Editorial: Ely Needs to Find a Way to Get Out of Current Economic Tailspin

Ely Echo (Weekly)

Aug. 31, 2013

Ely's current economic state can be summed up in one undeniable statistic. The people who live here earn a wage that is one of the lowest around. Not only do we need jobs, we need jobs that pay at or above livable wage.

According to the feds, Ely's median household income is at $31,905. That's 40 percent below the state household median of $55,207, and well behind median incomes of neighboring communities including Babbitt ($37,500), Aurora ($45,285) and Hoyt Lakes ($45,388).

What this means is the people who live here are trying to get by on a wage that is nearly half of the state average. This is not making our community a viable place to live.

The newly-formed nonprofit Up North Jobs made a presenation to the Ely council Tuesday night that started with a reasonable question.

"If the PolyMet and Twin Metals mines are not developed, can tourism alone sustain Ely's economy?"

If household income is any kind of indicator, the answer for us is no. We believe tourism is one of the legs of the stool, but a one-legged stool cannot survive with jobs that exist from May to September.

We know there are businesses that shut their doors in September and stay closed until May. During that time they don't pay any wages, since nobody is working there. Such is often the way with a tourism-based business.

For students and those looking for a summer supplemental income, this situation works just fine. But to base an economy on wages that are often closer to $8 than to $15 is not workable.

Our concern has and will continue to be: How will the key components of our community survive if we don't bring in high-paying jobs?

Ely-Bloomenson Community Hospital can't close its doors and lay off its staff at end of the summer and then open up for business on May 1.

Hospital administrator John Fossum said the seasonal economy is not healthy for health care, especially in a small community. With more people here in the summer, there's more business for the hospital.

The school district would be in much better shape if it could enroll students from the three busiest months of summer. Instead the district has seen massive enrollment drops, nearly half from the numbers of students it had 20 years ago.

What the hospital and the school district need are a better base of families living here. For those who aren't aware, there are a number of businesses here hanging on by the skin of their teeth. Without a bigger base of customers to visit the stores year-round, they face a shaky future.

We can argue about whether these proposed mining projects will be able to meet the stringent standards in place to safeguard our environment. Until we see the environmental impact statements and in-depth documentation on how these new mining ventures proporse to extract minerals, there's plenty of guessing going on.

Bu there shouldn't be any doubt in anyone's mind that tourism cannot carry Ely's economy alone.

As we end the eighth month of the year, an employee at an area taconite mine such as Northshore has likely already been paid over $65,000. And they still have four months of paychecks to go.

As we end the eighth month of the year, an employee at many of our tourism businesses may have made one-tenth of that. And they are now facing being out of work for the next eight months.

We can have a vibrant community with strong mining and tourism components. Ely was that way in the past. We would like to see logging return to a level where it is profitable again as well. We also believe there is room for companies to base employees here to provide computer-related services.

We believe there is a future for Ely but only if there is growth and expansion of the local economy.  


Mining Opponents: You Think You Know Ely’s Needs?

Star Tribune (Daily)

Joe Baltich

Aug. 31, 2013

These days, everybody has a lot to say about mining, tourism and the northern Minnesota economy. Many from the Twin Cities area oppose an underground copper-mining proposal near Ely and have been trying to stop the project in its tracks. 

One of their reasons for doing so is well-intended — they want to protect the Boundary Waters Canoe Area Wilderness. The second reason is more self-serving — they want to protect it for whenever the day comes that they decide to pay a visit.

I felt that it is time someone actually from Ely explained our reality. We want to protect the BWCA all the time, and we also want to be a viable, vibrant community. It is hard to do that with outside forces trying to stifle economic activity. I was recently asked by a Twin Cities resident to sign an anti-mining petition. Here is a condensed version of the letter I sent in reply:

The whole town of Ely is economically collapsing. Last year, 156 people were in the obituaries, and the New Year’s baby was born on Feb. 10. Resort bookings for May and June were substantially off, and I’m pretty sure they will be down for July and August.

The anecdotal estimate is that Ely business is off by about 25 to 30 percent. BWCA use is in fairly steep decline. I should know: I’ve been an outfitter and resorter for my entire life in Ely. The parking lots at the entry points were rarely full, most seeing 25 percent occupancy for the majority of the summer.

