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Foreign investors good for the Range

Mesabi Daily News
March 22,2008

There was a time not that long ago when foreign investment on the Iron Range would have been frowned on by many local residents. Some probably still do. But that is a tremendously short-sighted outlook on the economic realities of this century.

As we detailed in a story last Monday on some of our new business neighbors on the Iron Range, the demand for our resources has sparked a lot of global interest from India to China to Canada to Japan.

As an area we have often been too isolated and dependent on a handful of corporations. Not only is it important to diversify with business outside of mining, it is also important to diversify and have more players within the mining economy.

That is now happening in a healthy way. The Range's mining economy is situated well and cashing in on the global demand for ore. And, soon, we will also be an important player in the world's growing thirst for non-ferrous minerals such as copper, nickel, cobalt, platinum and palladium. Those are all metals that are important to each and every person in their daily lives, including preservationists.

This is an exciting time for the Iron Range. The potential for future economic mining growth is now. Foreign investment is a critical part of that growth. And that's a good thing.

Let’s get the PolyMet draft EIS released

Mesabi Daily News
March 8, 2008

In three weeks a draft Environmental Impact Statement on the PolyMet copper/nickel/precious metals project near Hoyt Lakes should have been ready for Minnesotans to thoroughly page through and study.

But that will not be the case. The end of March target date for the EIS is now perhaps three months later "by the end of June," according to the Department of Natural Resources.

It's certainly understandable that the DNR is being prudent in its deliberations on the PolyMet draft EIS. After all, we are talking here about the first of several non-ferrous mining projects on the east Iron Range that are in various stages of development. PolyMet will set the standard for the other projects, including in how the EIS process proceeds to eventual final permitting, construction and then production. But PolyMet has also been circumspect as it has gone about developing the mining venture, including a thorough definitive feasibility study.

And PolyMet has also already made a considerable investment into the project, including more than $13 million already spent so far on its own environmental documentation and also the state's EIS project "because it's the company, not state taxpayers who put up the financial resources for all such studies." Meanwhile, as the EIS process is lengthened the cost of the project continues to rise, and the PolyMet venture is total private investment.

The DNR said it is taking the additional time on the draft EIS to further validate and verify sampling, monitoring and modeling data. We would hope that the agency has the resources available to move ahead with that validation in as quick a manner as possible.

After all, this is a draft document not the final version. It will receive plentiful public comment that can be used to modify the EIS as needed.

This and other non-ferrous projects are vital to the overall economic future of Minnesota and more specifically to the Iron Range. The time is now for the area's resource-based economy to take a vital step forward with a new era of non-ferrous mining.

So let's get the draft EIS out the public as soon as possible. The sooner the draft EIS leads to the final EIS the sooner the 1 million man hours of construction labor can proceed and the less time it will take for the 400 permanent jobs to be in place.

A renaissance on the Iron Range

Star Tribune
March 2, 2008

HOYT LAKES, MINN. – Barry Trach says that as he fights freeway traffic between home in Forest Lake and work in Maple Grove, he often longs for the slower pace of his native Iron Range.

Downsized out of mining in 2001, Trach, 47, moved from Gilbert, Minn., with his wife and two of their daughters. While they've adjusted, Trach, a field systems technician for Xcel Energy, says: "I do miss the Iron Range and would absolutely consider going back for the right opportunity."

It may be knocking soon.

After a 25-year downturn in North America's iron ore industry, surging worldwide demand for minerals and new technologies for refining them portend what increasingly promises to be a boom for the Range, even while much of the nation's economy lags.

The world's first commercial iron nugget plant – Mesabi Nugget – has jumped off the drawing board and is under construction north of Hoyt Lakes ! on the former site of LTV Steel Mining Co., which went bankrupt in 2001 and plunged the eastern Iron Range into joblessness and insecurity.

The $235 million facility rising there – a revolutionary leap from the region's 50-year-old taconite-processing technology – is the first of a dozen large industrial projects proposed for the Range in the next five years.

They promise a combined investment of more than $6 billion, will require 7,000 construction workers, permanently employ more than 1,400 and support thousands of spin-off jobs.

