REGIONAL—The Department of Natural Resources has canceled one of 27 mineral leases it had previously issued to Franconia Minerals or other parties now part of the Twin Metals joint venture to build a copper-nickel mine near Ely.

The lease in question, identified as MM-9455-N, was executed in 1990 with Lehmann Exploration Management, a precursor to Franconia Minerals. The company was founded by the late geologist and prospector Ernie Lehmann, who spent decades exploring mineral deposits near and underneath Birch Lake. The company founder, the late Ernie Lehmann, explored for copper-nickel deposits near Birch Lake for more than 40 years. Franconia is now part of the Twin Metals joint venture with Chilean mining giant Antofagasta, and it holds most of the state mineral leases associated with that project.

The canceled lease encompasses 242 acres. It’s a small but potentially critical piece of real estate, one that encompasses a portion of the so-called Birch Lake deposit, a smaller, deeper, but somewhat richer deposit of ore than the Maturi deposit that had been the focus of Twin Metals mine planning for some time.

Given uncertainty over federal leases affecting the Maturi deposit, which have been repeatedly canceled then reinstated with the shift of presidential administrations, Franconia had, late last year, proposed a new drilling campaign on state leases just east of Bob Bay on the south shore of Birch Lake, but that drilling campaign is now facing uncertainty with the announced lease cancellation, which takes effect on Nov. 10.

The original lease was for a 50-year term, however, the lease allows the state to cancel the agreement at two stages, either during the 21^st or 36^th year, and only if the lessee has failed to begin ore production by that time. The lease is currently in its 36^th year, with no ore production underway.

The cancellation of the lease is consistent with the executive order issued by Gov. Tim Walz last month that directed the DNR to suspend any new non-ferrous mineral lease applications in the Rainy River headwaters and to review existing mineral leases for possible cancellation. According to the DNR, the decision on MM-9455-N “follows nearly a year of review and is based on a determination that the company has not met the performance and production requirements of the lease.”

The DNR says it is continuing to review 27 additional leases with Twin Metals or its partners, all of which have differing production requirement timelines.

Twin Metals, for its part, expressed disappointment in the DNR’s decision, although it isn’t clear it is one that would impact the company’s prospects for pursuing its mine plan for the Maturi deposit. That deposit, however, could be affected by other state lease cancellations, should those be forthcoming. The area identified as the Maturi deposit does include more than 200 acres of state leased land.

The company, in a statement, expressed disappointment in the DNR’s decision.

“We have invested considerable resources into exploring the minerals associated with this site,” stated Twin Metals spokesperson Kathy Graul. “The canceled lease is also located on school trust lands, which are established in the Minnesota Constitution to fund every K-12 school district in the state and are intended to maximize revenue generation over the long term. If developed in the future, this lease would contribute significant revenue for the fund. Twin Metals has invested more than 16 years in extensive exploration, geological, environmental, hydrological and engineering work, doing so in strict accordance with all applicable state and federal regulations. We remain committed to advancing a sustainable underground mining project that will bring vital economic opportunities to northeastern Minnesota.”

Twin Metals’ proposal has faced widespread opposition given its proximity to the 1.1-million-acre Boundary Waters Canoe Area Wilderness, which lies downstream of the proposed mine. The U.S. Forest Service has determined that the proposed mine presents unacceptable risks to the wilderness water quality and that mitigating mine pollution would be extremely challenging. Those concerns led the Forest Service to exercise its legal authority to veto the proposal, a decision that the agency has yet to reverse.

The mine has also attracted support from local boosters who believe the jobs the mine would create outweigh the potential environmental risks.