Isaac Orr on Justice and Drew
Policy fellow Isaac Orr appeared on Justice and Drew this week to discuss Governor Walz’s decision to impose California car mandates in Minnesota. His interview starts at about the 40-minute…
How mining will bring 8,500 jobs and $3.7 billion to Minnesota’s economy
What’s in Your Phone?
To get a sense of how our modern lifestyles require ever-increasing quantities of raw materials, look at your smartphone. Like most people, you likely would struggle to identify just a few—if any—of the metals used to manufacture your phone, let alone the entire suite of raw materials that enable you to check your Instagram feed when, and where, you want.
Copper, nickel, cobalt, gold, silver, and silicon are all needed to make a smartphone. All of these materials can be mined in Minnesota. And if they are not mined here, they will be mined somewhere else. Congo, for example, is currently the source of most of the world’s cobalt. Congo’s cobalt is produced in substantial part by child labor, with few, if any, environmental protections.
Our lack of understanding of the raw materials that make up the goods we rely upon—and where they come from—extends beyond smartphones. Ask people what the pipes in their houses are made of, which elements were used to manufacture their refrigerators, and what materials were used to build their cars and the roads they drove to work on, and you are likely to draw similar blank stares.
The Minerals Education Coalition reports that every American born in 2017 will require an average of 3.188 million pounds of minerals, metals, and fuels in his or her lifetime. This equals approximately 40,500 pounds of new raw materials every year, per person.
Minnesota is well-positioned to help meet that demand.
The state’s mineral deposits are massive: Minnesota mined $3.18 billion in metals and minerals in 2017—primarily iron ore, sand and gravel, and dimension stone—making the state the sixth-largest producer of non-fuel minerals in the United States. But the state’s mineral resources are largely untouched: the Duluth Complex, a massive rock formation in northeast Minnesota stretching from Duluth to Pigeon Point, holds some of the world’s largest undeveloped deposits of copper, nickel, platinum group elements (PGE), and ilmenite (the most important ore for titanium). It also contains elements such as cobalt, gold, and silver.
If Minnesota had been able to mine these resources in 2017, it would have regained its position as America’s third-largest producer of minerals by dollar amount—a position it has not held since 2012. On top of that, these numbers could increase significantly if gold and silver are discovered in mineable quantities in the areas currently being explored in northern Minnesota.
Thousands of Jobs for Decades to Come
Minnesota’s mining industry has a long record of creating high-quality, well- paying jobs on the Iron Range. This is why many Iron Range residents are eager for more mining.
The chart below shows the average annual wage for jobs in Hennepin, Itasca, and St. Louis counties, along with the average of all Minnesota counties. The average annual wage in Hennepin County is approximately $66,600, far larger than the average income for non-mining jobs in northern Minnesota, where wages are $12,000 lower than the state average.
Residents of the Twin Cities metropolitan area often take their relatively high wages for granted, but jobs paying more than $66,000 per year are difficult to come by in northern counties. The average income in St. Louis County, for example, is approximately $42,000—and average mining jobs pay $83,235, nearly twice that amount.
American Experiment used the economic modeling software IMPLAN to estimate how the expansion of mining will impact economic output, jobs, wages, and taxes. These estimates do not include all potential mining, but are limited to the copper, nickel, and precious metal deposits associated with PolyMet’s proposed NorthMet mining project, Twin Metals Minnesota’s proposed TMM mining project, the Tamarack deposit, and the state’s titanium resources.
In total, IMPLAN estimates that developing these resources would increase Minnesota’s gross domestic product by $3.7 billion annually—the economic equivalent of hosting 10 Super Bowls per year. It would create approximately 8,500 direct, indirect and induced jobs with total wages of $635 million. And it would add approximately $198 million in tax revenue for state and local governments.
These projections are based on publicly-available data from mining projects in the preliminary planning stages, but several of Minnesota’s copper-nickel deposits, including the largest one, do not have public resource calculations available. Therefore, these numbers are a floor and not a ceiling.
It is not currently possible to model the economic impacts of gold mining in Minnesota because none of the companies exploring for gold have publicly available resource estimates. However, the New Gold mine in Ontario, Canada will employ approximately 400 people when production from the surface mine begins and 600 people when underground mining commences a few years later.
What About the Environment?