"It's incredible," said Sandy Layman, commissioner of Iron Range Resources, the Eveleth-based state agency created decades ago with a mission to boost and diversify the region's boom-and-bust economy. "We haven't seen growth like we're envisioning for at least 30 years."

Environmental permits are in place and groundbreaking is expected th! is year on the Range's first steel mill – the $1.7! billion Minnesota Steel Industries project near Nashwauk. It's planned for the site where Butler Taconite closed in 1985, a victim of foreign competition and an industrywide recession.

Reversing the reversal

The Range went from supporting about 16,000 miners in the late 1970s to about 4,000 today. Populations in cities declined and grew older. Funerals outpaced baptisms. Schools closed and consolidated.

But recently, those once-crippling world market forces have realigned in the Range's favor. Rapid development in China and India pumped up demand for iron ore and nearly every other mineral, bringing those countries – money in hand – to northeastern Minnesota's door.

In October, Essar Global Ltd. of India closed on its purchase of Minnesota Steel Industries and reaffirmed plans to break ground early this year on the former Butler site. Essar estimates it will need 2,000 construction workers to build North Amer! ica's first fully integrated ore-to-steel processing facility, with projected permanent employment of 700 by 2011.

On the same former LTV property where Mesabi Nugget is building, Polymet Mining Corp. spent more than $40 million proving up a lode of minerals and attempting to prove to state regulators and environmentalists that it can safely lead the Iron Range into a more lucrative vein of mining – for copper, nickel, cobalt and smaller amounts of platinum, palladium and gold.

Geologists have known for decades that such metals exist near that part of the Range, locked within an 800-foot-deep formation called the Duluth Complex. But only recently have technology and rising demand made extraction feasible.

Frank Ongaro, executive director of the nonferrous trade group Mining Minnesota, said the state is suddenly in a position to capitalize on global demand for such metals for use in construction, cell phones and an array of other! digital age necessities.

"Right now the Unit! ed State s is 100 percent dependent on imports for nickel, which you need for hybrid-car batteries, wind turbines and medical devices," Ongaro said. "We have what's believed to be the third-largest nickel deposit in the world."

Environmental debate

Environmentalists warn that nonferrous mining will pollute, because the metals are locked within metallic sulfide ore, which, when disturbed, can produce sulfuric acid drainage. The Sierra Club and other groups say sulfide mining has a long history of polluting.

Polymet says there's little risk of that.

First, sulfide concentrations are low here, and 83 percent of the ore tested produced no acid drainage.

Second, unlike polluting operations in which smelters were used for extraction, Polymet will process the ore in an enclosed "autoclave," an industrial pressure cooker that consumes much of the sulfide as fuel and has very low emissions.
Third, waste rock with the potential to produce acid will be reburied and landscaped atop liners designed to catch any runoff and divert it for treatment.

The state Department of Natural Resources is expected to decide later this year whether to permit the plant. LaTisha Gietzen, Polymet's vice president of public, government and environmental affairs, said the company intends not only to meet, but to exceed, state standards and is confident it can mine the Duluth Complex safely.

"This is the true diversification of the Iron Range," said Gietzen, a Hibbing native and daughter of a miner.

Bracing for the boom

The projects in the pipeline have Range leaders asking how they will accommodate the new workers and their families.

Iron Range Resources last year formed the "Range Readiness Initiative" to help the mining companies, local governments and businesses prepare for growth.

"It's important that we don't develop at th! e expens e of the environment or tourism," Layman said. "We fully expect that we can have both."

Aurora, population 1,850, is renovating and expanding its 50-year-old sewage treatment system, and citizens recently approved an $18 million renovation to their schools, said Dave Lislegard, a City Council member.

Lislegard, laid off from LTV in 2001, reinvented himself by getting a college degree and becoming a project superintendent for a large construction company.

He bounced back, and now, he says, the Iron Range appears to be doing the same.

"It's almost like rising from the ashes," he said. "There is a tomorrow, after all."

Larry Oakes • 1-218-727-7344