With copper-nickel mining uncertainty, how long will mining

WASHINGTON — While a debate rages about the future of copper-nickel mining in Minnesota, the state’s  iron ore industry and employment from mining has been fairly steady — even in the pandemic years. 

And, despite setbacks, the mining industry has not given up hopes of establishing a new era of mining in the state to extract nickel, copper, cobalt and perhaps other metals, incentivized by the prospects the United States will need more of these materials to shift to clean energy and a greener economy.

There’s been mining in the state since prospectors in 1865 searched for gold in northeastern Minnesota in what was mostly a failed gold rush. But rich iron deposits were discovered, and eventually depleted.

“Around the time of World War II, there was a real concern that they were going to run out of (iron ore),” said Jeffrey Manuel, a history professor at Southern Illinois University and author of “Taconite Dreams,” a book about the history of mining in Minnesota. 

As the supply of high-grade natural ore decreased, the industry began to view taconite as a replacement that would keep the nation’s steel mills humming. A lower-grade iron ore that’s in plentiful supply in the Iron Range and Arrowhead region of Minnesota, taconite tailings — the sand-like waste that’s left over after ore is extracted — can pollute, but does not pose the level of risk to the environment inherent in other types of mining that produce sulfuric acid, Manuel said.

According to data from the Inspector of Mines in St. Louis County, production of taconite has waxed and waned during the years. For instance, it plummeted during the Great Depression of the 1930s and other times of economic downturn, and it peaked during increased need for iron and steel during World War II and the post-war building boom. Production is also affected by the price of steel. 

But taconite production has generally been fairly constant, at nearly 40 million tons  shipped out of Minnesota each year. This trend is especially apparent over the last 20 years with the notable exception of the recessionary aftermath of the 2008 banking crisis.

Employment by the industry has also held fairly steady at about 3,500 to 4,300 mostly unionized miners each year, the Inspector of Mines report said.  Employment and production rose during the pandemic and dipped last year when Northshore, a Cleveland Cliffs mine, shut down last spring during a royalty dispute. Northshore is now calling its workers back to their jobs.

“Over the decades, (employment) is down drastically, largely due to automation and the end of poorly paid immigrants picking at rocks,” Manuel said.

Still, Manuel said, the industry continues to produce high-paying jobs in Minnesota.

And it’s not just the direct — and indirect jobs — created that impact the local and state economy. The steady production of taconite pours tens of millions of dollars into the coffers of state and local governments each year. For instance, a “production tax” — or a tax on every ton produced that was established in 1964 — resulted in more than $109 million being distributed in 2021 to cities and towns in a six-county area of northeastern Minnesota. Those counties also received a share, about $12 million, and local schools received more than $20.5 million. 

The production tax subsidized property taxes and also funds the Iron Range Resources and Rehabilitation Board, a state economic development agency located in Eveleth. Even the Hockey Hall of Fame Museum in Eveleth gets a cut.

The state also receives revenues from taconite production through an “occupational tax” that brought in more than $53 million in 2021 and tens of millions of dollars in additional revenue from royalties and other state taxes.

“To me, taconite production has always been linked to the steel mills, and there’s still many, many years of resources left in the Iron Range,” said Ted Anderson, assistant director of mining operations at the Minnesota Department of Natural Resources.

John Arbogast, a United Steelworkers staff representative, said mining “is all we have in northeastern Minnesota,” even as opponents to mining are promoting tourism and a more diversified economy.

Arbogast’s union represents most of the 4,000 or so miners in the state. He said for each mining job, another 1.8 jobs are created outside the mining industry. Various studies of mining spinoff jobs have shown figures less and more than 1.8.

Jason George’s International Union of Operating Engineers, Local 49 represents those who work at some of those secondary jobs created by the industry. About 4,000 of his union’s workers are employed in the Iron Range, operating and repairing heavy equipment used in the mines and working in construction and other related fields. 

Like Arbogast, George is a promoter of opening up northeastern Minnesota to the mining of copper, nickel, cobalt and other minerals and says it can be done safely. “I don’t think there’s any way rational people can agree that we keep the minerals in the ground,” George said.

Besides the disputes over the ecological impact of mining, there are differences between the industry, its labor allies and environmental groups about the economic impact of mining in the state, with several competing studies that bolster the claims of each camp.

Environmental groups say the mining boom in the Iron Range and the Arrowhead region has ended and amenity based development, including recreation/tourism, construction, personal and professional services and retail established in pristine areas like the Boundary Waters Canoe Area Wilderness would provide better jobs and a higher quality of life to residents.

A study commissioned by Northeastern Minnesotans for Wilderness in 2017 estimated that mining in the Superior National Forest could lose the region between about 5,000 to more than 22,700 jobs and $509 million if mining “suppresses or reverses growth in the amenity-based economy that has been the backbone of the region’s recovery since the early 1980s.”