Modern mines, like the proposed copper-nickel mines in Minnesota’s Mesabi Iron Range mining district, are designed, built, operated, and eventually closed using effective and proven environmental safeguards that provide comprehensive protection for all elements of the environment. Minnesota’s environmental regulations establish and enforce stringent environmental protection criteria and monitoring requirements for all Minnesota industries. Mining is no exception.
The environmental protection measures used in contemporary mines, including liners, covers, water treatment facilities, air emission control equipment, dust abatement measures and environmental monitoring systems, have successfully protected the environment at Minnesota manufacturing facilities, water treatment plants, industrial sites, construction projects, and businesses. They are used worldwide.
Minnesota’s laws and regulations require that a proposed operation satisfy all environmental protection requirements. In order to secure permits to build and operate a Minnesota mine, compa- nies must demonstrate that the proposed project will comply with all aspects of Minnesota’s environmental protection requirements throughout the life of the mine and afterwards. They must submit detailed engineering designs and technical studies to show how environmental protection measures will successfully meet Minnesota’s rigorous regulatory requirements to protect surface water and groundwater resources, air quality, wetlands, wildlife, cultural resources, public health and safety, and socioeconomic values.
The U.S. Environmental Protection Agency (EPA) recently concluded that the environmental safeguards in modern mining make it unnecessary for the industry to provide financial assurance to the Superfund (a federal program to clean up polluted sites), in addition to financial assurance that mines are already required to provide to state regulators, the U.S. Bureau of Land Management (BLM), and the U.S. Forest Service. “The degree and duration of risk associated with the modern production, transportation, treatment, storage or disposal of hazardous substances by the hardrock mining industry does not present a level of risk of taxpayer funded response actions that warrant imposition of financial responsibility requirements for this sector.”
The EPA’s finding is important to the debate about copper-nickel-PGE mining in northern Minnesota because it discredits efforts by mining critics to correlate environmental incidents in the bygone era of pre-regulation practices with alleged vulnerabilities in new, technologically sophisticated and highly-regulated mines.
In explaining its decision, EPA pointed out that since 1990—roughly the time when modern environmental protection regulations went into effect—the BLM has approved 659 mining plans and the Forest Service has approved 2,685 plans. Not one of these mines has appeared on the Superfund’s National Priority List.
Success Stories. Two Upper Midwest mining projects illustrate how modern mining combines economic prosperity with environmental safety. The Flambeau Copper-Gold-Silver Mine in Wisconsin and the Eagle Nickel-Copper Mine in Michigan demonstrate how today’s mines are safe for the environment and good for local communities. Both mines use modern protective measures to effectively manage acid mine drainage and protect the environment.
The Flambeau Mine, a 35-acre surface mine located just south of Ladysmith in northern Wisconsin, illustrates how the environment and groundwater quality can be protected at an acid-generating mine. Over four years (1993-1997), the Flambeau Mine produced 181,000 tons of copper, 334 ounces of gold, and 3.3 million ounces of silver. At its peak, the mine provided nearly 100 family- supporting jobs and paid more than $27.7 million in taxes into a state fund that was returned to the community to promote long-term business development.
Today the closed and restored mine site is an interpretive nature center, a recreation area, and a business park. Reclamation took about two years to complete and cost $20 million, and produced a 150-acre site that includes four miles of nature trails and five miles of equestrian paths that wind their way through a beautifully restored open space.
The Eagle Mine, which started operations in 2014, is another excellent example of how modern environmental protection technology, state-of-the-art water treatment facilities, and strong environmental stewardship are successfully controlling acid mine drainage and protecting the environment at the nation’s only primary nickel mine. The Eagle Mine also has an exemplary community engagement program to keep area residents well informed about the mine, and a unique Community Environmental Monitoring Program that pays for independent site environmental monitoring of its operations.
Copper, nickel, and cobalt are essential to many aspects of contemporary life. Minnesota has vast deposits of these metals, as well as others. Developing Minnesota’s resources will not only bring tremendous wealth to the state, it will assure that mining is done in a safe and environmentally responsible manner.
Editor’s Note: This article was adapted from a much more comprehensive policy paper by Isaac M. Orr, Debra W. Struhsacker, and John Phelan and released in July by Center of the American Experiment. The paper can be found at AmericanExperiment.org.