This winter, Minnesota’s state legislature will convene with divided leadership — Democratic-Farmer-Laborites, under Iron Range Sen. Tom Bakk as majority leader, still control the Senate; while Republicans, under Speaker-designate Rep. Kurt Daudt of Crown, have taken over the House. Gov. Mark Dayton, a DFLer, will remain in the executive office after a decisive re-election campaign.
A few weeks ago, Daudt announced new House committee structures, one of which stood out to me: the new “Mining and Outdoor Recreation” committee. On the surface, this seemed odd. Mining and outdoor recreation are only ever related to one another here on the Iron Range, one small part of the state. Further, both represent a relatively small portion of the business before any given legislature. In essence, this was a political strategy disguised as a legislative committee.
Many were waiting to see what Sen. Bakk would do to counter in the Senate. How he structures committees there will affect how the two chambers interact during legislative negotiations. Today he announced two committees related to the environment: Environment and Energy, chaired by Sen. John Marty, and Environment, Economic Development, and Agriculture chaired by Sen. David Tomassoni, another Iron Ranger. It would stand to reason that any mining legislation, if introduced, would go through Tomassoni’s committee.
Tomassoni and Bakk are both member of the strongly pro-mining Iron Range delegation, indeed among the most pro-mining members of that caucus. So it’s not beyond reason to assume that House mining legislation will get a hearing in the Senate. But to what end?
PolyMet is awaiting the multi-agency response to its Environmental Impact Statement, the result of which could lead to permits being issued later in 2015, barring any delays or problems. Nothing the state legislature can do in 2015 can make this faster. By the time the session starts, the MPCA will be in the process of replying to comments. Even if the legislature took some outrageous action to demand permits immediately, the federal EPA would exercise its right to hold their permits until the process plays out, just the way it is now.
Besides, Gov. Mark Dayton wouldn’t sign something gutting the MPCA anyway, nor is he running for re-election, nor is that remotely a good idea because of the legal ramifications that would cause decades–long delays. There is really no reason to have that fight, except for the fact that GOPers continue to believe that artificially pressing the mining issue will increase their chances of winning in future elections. That, and because Range DFLers fail to see how they’re getting played like a tin pan alley piano by The Company* and a Republican party that would fly the Range delegation out to the Canadian tundra and drop them from a helicopter if they only could.
Fact is, we’ll have some very important announcements about PolyMet in 2015, and these will have huge influence on the entire debate over mining in Northeastern Minnesota. I’d rather see a process that produces a scientifically-vetted conclusion (even if no conclusion will satisfy everyone). It might be fun for some politicians to craft the political image of hootin,’ hollerin’ developers doing jumps on four-wheelers off the berms and dumps of an Iron Range mining landscape. But we can’t really move on with this issue until it’s completed a very specific process, a process that has dragged on partly because of red tape but also because of company-induced delays.
Apparently, the continued failure of mining politics to dramatically change the electoral outcomes of elections in Minnesota isn’t enough; we have to go for another two years of this. Or four. Or six. Really, it won’t stop until the people of Northern Minnesota demand what we really need: economic diversification that includes more than just mining.
###
* “The Company” used to refer to the Iron Range’s Oliver Mining Company of half a century ago. Now it refers to a nebulous mix of international mining conglomerates, whose names and activities can’t be seen by most mortals. Rhetorically, the words function much the same way.
This piece was cross-posted with my Up North Report blog at the StarTribune.com.
If they give Polymet the permits they have been working for the past 5-7 yrs all the copper/nickel that is now being mined without supervision world wide will be mined safely here. No brainer for all the Greenies that care about our planet.
Aaron–You’re the only one who is willing to accurately verbalize the political scene of the Iron Range.
The old guard is not taking us to a new future. We just keep repeating the past.
Unfortunately for the future of non-ferrous mining on the Range, the cost of extraction of minerals from the deposits in the Duluth Formation are the highest of any operating mines in the world. That is why the resources have not been exploited until now. This has nothing to do with regulation, it is purely due to the nature of the deposits and the cost of steps that must be taken to extract useable ore.