Meanwhile, a 2020 report by the University of Minnesota’s Labovitz School of Business and Economics on the Arrowhead Region, which includes Douglas County, Wisconsin, determined that the mining industry grew by 37% between 2009 and 2018, adding 1,138 jobs. “This growth rate was significantly higher than any of the other top 20 industries in the Arrowhead Region,” the report said. 

The report said a survey of mining-related businesses found that businesses that depend upon and support the mining industry tend to have higher-than-average wages.

The report also said mining in the region grew to a $2.1 billion industry in 2018, while tourism grew at a slower but steadier pace and brought in about $622 million.

Becky Rom, national chair of Campaign to Save the Boundary Waters, an effort to stop underground mining in the Superior National Forest, said the economic impact of mining is diminished by the money the state pays to construct infrastructure and other amenities for the industry. “The state subsidizes mining,” she said.

Still, Rom concedes the taconite mining jobs “are good jobs” and her organization is “not anti-taconite mining.”

“But I think its contribution to the state of Minnesota is overstated,” she said.

A new era of mining

Those who are pressing for a new era of mining in Minnesota had a setback in January, when the Biden administration imposed a 20-year mining moratorium on 225,000 acres of the Superior National Forest that bars Twin Metals from constructing a proposed copper, cobalt and nickel mine in the area. The Interior Department agreed with the U.S. Forest Service’s assessment that the environmental risks to the Boundary Waters Canoe Area Wilderness and the watershed that served it were too great.

But there are two other efforts to extract minerals in the state, although they, like Twin Metals’ proposal,  have also been met with local resistance.

One plan to establish a mine by a joint venture between PolyMet and Teck called NewRange Copper Nickel LLC has been put on hold for years by legal challenges to several permits that are key to construction and operation of the mine, which would be located in the St. Louis River watershed in the eastern edge of the Mesabi Iron Range, about 6 miles south of Babitt.  

NewRange spokesman Bruce Richardson said the company has already spent $400 million trying to develop the facility on a brownfield site that was a former taconite operation. Half that money has been spent on lawsuits and permitting requirements, he said.

He said New Range would spend another $1 billion to build the facility, if it ever gets a green light, and create more than 300 full-time mining jobs and 600 secondary jobs. He also said he hoped the mine’s permits could be “cleared” before the end of the year so construction could start next year. 

“No one is building anything until all of the permits that have been reversed have been reissued,” said Paula Maccabee, advocacy director and counsel for WaterLegacy, one of the groups that challenged the permits in court. WaterLegacy and the other groups have argued mercury and sulfate discharges could harm humans, fish and other aquatic life and wild rice. Maccabee also argues the quality of the deposit isn’t worth the risk.   

Another mine planned in the state is Talon Metals’ facility that would be located to the south of the Iron Range and the Arrowhead region, near the small Aitkin County town of Tamarack. 

The Tamarack mine would mainly produce nickel, but also copper, cobalt and perhaps other minerals. Talon is touting an environmentally conscious culture at the company that includes using an electric fleet of mining vehicles and transporting its ore to a processing center in North Dakota to avoid pollution risks to the waters of Minnesota. 

Those opposed to the expansion of mining deride efforts by the industry to say they are at the forefront of the fight against climate change as “greenwashing.”

Nonetheless, through the massive infrastructure bill, the Biden administration has given Talon a $114 million grant for its efforts to help in the development of batteries for electric vehicles. Talon has signed a deal with Tesla to supply minerals for EV batteries.

Even so, plans for the Tamarack mine have provoked pushback from the Mille Lacs Band of Ojibwe, which says any potential water pollution could disturb wild rice gathering and harm the natural environment and cultural practices the tribe relies on. 

“We are asking Minnesota’s leaders and regulators to prioritize fresh water over nickel before it is too late,” said Melanie Benjamin, the tribe’s chief executive, at a news conference earlier this month. “The idea that the green economy rests solely on nickel mining is a false premise.” 

Nevertheless, as concerns over climate change spike among Americans and the numbers of politicians who reject climate change  are on the wane, arguments are becoming stronger for mining to help reduce the use of oil, natural gas and coal by providing metals to create EV batteries, solar panels – which require copper – and other green technologies. And mining advocates argue  that all the metals needed to move the United States to a green economy can’t be imported from Canada, China, Chile, the Congo and other places that produce them overseas.

That argument may eventually overshadow today’s competing arguments that have stoked the debate over the economic benefits of mining in Minnesota.

“You’ll never hear me talk about jobs,” said Julie Lucas, executive director of MiningMinnesota. “It’s much bigger than that.” 

MinnPost reporter Walker Orenstein contributed to this story.