As America ages, nobody wants to come and sleep on a rock, only to be restricted to paddling a canoe. They want to jump in a boat or on a snowmobile and go fishing without having the government breathing down their necks with permits and rules — dog sleds but no motors; 2-liter plastic bottles but no cans (although burning plastic is illegal).

You can’t leave the BWCA to go shopping in Ely, because it voids your permit. These are only a smattering of the rules that most Twin Cities tourists can’t get right, so they remain in constant violation of the laws they support so strongly. When they come from out of state, it’s even harder to get them to comply.

So, Ely is slipping. Everything is for sale, and nobody’s buying. A liquor store that had been successful since the early 1970s has been on the market for five years. A restaurant building is sitting empty, rotting — but back when the mines were humming, it too was a successful business.

The first decline for Ely began in 1964, when the government closed 17 resorts under eminent domain. The mines were still running at full speed then, so it was harder to notice.

When the so-called “wilderness gold mine” came to be (the final, most restrictive phase of Boundary Waters regulation in 1978), we began to witness the second decline. Another drop-off came with the introduction of the Internet and electronic “toys” in the 1990s.

Then the economy began to really falter in the mid- to late 2000s, and we’ve lost an entire generation of young kids being brought to the woods to enjoy the outdoors. Their young parents were products of the Internet and shopping malls. They didn’t have the interest or the money to go and be uncomfortable in the Boundary Waters.

Those of us remaining in Ely are experiencing a graduating class of 45 kids. In 1979, it was 159. Today’s graduates aren’t sticking around. The median user age in the BWCA is 55. In another five years, where do you think that’s going to be? I’ve heard idealistic tourists say they “plan” to be paddling the BWCA until they die. Right. People get old, they get injured, and they stop coming.

So, if you’re a mining opponent, what is your plan to see Ely survive? Are you willing to pay substantially more in your personal taxes to keep the city going? Will you contribute to keep the hospital operating, the roads to the entry points paved and maintained, and the schools open?

How much extra are you willing to contribute toward law enforcement in the BWCA region? (Meth use is on the rise in Ely and, I’m sure, the entire region.) Are you willing to quit your good-paying metro-area job and move to Ely to experience feast and famine personally?

And how long will it be before you join the mass exodus out of town after you decide that making a living in Ely on tourism is a very difficult proposition requiring long hours and not a lot of pay, but with guaranteed uncertainty?

Ponder these things as you sign petitions to protect your five-day, essentially free BWCA vacation, driving on roads that we pay for, while being protected by emergency services that we pay for, and stopping in stores that we pay for. Your $100 spent in Ely stores isn’t going to float them through the winter, but your opposition to everything happening in Ely is certainly going to hurt all of us here in the long run.

Despite what the “environmental” detractors are spewing, we can have clean water and a mine 3,000 to 4,000 feet underground. (I’ll bet you didn’t know that it is not going to be an open-pit mine.)

This is 2013, not the Dark Ages. The locals actually like being here far more than you do. We’ve committed to a lifetime of eking out a living when we could have just as easily moved to some metro area for better pay.

Your signing a petition against our support of the project says to me that you somehow know more about and have greater concern for our back yard, which you visit once a year. That’s shortsighted on your part, and rather insulting to the people who mined the very same rock for 88 years before the inception of the BWCA in 1964, a development based upon the existence of pristine waters after all that virtually unregulated mining.

Hopefully, this will enlighten you somewhat. I’m not expecting much, given the Twin Cities crowd. It’s always about their own good time. Nonetheless, I thought I’d give it a try.


Reader’s View: Mines Can Operate in Minnesota Without Hurting the Environment

Duluth News Tribune (Daily)

Andrew Salmela

Aug. 27, 2013

Unlike the writers of two recent commentaries on precious-metals mining, I live in Hoyt Lakes, I was born and raised in Tower-Soudan, and I went to college in Ely. I’m not from Colorado Springs, Colo., or Washington D.C., like recent writers commenting in the News Tribune about our area. I’m a hunter, fisherman and Northland resident. I’m a union member. 

 And I am in favor of the thousands of new jobs that copper and nickel mining can create in Minnesota — without damaging the environment.