That means that in any setting in which there is a surplus of copper or other metals the Range mines will be the first to close and last to re-open, and why there will be price conditions that will cause mining to stop and workers to be “furloughed.” It also means that none of the big international corporations that own and will source ore from the mines will be closing down operations overseas that produce minerals at lower costs in order to produce more expensive ore in Minnesota.
That is why the Twin Metals operation is currently on hold, as Aaron noted in an earlier post. That is why if PolyMet were currently operational, Glencore may well have shut it down temporarily. This is the same phenomenon that we are now seeing stop opening of new wells in the Bakken and slow operations in the Tar Sands — oil at $60 a barrel is not profitable for new fracking operations and extraction from Tar Sands sources due to higher costs of production.
This is part of the problem with extraction economies: they are extremely cyclic due to fluctuating prices of and demand for the products. We have of course seen this for years in the iron mining industry. The non-ferrous mining industry is even more unstable, and even more susceptible to competition from cheaper overseas sources in times of slack demand. And those are problems that exist before the inevitable end of production due to exhaustion of resources.
In the end, Range metals will not lead to production stopping in the notorious operations run by the mining companies in places from New Guinea to Chile and to overall cleaner production world wide. In reality, those overseas operations will cause cyclic shutdowns of the more expensive Range sources when demand and prices decrease, as is happening in the current European, Indian, and Chinese economic downturns.
This does not mean that the mines should not be opened if they can do so safely, or will not be opened, but it does mean that they will not be a factor in decreasing demand for “dirty” ore from cheaper mining overseas, and that they will help contribute to instability of the Range economy, with more wealth during booms and deeper crashes and more padlocked gates during busts.
Polymet, Twin metals and every other company that is trying to get permitted to mine on the Range has done study after study to see if mining up here is profitable. They understand the price of copper/nickel will fluctuate,but demand for the metals has been on a steady climb for yrs. I don’t worry about the padlocked gates too much…. I worry about getting permits and getting started employing our fellow Rangers.
Rather than a “steady climb” it would be more accurate to say a “persistent upward trend.” The climb, while real, has been a jagged sawtooth graph with wide up and down swings. Oil has shown exactly the same trend, with results people are much more familiar with. At this moment, metal prices, like oil prices, are in a trough, which is why Antofagasta has put Twin Metals back on the shelf for now.
Non-ferrous mining on the Range will be profitable for the companies in the end. For them, this is a long range proposition, with mining stretching for decades of on again off again operation. They are in the position to open and close mines at will, to source metals from wherever they are most profitable, and to wait out the inevitable fluctuations. At historic high prices, copper and nickel from the Range will be profitable, and the companies can keep the ore in the ground during the inevitable periods of downturn.
As to the permitting delays, PolyMet would probably be up and running right now if the company had done a decent job on their initial proposal — for example presented the plan they are now offering. International mining companies, however, are like all businesses. They are trying to maximize their profits, and minimizing the costs of environmental protections is one good way to do that. Creating situations where downside risk of environmental failures is born by taxpayers, not the companies, is another good way. All that is their correct role in economic models and management responsibility to shareholders — push for the best, least expansive, and most profitable deal, whether dealing with natives of the New Guinea Highlands or the people of Minnesota. The job of pushing back on that belongs to our regulators and government.
This is like buying a used car. The company made an offer that was not a good one, but if we had taken it would have given them a higher profit. We — the EPA in this case — turned that offer down and asked for a better one. They responded with a better one, which is now being reviewed by our agencies.
Even the executives from PolyMet publicly concede that their first proposal was inadequate, They are the ones responsible for the delays, but that is part of their negotiating strategy in trying for the best possible deal for themselves. It is the responsibility of our government agencies to get the best possible deal for us.
You are correct in your analysis of Polymet and their desire to make profits where we differ is your feeling that govt agencies are looking out for you. Fed/state agencies are totally agenda driven either they are selling off their “wares” for money or votes. I prefer corrupt businesses over corrupt politicians or corrupt Fed/state appointees that use our tax dollars to curry favor for whatever agenda is flavor of the month.
