As we report this week, political backers of the proposed Twin Metals copper-nickel mine near Ely have made progress in seeking to undermine federal funding for an ongoing study of the potential effects of sulfide mining within the Boundary Waters watershed.
It’s all part of a push by Eighth District Congressman Rick Nolan and many local politicians to re-establish mineral leases for Twin Metals which the Obama administration cancelled back in December and to head off any examination of some of the economic downsides of copper-nickel mining on the edge of the Boundary Waters.
Sadly, such battles are too often simply about the fight, and the politics of the fight, rather than part of an overall strategic vision that has the potential to move the region’s economy forward.
In this case, Twin Metals mine supporters appear focused on scoring a political victory, without any consideration of the risks such a victory could entail.
The obvious question to supporters of restoring mineral leases for Twin Metals is, what happens if you get what you want?
Restoring mineral leases to Twin Metals will not make an uneconomical mine financially viable. The 43-101 pre-feasibility study published by the company in 2014, showed a very marginal rate of return on an incredibly expensive and risky project— even while assuming metal prices at historic highs. At current metal prices, you may as well light pallets of $100 bills on fire.
Supporters of the mine, like Congressman Nolan, say we have to let Twin Metals do their drilling so we know what kind of resources are there. “We can’t be afraid of exploration,” he likes to say.
That, of course, is just rhetoric. Rep. Nolan and other Twin Metals supporters know full well that Twin Metals spent years drilling that ore body and had already downsized its exploratory workforce because that phase of the project is largely completed. We already know what’s there. The question is whether the risks, both environmental and economic, associated with mining that deposit are justified— and that’s a question that the ongoing study that Nolan is hoping to quash is expected to answer. Apparently, Nolan only likes certain kinds of exploration, and certainly not the kind that asks the probing questions— such as, would copper-nickel mining help or hurt the Ely area economy?
It’s the key question, and it’s far from settled. As we reported a few weeks ago, the incomes generated by residents of Ely’s outlying townships are a key driver of the local economy, and as many as a quarter of those residents (many of whom are high income) could leave if sulfide mining were to occur on the edge of the Boundary Waters. That’s based on an extensive 2014 survey by the University of Minnesota-Morris that looked at the attitudes of residents in the four townships surrounding Ely. If even half that number left, the loss of local income in the Ely area could easily match the additional income generated by mining wages from the Twin Metals project. Add in the potential of lost tourism dollars if even a quarter of Boundary Waters visitors opt to visit elsewhere, and Ely loses ground economically as a result of mining. That’s just math, and it’s the kind of math that the ongoing Forest Service study is expected to examine.
Which is exactly why the politicians are so eager to kill it. Here’s the reality. Despite the claims of the Eeyore crowd in Ely, the community maintains the most vibrant and diversified small town economy of any community in our region. It has an economic model in place that is working. Is it perfect? Of course not. Small towns face enormous challenges everywhere to sustain economic viability in the face of a long list of trends that would just as soon wipe them off the map. Ely has been successful because it is home to iconic amenities that continue to attract new residents to the area, and those residents bring incomes and economic benefits along with them. And the moment that supporters of Twin Metals are forced to acknowledge this fact, and admit that mining has the potential to kill or maim the golden goose represented by Ely’s outlying townships and the amenity-based economy that has developed in the community, the economic argument in favor of mining goes up in smoke.
So they will fight tooth and nail to prevent an independent analysis of such critical questions. And, sadly, they are happy to continue to wage, for decades, a political battle that bitterly divides the community, harming Ely’s economy every step of the way. And in the end, after all the fighting, the mine is unlikely to ever open because the project costs are simply too great. But at least the politicians will be able to score their political points. In the end, that’s all this is really about.