David Lien of Colorado Springs made a series of outrageous implications writing in the Aug. 23 News Tribune “in response” to what National Mining Association President and CEO Hal Quinn “didn’t say” in his own column of Aug. 11. The most likely reason Lien couldn’t do much more than imply a series of bad results from precious-metals mining was simple: He has absolutely no proof.

We can’t jump to conclusions based on irrational fears. Minnesota has a long, complicated and thorough process through which all new industries must proceed — including mines. We’ve been mining in Minnesota for 130 years and still have built a thriving tourist industry. We even have some hunters and fishermen, too.

We can do this well in Minnesota — and we will. How do I know that? Because my family’s livelihood depends on it. And so does yours.


Minnesota: PolyMet Mine Review to Be Released in November, DNR Says

Pioneer Press (Daily)

Associated Press

Aug. 23, 2013

A long-awaited revised environmental review of a proposed copper-nickel mine in northeastern Minnesota will be released Nov. 22, the state Department of Natural Resources said Friday.   

The proposed PolyMet mine would be the first copper-nickel mine in the area. The 1,800-page environmental impact statement, a detailed plan for how the mine will operate in compliance with state and federal environmental regulations, has been years in the making. 

PolyMet is proposing a $600 million open-pit mine near Babbitt and a processing center at the old LTV taconite mine north of Hoyt Lakes.

The project has been substantially reworked since the original version of the statement in 2009 to meet concerns of regulatory agencies and others about long-term implications of emissions, especially potentially acidic runoff when the copper-bearing rock is exposed to water and air. 

The U.S. Environmental Protection Agency rejected the original environmental impact statement in 2010 as inadequate.

The new version originally was expected to be made public this summer. But Steve Colvin, deputy director of the DNR's Ecological and Water Resources Division, said the release is several months behind schedule because "of some really good comments that came in" from other agencies, such as tribal resource agencies and the EPA, the Duluth News Tribune reported. 

"We decided to step back and take another look," Colvin said Friday.

Once the statement is released, the public is expected to have 90 days to comment on the revised mining plan, including at three meetings, which the company has said are likely to be held in the Twin Cities, Duluth and Hoyt Lakes-Aurora. The DNR said those meetings are likely to be held in January. 

"We are taking a hard and objective look at this project," DNR Commissioner Tom Landwehr said in a statement. "Our top priority has always been to publish the best possible environmental review of a very complex project."

After taking public comments, the DNR and U.S. Army Corps of Engineers will rework the plan into a final statement, after which the agencies will make a decision on whether the project can move forward to a so-called "adequacy decision." Once that happens, PolyMet can obtain permits to begin construction and mining.


Letter: Learn The Facts About Mining

West Central Tribune (Daily)

Frank Ongaro

Aug. 21, 2013

On behalf of the strategic metals mining industry, I want to thank you for your thoughtful editorial "All Minnesota has stake in mining debate." Minnesota does have incredible natural resources across the state, and we could not agree more with the absolute need to protect what matters most to all of us — clean air and water. 

The Duluth Complex, a rich strategic metals deposit discovered more than five decades ago, runs near the same area that forms the Iron Range in northeastern Minnesota. Technology now available will allow for safe, efficient and economical extraction of the metals, including copper, nickel, cobalt, platinum, palladium, and gold.

These technological advancements, combined with the global need for these metals for use in everything from wind turbines to heart stents, presents an opportunity for our state and for the people who live here — to benefit from a new industry that will grow our tax base and sustain our communities for generations to come with the potential for thousands of direct and indirect jobs.

Minnesota has strict air and water quality standards in place. Every company that proposes a project will be required to design and model their projects to meet the strict environmental standards set forth by state and federal regulatory agencies that protect our air and water.

Each project must go through a litany of steps to prove it will meet all standards. To describe the process as rigorous is an understatement, but a rigorous process is exactly what Minnesotans deserve. We all want clean air and water, and no strategic metals mining project will move forward until the company demonstrates it can produce the metals safely.

Yes, we agree Minnesotans should become educated on the strategic metals mining industry. Learn the facts, and participate in the open and transparent environmental review and permitting processes. Let's protect our air and water while working together to move our state forward and create jobs.