I would not describe the policy of businesses to seek the highest profits as corrupt. It is what they are supposed to do. It is someone else’s job to see that they do not light fire to rivers, putting brakes on the natural race to the bottom that competition and the responsibility to maximize profits cause.
I am curious about one thing. Since, as you note in your comment that starts this chain, left to their own devices without some power pushing back, the international mining companies will create mines that are environmental disasters, who do you see as being that power if not government and government agencies?
Get the Fed out of Minn mining for starters. Have a local elected citizen board (not appointed cronies) and a state EPA make sure the mining is safe for N Minn. Every worker now days has a cell phone/camera/video so the days of reckless mining are a thing of the past. As with all Fed programs that are left unchecked by voters, the EPA has become a litigation stop for every Green cause under the sun. Check the amount of money their lawyers (and legal firms friendly to the cause) make suing logging, mining, coal and oil/gas operations…. Staggering and sickening. If N Minn citizens want to mine copper/nickel then we should decide it not a Fed Govt board of Green idiots from California, DC, Chicago and New York who have never seen our area but are convinced mining scars Mother Earth and is bad.
The purity of the modern multi-national, a most amazing argument. I will pin that to my ” best examples of Neanderthal reasoning” board right now. Let us look at the “purity” of extractive corporations such as Shell, BP or Glencore. First, the complaints about big, bad ol’ guvamint. Any examination about corruption in government will usually find a corporation seeking profit behind it. Whether Bill Frist’s family corporation, HCA, anything involving a new weapons system or Glencore’s or oil operations in Peru or Nigeria, it is the corporations driving the corruption, human rights violations and pollution. The government is either merely a co-opted or captured element. In fact, it is the one entity by which citizens actually have power, unlike the corporation which is a psychopathic monstrosity designed to shield the owners from consequences while at the same time giving them legal rights. Apparently it needs reminding that this is not a human rights project, and that argument is such an elementary logical fallacy you would be laughed out of any Philosophy 101 course. It is not a human rights project and it has nothing to do with improving the lot of of those oppressed, but ensuring the profits of the investors who happen to have a track record. Let us look at that track record. The first person listed is Tony Hayward, head of B.P. before and during the Gulf Oil spill. Several other directors worked in the Apartheid era South African mining industry, well known for its great concern for workers and human rights. Onto Glencore directly, we can then discuss the firm’s record in the Democratic Republic of the Congo, with child labor, pollution and bribery. One will forgive me if I think the “improving human rights” argument deserves to be placed within the dungheap. As far as regulation, our local officials have acted as either co-opted puppets of the mining companies, seeking regulatory easing or subsidies at every turn. The examples are countless, from the lightening of fugitive dust regulations to allowing wetland replacement outside of the watershed. There is not a single one of them who has ever proposed any large scale reclamation or remediation project. They, and the other supporters, are either corrupt or co-opted. The supporters primary goal is personal profit by stock price increase once operational. Once operational, the community is completely co-opted as it is dependent on that single industry, more or less slave bound to the companies whims, whether subsidies, regulatory “easing” or just plain old company man subservience. It is nothing more than a for profit mine and the company will externalize all other costs, social or environmental, to extract as much wealth as it can, as that is is how things work in the real world. The local political officials are nothing more than borderline criminals cooperating with the investors, and many of them also look to gain whether financially or politically from it. If anyone can show one example of a closed, reclaimed mine with pensions fully paid by the company here, I would like to see it, for I have never seen a ghost and I am desperate to see one. Otherwise, I will simply accept the evidence that they don’t exist, much like the benevolent mining corporation.
Miskwaa, you are the only commenter here except Gerald S that sees mining corporations and local legislators in mining country for what they are. Thanks for your voice in this discussion!
miskwaa – Have you been drinking, again?
miskwaa, read your post twice….. Still figuring out what you said… I will always take my chances with free market. I know their motivation, Big Govt has many agendas money, political paybacks, votes to name a few, none help you unless you’re one of the elite…. Taking another swing at your post now.