Serving Northern St. Louis County, Minnesota

Twin Metals suffers a one-two punch

Dayton nixes state land access; BLM may not renew federal leases

Marshall Helmberger
Posted 3/9/16

ELY— The proposal to build a massive new copper-nickel mine southeast of Ely suffered two body blows this week following announcements in both St. Paul and Washington.

On Monday, Gov. Mark …

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Twin Metals suffers a one-two punch

Dayton nixes state land access; BLM may not renew federal leases

Posted

ELY— The proposal to build a massive new copper-nickel mine southeast of Ely suffered two body blows this week following announcements in both St. Paul and Washington.

On Monday, Gov. Mark Dayton announced that he won’t approve permits that would allow Twin Metals, the company proposing the mine, to access state lands near the site.

Citing concerns about the project’s proximity to the Boundary Waters Canoe Area Wilderness, Dayton said he has directed the Department of Natural Resources not to authorize access to the state lands by representatives of Twin Metals, or to enter into any additional lease agreements for mining-related activities.

Meanwhile, on Tuesday, the Office of the Solicitor for the U.S. Department of the Interior, announced that the Bureau of Land Management has the option of whether or not to renew two longstanding mineral leases that are critical to the viability of the Twin Metals project. And the Timberjay has learned that Gov. Mark Dayton recently urged the Director of the BLM not to renew the permits, which expired at the end of 2013.

The BLM originally issued the permits in 1966 to the International Nickel Co., or INCO, and has renewed them twice before. Under the original lease, the leaseholder has the right to seek three ten-year renewals, but the lease also required that actual mining commence within a set time limit, long since past, or the leases could be cancelled.

Twin Metals, which holds the expired leases, has applied for a third renewal of the permits and has argued that the renewal is “non-discretionary” but the Solicitor’s ruling this week takes the opposite position, finding that while Twin Metals does have the right to be preferred over other parties in any lease renewal, the company has no automatic right to a new lease. The ruling doesn’t preclude renewal of the leases, but it does mean that the leases could only be renewed following completion of a full environmental analysis, a process that could take years and will only add to uncertainty over the future of the project.

Pressure builds

Dayton has been under pressure from Iron Range politicians for months to grant Twin Metals access to state lands, which would allow Twin Metals to gather additional information as part of their pre-project review. The company has proposed to access lands primarily on the west side of Birch Lake and south of Babbitt, as it begins pre-planning for a mine proposal currently slated for release in 2018. The company was seeking access to the state lands for hydrogeological and geotechnical study and baseline data gathering. An earlier proposal by the company had suggested Twin Metals was considering construction of a pipeline, some of which would travel underneath Birch Lake, to pump a wasterock slurry to a planned tailings basin south of Babbitt. The Twin Metals venture is wholly owned by Antofagasta, a Chilean mining conglomerate now based in London.

Dayton met with Twin Metals COO Ian Duckworth back on Feb. 17 to discuss the access permits. But in a March 6 letter to Duckworth, Dayton reiterated his “grave concerns” over the use of state lands for mining activities close to the Minnesota’s iconic wilderness area. “I am not questioning the qualifications of either Twin Metals or its parent company Antofagasta. Rather my concern is for the inherent risks associated with any mining operation in close proximity to the BWCAW and my concern about the State of Minnesota’s actively promoting advancement of such operations by permitting access to state lands,” Dayton wrote.

Reaction swift

Environmentalists were elated by the governor’s announcement, while project supporters, including northeastern Minnesota politicians, expressed deep disappointment. Ely Mayor Chuck Novak said he was surprised by the decision, adding that it appears to have been based on emotion. The Ely City Council, which has been strongly supportive of Twin Metals’ proposals, approved a resolution asking Dayton to reconsider his position. Twin Metals maintains a field office in Ely that has employed varying numbers of workers in recent years.

Eighth District Congressman Rick Nolan and members of the Iron Range legislative delegation weighed in as well.

“I strongly disagree with the Governor’s refusal to allow the DNR to authorize or enter into any new state access or lease agreements for Twin Metals mining exploration,” said Nolan in a statement issued on Tuesday. “To be clear, these agreements are not to be confused with the final approval or disapproval of the Twin Metals project itself. That decision will rest on a rigorous and thorough process based on science, facts and technology,” Nolan added.

State Rep. Rob Ecklund expressed a similar view, although he said he doesn’t believe that the governor’s decision kills the project outright. While hopes are high on the Iron Range that PolyMet Mining’s proposed NorthMet mine could move forward within the next year or two, the Twin Metals project is still seen by most as a project on the distant horizon. Ecklund said the current state of the metals market, which has seen prices collapse in recent months, hasn’t helped prospects for the project. “This certainly isn’t going to help speed things up,” he said, referring to Dayton’s announcement.

Meanwhile, environmentalists reacted positively. “I’d like to thank the Governor for his strong leadership on this issue,” said Rebecca Rom, of Ely, who serves as national chair of the Campaign to Save the Boundary Waters. “The Boundary Waters Canoe Area Wilderness is a national treasure. This is a clear signal that the lands near the Boundary Waters Wilderness should be off limits to sulfide-ore mining,” Rom added.

In a conference call with reporters on Tuesday, the campaign cited new polling data that suggests the public’s view of the issue is more in line with the governor’s. Lisa Grove, of Anzalone Liszt Grove Research, said a new poll, completed in February, found 67 percent of Minnesotans opposed to sulfide-based mines on the edge of the Boundary Waters, compared to just 16 percent in support. Even within the Eighth Congressional District, said Grove, opposition to mining near the wilderness was 61 percent. Opposition was strongest among DFLers, although large majorities across the political spectrum opposed mining near the BWCAW.

Statewide, 65 percent of respondents said they supported permanently prohibiting sulfide-based mining near the Boundary Waters.

“I think the tide is turning,” said Rom in response to the week’s developments.

Twin Metals officials said they were still analyzing the impact of the week’s developments and had no immediate comment.

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