Opinion: Rigorous Standards Will Ensure Clean Mines

Duluth News Tribune (Daily)

Frank Ongaro

Aug. 18, 2013

From President Obama to Gov. Mark Dayton, elected officials have made jobs a top priority. In Minnesota, one thing is certain: There is no better opportunity for creating thousands of great-paying jobs, providing millions of dollars in tax revenue for local governments and generating more than $2 billion in royalties for our schools than the proposed copper/nickel strategic metals mineral development projects. 

Mining already represents 30 percent of our region’s Gross Domestic Product (tourism is 11 percent). And, with the development of these strategic metals projects, we easily can double the size and benefit of the overall mining industry in Minnesota.

Fortunately, we can have these jobs and the spin-off economic benefits they bring — and an environment with clean air and water. There is no debate. We all want the same thing: clean air and clean water.

Some anti-mining groups have been asking questions about keeping our water safe, safeguards and reclamation for leaving a clean site and protection for all of us as taxpayers. Their questions are good ones. Fortunately for all Minnesotans, the state and federal governments have a comprehensive system of statutes, rules, standards and enforcement authority already in place to address all of the concerns.

The Minnesota Pollution Control Agency and the federal Environmental Protection Agency have many specific water-quality standards and regulations. Companies will be required to have designs and controls in place to meet these comprehensive water-quality and air-quality standards, assuring clean and safe water.

The Minnesota Department of Natural Resources and the U.S. Army Corps of Engineers require a thorough environmental review of potential impacts, and they mandate safeguards to both prevent pollution and to reclaim all mining and processing activity: from the mines to the tailing basins to the waste rock to wetland restoration to the re-vegetation of disturbed ground to closure and to post-closure maintenance. All companies are required to demonstrate they have the necessary safeguards in place and leave the site clean.

As for the taxpayers: Not only will they be protected, they will benefit from significant financial gains from strategic metals development. Payroll and sales taxes will go to the state. Net-proceed taxes benefit local governments. And royalties go to the School Trust Fund, providing revenue to every school district in Minnesota.

In addition, our strong financial-assurance requirements in Minnesota assure taxpayers are protected from being financially responsible for any cleanup. The state requires mining companies to have bankruptcy-proof financial assurance in place to cover all possible environmental cleanup costs before it issues a permit. The financial assurance also must be continuously in place, be available to the state at all times, and is adjusted annually by the state. Minnesota also has the authority to deny or revoke a permit if a company does not comply.

Our environmental-review and permitting process in Minnesota — set up by all stakeholders, including environmental groups — is comprehensive, open, transparent and invites citizen participation at every step. We in the mining industry encourage everyone to learn the facts of each project as they go through rigorous review and participate in the open process.

As projects go through this environmental-review and permitting process, each and every project will be required to demonstrate it will meet or exceed Minnesota’s strict air- and water-quality standards in order to receive a permit to mine. If a project cannot, it will not receive a permit. If it can, it will receive a permit.

Finally, these same anti-mining groups support mandates for increasing alternative energy supplies like wind and solar. Great. Bring it on. This is a perfect example of the growth in demand for these metals we use every day of our lives. There are literally tons of copper in each large wind turbine; and hybrid and electric cars, for example, can require up to twice as much copper and nickel than a regular automobile. And that’s not mentioning the metals like platinum that are required for catalytic converters in every vehicle, helping to remove harmful air emissions.

So the answer to the questions is a resounding yes: We will protect our water. Companies are required to leave sites clean. And taxpayers are more than protected; they will benefit. The safeguards are in place.

We can have a win-win-win situation. We can mine the metals here in Minnesota, do it with Minnesota jobs and be an example to the world of the best method of responsible development of our natural resources.

If a company demonstrates it will meet our strict standards, protecting air and water quality, all Minnesotans should say yes to strategic metals mining and the jobs it brings. As true environmentalists, we should all get behind a project that meets or exceeds standards and hold it up as an example for environmentally responsible mining both domestically and globally.


Your Turn: Mining Projects on Range Can Be Safe, Profitable

Saint Cloud Times (Daily)

Rolf Westgard

Aug. 17, 2013

In 2011, we humans extracted and burned some 15 billion tons of coal, oil and natural gas, or 4,000 pounds for everyone on Earth. That put more than 30 billion tons of greenhouse gases into the atmosphere.

