Northern Minnesota Prepares for New Era in Mining

By Charlie Mahler, Wilderness News Contributor

PolyMet site. Photo courtesy of Mike Possis.
PolyMet site. Photo courtesy of Mike Possis.

Three new mining projects inside and adjacent to the Superior National Forest signal a new era in northern Minnesota mining. In a region known world-wide for its iron ore, three companies believe they have found significant sources of copper and nickel as well as a constellation of valuable metals known collectively as the platinum group.


The three proposed mines – NorthMet, Birch Lake, and Mesaba – are situated near the town of Babbitt, along a northeast-to-southwest running line from Birch Lake, part of the South Kawishiwi River, to the north and the town of Hoyt Lakes to the south.

There, over a billion years ago when the rock that is now just below the surface was over five miles deep in the earth, trapped magma slowly cooled to form a coarse-grained rock called gabbro. Some magma injected itself into the sulfide-bearing shale of the adjacent crust. The metal-rich magma became enriched in sulfur from the shale and a heavy sulfide liquid then “rained out” through the magma collecting quantities of the magma’s metals as it did so. When the liquid crystallized, it formed the sulfide minerals enriched in copper, nickel, cobalt, platinum, and palladium that are attracting interest today.

“A very unique set of circumstances all had to come together to concentrate these elements which are otherwise very, very distributed in concentration in the earth,” Dr. James Miller a geologist at the Minnesota Geological Survey explained. “You need just the right combination of factors to come together to a concentrated level where it makes any economic sense to extract them. And then, you have to also be situated on the earth at the right level that the earth has been eroding itself to bring that material to the surface.”

“It’s true of every ore deposit, it’s just where we happen to have come onto this dance that the earth has been doing for four-and-a-half billion years. These are the opportunities presented to us by what the earth has been doing as far as concentrating material in the earth,” Miller added.

Where twenty-first century humans happen to be positioned economically and technologically is also important to the current interest in the sites. Ernest Lehmann, Chairman of the Board and a Director of Franconia Minerals which owns the Birch Lake site, notes that the development of hydrometallurgical refining processes, as opposed to separating the metals from the ore by smelting or physical means, made the Babbitt-area ores economically viable, as did the rise in metal prices from a low period prior to the 1990s.

“Economically, hydrometallurgy lends itself to smaller sized operations and effectively can produce value added products such as high grade copper cathode that are the usual items of trade in the copper-products manufacturing industry,” he said.

While the buried resources excite geologists and mining companies, the extraction and processing of the material concerns environmentalists. A partnership of environmental advocacy groups spearheaded by the Sierra Club and including the Friends of the Boundary Waters, the National Wildlife Federation, the Minnesota Center for Environmental Advocacy, and the Minnesota Environmental Partnership is keeping a close eye on the progress of the various projects.

“Sulfide mining is different than taconite,” Clyde Hanson, head of the North Star Chapter of the Sierra Club’s Mining Without Harm campaign, said. “I don’t know that the jobs are as good, and the pollution is real and more scary.”

The Mine

Birch Lake site near Bob’s Bay. Photo courtesy of Mike Possis.
Birch Lake site near Bob’s Bay. Photo courtesy of Mike Possis.

PolyMet Mining Corporation’s Northmet Open Pit Mine, which has so far garnered the most local media attention, appears to have the most developed ground-to-market plan for the ore in its claim. The Vancouver, British Columbia-based company recently closed a deal with Cleveland Cliffs Inc. for use of the former LTV Steel plant in Hoyt Lakes, which it plans to refurbish for copper production and the initial processing stages for the other metals.

In a process that would likely be duplicated or piggy-backed upon by the other mines in the area, PolyMet plans to transport its ore by train the eight miles to the LTV site where it would be processed. Copper produced there would be relatively pure, but the other metals would require further refining elsewhere, likely outside of Minnesota and perhaps overseas.

PolyMet, which tentatively plans to begin commercial operation in 2008, expects to extract 24 million tons of ore annually. The company projects employing 400 full-time workers.

“The NorthMet Project is a great opportunity for our company and its investors, as well as the citizens of Minnesota, especially Iron Range residents who possess the skills and work ethic we’re counting on to help make us successful,” PolyMet president William Murray said recently.
The NorthMet mine would be an open pit excavation. The pit would spread across more than 4,000 acres of forests and wetlands of the Superior National Forest. PolyMet would need to mitigate the destruction it would bring to 1,200 acres of wetlands, reportedly the largest single loss of wetlands in Minnesota since regulators have tracked such figures.

