Article From Today's BusinessNorth
Nonferrous mining reaches critical regulatory juncture
2/2/2011
by Ron Brochu
After more than five years of environmental study, in 2011 regulators may finally issue approvals that allow the $600 million PolyMet project to advance. Those first nods are critical because they’ll set the stage for non-ferrous mining projects that could power the region’s economy for a century.
It would be an understatement to suggest that supporters are enthusiastic.
“It’s the single largest economic development opportunity in the state,” said Frank Ongaro, executive director of MiningMinnesota, a trade association representing the state’s non-ferrous mining interests. “This will generate tens of millions in net proceeds taxes to cities, school districts and townships, and the same for the state in occupation taxes. That’s just the companies’ direct contribution. It doesn’t include employee spinoff such as supplier-vendor employee taxes.”
In addition to PolyMet, three other firms are completing the exploration stage and may launch feasibility studies in 2011. Later, their environmental impact statements and permit requests will be reviewed by multiple state and federal agencies – a process that can take several years and encounter speed bumps along the way.
U.S. Environmental Protection Agency officials in February rated PolyMet’s 1,800-page draft environmental impact statement (DEIS) unsatisfactory, saying the project would not meet short- or long-term water quality standards.
“…additional information, alternatives and mitigation measures should be evaluated and made available for public comment in a revised or supplemental DEIS,” wrote EPA Acting Regional Administrator Bharat Mathur. The data will be included in a supplemental EIS. Overall, project-related environmental costs are expected to reach $100 million.
It’s the first time the EPA had weighed in on the project. Before 2010, the Minnesota Department of Natural Resources acted as the lead state agency and U.S. Army Corps of Engineers as the lead federal agency. Now that EPA officials have joined the discussion, Ongaro said, “I believe the supplemental EIS for PolyMet will be comprehensively positive. It’s a good template for all projects going forward.”
The non-ferrous discussion is enveloped by a dichotomy of values. On one hand, environmentalists raise fears about the release of sulfides during the mining process. On the other, base and precious metals are needed for numerous projects that reduce our dependence on non-renewable energy sources while also reducing pollution.
“You can’t have hybrid cars, wind turbines and solar without a significant amount of these base and precious metals,” Ongaro said. “You literally need tons of copper for the largest wind turbines – up to four tons. In a regular car, you need 50 pounds of copper, but in a hybrid car, you need 75 pounds. Every car on the road has a catalytic converter that contains platinum. These metals are being used for environmental purposes right now and will continue to be.”
The United States currently depends on imports for a majority of nonferrous metals.
“Our production is half of our consumption for copper. We produce zero nickel. There’s not a single operating nickel mine in this country. Even with scrap metal, we’re still 75 percent dependent on imports,” Ongaro said.
“For platinum group metals, we have production capacity for a handful of kilograms a year – probably less than 10. We consume 90 to 100 kilograms per year,” he said.
The high demand has triggered interest among several firms. Unlike PolyMet, which will develop an open pit, some would mine underground.
• Kennecott Exploration, a division of Rio Tinto, is sampling in Carlton and Aitkin counties and finding some higher-grade deposits.
• Cardaro Resources has an option in the Longnose titanium/iron deposits south of Aurora.
• Duluth Metals and Antofagasta have created a joint venture company, Twin Metals Minnesota, to pursue the Nokomis Project, south of Ely.
• Franconia Minerals Corp. proposes underground copper, nickel, palladium mines near the Birch Lake Reservoir, also south of Ely.
• Encampment Minerals is exploring for copper, nickel and palladium in the Duluth Complex.
• In North Central Minnesota, Vermillion Gold is exploring for gold.
“Demand will keep going up, and these companies will go forward because they’ll have an opportunity to be profitable,” Ongaro said. “I don’t see any scenario that prevents non-ferrous mining from becoming a reality in Northeast Minnesota. The projects, the investment, the profitability, the environmental safeguards, even the lawsuits will be overcome.”