Nature passed over Minnesota on its way to states such as North Dakota and Texas where it placed the sedimentary basins in which fossil fuels such as oil formed. Minnesota was not totally forgotten, and we got minerals such as iron ore and the non-ferrous group of copper, nickel, cobalt, palladium, platinum, etc. We’ve dug up most of the iron. But nestled in a wide band, meandering along the Archean granite of the Iron Range, is a world-class deposit of non-ferrous metals worth billions of dollars and thousands of jobs.

Total world annual production of those metals is just 30 pounds or so per person, and their demand and price is rising. Manufacturing wind turbines, solar panels, electric vehicles, catalytic converters and smart grid power lines requires copper, nickel, cobalt, palladium and platinum.

Our own 'gold mine'

Minnesota owns more than 6,000 acres of land in the region, and it stands to collect $2.5 billion in royalties in the coming decades if mining proceeds. This state property is known as “school trust lands.” Under the Minnesota Constitution, income from such lands is earmarked for the Permanent School Fund, which contributes about $60 per pupil to every school district. An analysis by the Minnesota Department of Natural Resources projected that the school fund, with assets of $720 million, could more than triple in size with copper royalties during the next 25 to 30 years.

Two mining ventures have long-term federal and state government leases to mine those metals. The largest venture is the open pit NorthMet Project by PolyMet Corporation of Canada with its partner, the Swiss metals company Glencore. This project expects annual metal production of 38,800 tons of copper, 9,000 tons of nickel, 400 tons of cobalt, 22,200 ounces of platinum, 87,100 ounces of palladium and 13,800 ounces of gold.

The other mine is an underground project, a partnership of Duluth Metals of Canada, Twin Metals Minnesota LLC and Chile’s Antofagasta, the world’s largest copper producer.

'Acid rock drainage'

Environmentalists are lined up in opposition to these projects, viewing them as a serious threat to water quality. The issue is these ores are reactive sulfide minerals. When mined, the sulfur comes in contact with water and oxygen, forming sulfuric acid. This acid can then dissolve and carry away toxic elements, polluting water supplies in a process known as acid rock drainage.

In the past, acidic metal-rich waters from mining have damaged the environment when mining companies did not follow safe practices. Today, mining companies have to be good stewards of the environment, and our laws are made to ensure this happens.

At Ladysmith, Wis., Kennecott operated an open pit copper sulfide mine that operated 140 feet from the Flambeau River in the 1990s. During the mining all of the surface area drainage and pit pumping water went into a treatment plant that successfully purified the water so it could be safely returned to the environment.

Upon closure, to avoid ARD, the pit was backfilled with the waste rock that was stripped from the pit along with 30,000 tons of limestone. Limestone was added to neutralize any ARD that formed while the pit was exposed. There were no violations of its permits in construction, operation and closure. These are practices required in Minnesota.

Project advocates include Sens. Amy Klobuchar and Al Franken, and area mayors who want quality jobs on the depressed Iron Range.

The 714-page Draft Environmental Impact Statement (DEIS) for the PolyMet Project from the Minnesota Department of Natural Resources and the Corps of Engineers confirmed good practices, and it is generally positive about the project. It states that if all commitments are met, there is no serious impact on the environment.

The Twin Metals project is northeast of the PolyMet NorthMet project and it can drain north toward the Boundary Waters. Careful regulation can prevent any harm. Its DEIS is due shortly.

It is time for the dirt to fly.


Reader’s View: Learn The Facts Before Deciding on PolyMet

Duluth News Tribune (Daily)

Chad Sahr

Aug. 17, 2013

Make decisions on facts, not fear. I think it’s foolish to oppose something without having all facts. And here are some facts about PolyMet’s proposed mining project.   

PolyMet will use an existing mining site that once processed three times more ore than the company proposes to process now. This project will revitalize our mining heritage, which began on the site more than 60 years ago; it won’t destroy Minnesota’s heritage.

PolyMet’s proposed operations would not be in the Boundary Waters watershed. It’ll be physically impossible for water from PolyMet to reach the BWCAW due to the Laurentian Continental Divide. In addition, no water coming into contact with mined material would leave the mining or plant site without being tested and treated if necessary.

PolyMet is a publicly traded company, meaning profits go to shareholders, many who live in Minnesota.

Moreover, foreign companies aren’t bad. They bring much-needed investment to Minnesota. Look around. There’s UPM Blandin, a Finnish company; ArcelorMittal, headquartered in Luxembourg; and CN, or Canadian National. They all provide economic benefit and jobs to Minnesota.

