’m also reading this in context of our local township issues, in which a large project has been protested in light of possible run off into a creek. The engineer has been quoted as saying he would drink the run off if he had to, certainly before he would consider drinking the creek water. But I wonder if the people protesting the project are more “liberal” about the environmental issues and the mines. Liberal in this context means letting the mines liberally allow runoff. [Perhaps you can figure out a better way to express this.]
Not to beat the dead horse, but we need mining up here. Who believes with our current tax situation (top 10 in state taxes),bottom 10 in the business friendly (rated by Better Business), cold winters, short summers that folks are lining up to build and invest in the Range. We’ll thumb our noses at 400 plus PolyMet jobs, but hold our breath for 20 green jobs that may be on the horizon….. Then we debate why we’re in trouble up here, just crazy to me.