The Birch Lake project owned by Franconia Minerals Corporation of Alberta, Canada had plans to bore a “bulk sampling” shaft in early 2006. The 10 – 14 foot diameter shaft would have drilled 2,300 to 2,500 feet deep into the bedrock beneath Birch Lake, near Bob’s Bay, on land owned by the State of Minnesota. Due to high contracting costs attributed to the active mining market, Franconia now plans to drill large-diameter cores across Birch Lake’s “mineralized zone” beginning later this year in an effort to bring 50 tons of ore to the surface. With that sample the company would conduct pilot plant runs, which would help determine the technical and financial feasibility of their processing system, and provide data on emissions and waste products, according to Lehmann.

Ultimately, Franconia hopes to extract around 43 million tons of ore during the lifetime of the mine. Just where Franconia would mill that ore into copper, nickel or platinum group metals like cobalt, palladium, and platinum is still under discussion. The company might build its own processing facility near Birch Lake or arrange to have another company in the area process the ore at its facility.

“The long term, well paid skilled jobs that non-ferrous mining operations will provide, estimated at 400 at NorthMet, 200 to 250 at Birch Lake, and their spin-off effect in jobs of those providing goods and services to the companies and their employees are important to providing stability to northern Minnesota communities,” Lehmann said. “The operations will also pay substantial state and local taxes. In the case of Birch Lake, millions will also be paid in royalties to the state School Trust fund.”

The proposed Mesaba mine, owned by Teck Cominco another Vancouver-based company, lies between the Birch Lake and PolyMet sites. It is expected to have both an open pit and an underground component. Momentum for its project, which could be the largest in the area, appears to have stalled after Teck Cominco was out-maneuvered by PolyMet for control of the former LTV sites and equipment. Media reports suggest the company, a major player in world mining and the only one of the three concerns with active operations, is focusing its attention on a plant that has been built in Brazil where technology it might use in Minnesota can be tested.

Environmental Concerns

Not surprisingly, the three projects have drawn the attention of environmental advocates. Sulfide mining without proper safeguards, these groups insist, carries with it the potential for environmental damage far beyond that typically seen with iron mining. Sulfides leach acid when they come in contact with air and water. Additionally, the prospect of increased industrial activity in northern Minnesota has prompted concerns over air quality, especially over the Boundary Waters.

A Friends of the Boundary Waters “Fact Sheet” on PolyMet’s plans listed six issues of concern regarding the project: Acid drainage in waterways, wetlands destruction, particulates released into the air, wildlife habitat destruction and fragmentation, asbestiform fiber release, and financial responsibility for long-term environmental impacts.

The water quality issues surrounding the projects – which are located adjacent to the headwaters of both the St. Louis River system flowing into Lake Superior and the Rainy River watershed which crosses the Boundary Waters – are commanding the most attention.

“It’s long term, kind of like nuclear waste,” Sierra’s Hanson said of the sulfide rock the activities would expose and need to stabilize. “It’s just waiting there to get wet again. If the top soil goes away, or the cap goes away, it can come back. People think it’s like taconite mining, but it’s not. It’s done in the same area, it kind of looks the same on the ground – the same crushing of big rocks into little rocks into flour – but it’s not.”

“For Franconia at least,” Lehmann counters, “our metallurgical studies to date indicate the sulfur content of tailings produced during concentration of the ore will be in the same order as the natural abundance of sulfur in the earth’s crust and thus can be expected not to impact water quality. Our concentration plant would be built near the mine, if possible on already disturbed ground,” he said.

“We’re all responsible people,” he added. “We want to do these things right. We know we’re required to do them right, we want to anyway. We’re wrestling with the problems to assure that there’s no significant adverse impact. We’re fully cognizant of the need to contain any water or treat any water that might come into contact with sulfide-bearing rocks. It has to be dealt with and we will deal with it. That’s just a given.”

According to Principal Engineer Kim Lapakko of the Minnesota Department of Natural Resources, one of the agencies involved in permitting the mines, the basic science of protecting water quality in sulfide mining is well understood although many of the technologies based on that science are young.

“One must proceed with caution,” Lapakko said. “With mining there is risk. These mines are big; you’re not looking at a couple of truckloads of stuff. They’re there a long time, so we need to be cautious, be safe, and be careful.”