The claim we don’t need to mine is crazy and foolish. We all use the metals that’d be mined in northern Minnesota. In fact, some of the same people opposing PolyMet worked to pass a solar mandate during the 2013 legislative session. Do you know what a key component is in solar panels? It’s copper. The environmental movement is driving up the need for these metals, yet environmental activists don’t want them mined. Sure, we can and do recycle, but that’s not enough to meet demand.

Environmental groups seem to want to instill fear and divide communities. They say we have to choose jobs or the environment, but that’s hogwash. We can have both.

Please get real facts before deeply opposing or supporting anything.


Editorial: EPA Gives Hopeful PolyMet Signal

Mesabi Daily News (Daily)

Aug. 17, 2013

PolyMet’s Jon Cherry knows how regulatory agencies tick when it comes to mining. Thus his assessment on Tuesday of comments by the Environmental Protection Agency regarding PolyMet’s preliminary supplemental draft EIS carries significant weight.

And that assessment by PolyMet’s president and chief executive officer is good news, indeed.

While on the Range earlier this week to attend a business event, Cherry said that a recent EPA letter on PolyMet’s Environmental Impact Statement to regulators contains positive language for the copper/nickel/precious metals project in the footprint of the former LTV Mining Co., near Hoyt Lakes. He said the letter indicates that progress has been made, questions answered and the agency is looking to the project moving forward.

It was just a little more than a year ago that Cherry was selected by PolyMet’s board of directors to be CEO and president and also chairman of the board’s safety, health and environmental committee.

It was a good and wise choice.

Cherry was with Rio Tinto for more than 20 years, where he worked in a number of positions, including general manager. In that position, he was responsible for permitting and the initial development of the Eagle Mine in Michigan’s Upper Peninsula.

And prior to that, he was vice president with Rio Tinto, responsible for strategic direction in environmental permitting and compliance, legal matters and external relations related to mine development of the Resolution copper project in Arizona, United States.

He knows mining well. And he has plenty of experience dealing with Washington regulators.

PolyMet has been in development for more than nine years now. The environmental review has been exhaustive. We believe it has been far too long to get a mining project that will create thousands and thousands of construction, vendor and permanent jobs on the Range.

But if that means this first copper/nickel/precious metals mining operation in Minnesota will be environmentally stronger to receive a blessing from all or most regulators soon — well then, perhaps it will be worth it in the long run with other projects such as Twin Metals waiting in the wings.

But let’s have no more delay or steps backward.


EPA Releases Recommendations on Polymet’s Mining Project Plan

Northland’s NewsCenter

Krista Burns

Aug. 15, 2013


The U.S. EPA has completed its review of the Preliminary Supplemental Draft Environmental Impact Statement (PSDEIS) for the development of PolyMet’s Minnesota copper and nickel mine.

The EPA sent a letter last week to the U.S. Forest Service, Minnesota Department of Natural Resources and U.S. Army Corps of Engineers, providing constructive recommendations for preparing the draft Environmental Impact Statement for additional public feedback.

The EPA notes in its review of the project plan that the PSDEIS "reflects significant progress in designing and clearly documenting the project". The letter went on to say that the EPA appreciates the constructive discussions with all parties involved in moving forward with the mining project plan.

To read the full report and the recommendations from the EPA, click here.

If Polymet's project is approved, it will become Minnesota’s first copper-nickel mine. The $600 million open-pit mine will be located near Babbitt and a processing center at the old LTV taconite mine north of Hoyt Lakes.

Billions of tons of precious metals lie beneath the Duluth Complex, an area that covers parts of St. Louis, Lake and Cook Counties.

The project is expected to create 350 jobs for about the next 20 years. PolyMet also would recover gold, platinum, palladium and other valuable metals.

Frank Ongaro, with Mining Minnesota, says a pair of proposed projects to mine the metals will bring thousands of jobs to the Northland.

"We have them here [precious metals], we can develop them here and it will be a tremendous economic boon to Northeastern Minnesota and the entire state," said Ongaro. "This is a win-win-win opportunity."

There will be a 90 day public comment period with three public hearings in Duluth, Hoyt Lakes and Minnepolis to help craft the final EIS.