Have a mobile phone? Then consider why mining in Minnesota is preferable

This op-ed appeared September 28, 2018 in the Pioneer Press

There is a good chance that you are reading this on a mobile phone. If so, the lithium-ion battery powering it was produced using cobalt. That cobalt may well have come from the Democratic Republic of the Congo (DRC) which accounts for 55 percent of global cobalt production. It might even have been produced by one of the 40,000 young boys and girls the United Nations International Children’s Emergency Fund (UNICEF) estimates are working in cobalt mines.

Fortunately, there is an alternative, and it is right here in Minnesota.

Northern Minnesota is home to one of the largest undeveloped deposits of copper, nickel, and platinum group elements in the world. Minnesota also has the largest deposits of ilmenite, the most important ore for titanium, in North America. Minnesota can do the environment and its economy a favor by mining those deposits.

In our new report, “Unearthing Prosperity,” we calculate that the three copper-nickel-PGE projects – PolyMet, Tamarack, and Twin Metals – would directly employ 1,243 workers and support a further 3,436 jobs across the state. They would generate $2.5 billion in additional output and $161 million annually in state and local tax revenue. We also estimate that titanium mining and support activities could generate an estimated 659 jobs in these sectors directly and support another 3,130 jobs throughout the state. That would generate an estimated $1.1 billion of output for the state and produce an extra $37 million annually in state and local tax revenue.

The economic benefits of mining won’t be confined to just one part of the state. Economically, Minnesota faces the same challenge as much of the developed world; an aging population and declining labor-force participation rate. One way to maintain increases in per capita GDP in the face of this is for the share of the population working to become more productive.

This is where mining can help. According to data from the BLS and Bureau of Economic Analysis (BEA), in 2017 each Minnesotan worker in Mining and Logging was responsible for $404,250 of GDP. In Health Care the figure is $72,165 and in Educational Services it was $46,639. Yet, since 2000, employment has fallen by 18 percent in Mining and Logging and risen by 66 and 63 percent in Health Care and Educational Services. Given the demographic headwinds, this is the exact opposite of what we need, and mining can help reverse that. All Minnesotans would benefit from environmentally sustainable mining.

It is often suggested that leisure and hospitality offer an alternative economic path for northern Minnesota. But, for St. Louis County, the BLS data show that average annual pay in “Mining, except oil and gas” was $88,826 in 2017, compared with $16,542 for “Leisure and hospitality.” This is a difference of $72,284.

If you’ve scrolled this far, ask yourself the question: Knowing the likely origin of the cobalt in your phone, will you drop it in the bin? Or will you support environmentally sustainable mining in northern Minnesota? That is the choice facing this state.

John Phelan is an economist at the Center of the American Experiment, a non-profit public policy organization based in Golden Valley that advocates for free enterprise, limited government, personal responsibility and government accountability.