In the last 20 years, he noted, the industry has focused on the environmental impacts of mining, and government agencies, academic institutions, and mining companies and mining consulting firms have made concerted efforts to expand their knowledge of environmental problems and solutions. Lapakko is confident that the environmental permitting processes, which include public comment, can allow for mining that is safe for the environment.

In addition to the water quality issues, the Sierra Club’s Hanson is also concerned about the financial stability of the mining market and the companies involved.

“PolyMet is like nine guys,” Hanson said. “It’s not an established mining company. They don’t have deep pockets and they don’t have an operating history. It also means the caution that they’re more likely to go bankrupt and leave this thing in a mess. A [mining company like] Kennecott has got projects around the world and they want to at least protect their brand name. These guys could run it out and if it didn’t work, declare bankruptcy and walk.”

Hanson is also skeptical of the economic impact and job creation of the PolyMet project as projected by the company. “PolyMet’s a 20-year mine, so it’s not like starting a business that’s going to go forever,” he said. “This is a very discrete little mine; it’s going to be a pop and then it’s going to be gone. And, the copper industry is not as stable as the taconite industry. They tend to be more responsive to market demand, and the response in that industry is to shut the mines down. When prices fall, they lay people off.”

Franconia’s Lehmann disagrees. “There is no good reason to believe that now that the technology has been developed and that world demand for copper and nickel as well as platinum group metals is growing to meet accelerating world demand that the planned operations of further nearby deposits discovered in the future will be short lived,” he said.

Lehmann also noted that financial assurance requirements intended to cover any long-term environmental impacts will be a part of the permitting process.

Finally, the sulfide mines are also part of a broader concern the Sierra Club and others have about further industrialization of northern Minnesota. The new mines, the proposed Masabi Nugget plant, the Excelsior Energy coal gasification project, and expansion of production at existing taconite facilities threaten the clean air of the region, they claim.

“What ties them all together is the air over the Boundary Waters,” Hanson asserted. “Under the Clean Air Act that’s ‘Class One’ air, it’s supposed to be pristine. There hasn’t been a new major industrial facility built around the Boundary Waters in thirty years – those taconite plants are all back from the 50s. The air issue is big.”


The Need for Metals

Ironically, the need for metals like some of those found beneath the ground around Birch Lake and Babbitt is driven in part by the desire for clean air. Over 50% of the platinum and palladium used today is used for catalytic converters for automobile exhaust systems, according to MGS’s Miller. Additionally, scientists speculate that these two metals will be the major components in fuel cell technology.

“They’re commonly called the environmental metals,” Miller said. “They clean the air, in their uses in catalytic converts, and they may be the metal that is used to make fuel cells which have the potential to make combustion engines obsolete.”

Miller noted that there is currently only one presently-mined source of palladium in the United States – in Stillwater, Montana – and that most of the world’s platinum and palladium comes from South Africa and Russia. The US is by far the largest consumer of the metals, according to Miller.

For Miller, the operative word regarding these and all mining projects is “stewardship” – a concept all parties concerned likely agree on, if by their own interpretations of the word.

“To the point that we can use recycling and reuse, we should do that,” Miller urged. “Everything we’re mining is finite. Nature took a billion years to make this stuff and it’s going to take us 30 years to get it completely mined out, and then it’s gone.”

“That’s the beauty of platinum and palladium, they’re extremely reusable,” he added. “That’s why people recycle catalytic converters; they’re the most valuable thing when you turn your car in. But, the demand for these metals is increasing, so just recycling and reusing isn’t going to satisfy the demand the world has for these metals.”

“We’re at a very important crossroads in the state, here,” Miller added. “I love that area of the state; I did my thesis in the Boundary Waters. Being a geologist and knowing how special these mineral deposits are and knowing what they mean to helping live our lives, I’m more than happy to make sure we steward these resources, and decide when we can use them, where we should use them, how much we should use them, how we should get them out of the earth, and how much we can reuse them.”

As Minnesota stands at the doorstep of a new era in mining, expect the Babbitt-area mines,
led by PolyMet, to stay in the news in the coming months and years as the permitting processes continue. Likewise, expect environmental advocates like the Sierra Club’s Hanson to examine those plans closely.

This article appeared in the Fall-Winter 2005 issue of Wilderness News

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