In blocking Twin Metals’ leases, Dayton rules by fiat
Governor’s decision runs contrary to the Constitution and DNR, and sends a chilling message to all businesses.
By Kate Lehman April 13, 2016 — Star Tribune
Suppose you’ve decided to open a restaurant and have gone about planning your business according to all of the rules and regulations, building and health codes, and employment laws. You’re cooperating and consulting with various state and local agencies, following all of the requirements, and you have a commitment to making sure it’s done right. And you’re bankrolling all of this — a tidy sum. But then, before you can even order a stove, the governor tells you that you cannot open the restaurant — not because you’re in violation of any existing rule, but because he doesn’t think the restaurant is a good idea.
And then, the governor calls federal authorities — say, OSHA, the federal Occupational Safety and Health Administration — and says that your restaurant should not be allowed to open because he thinks it’s a bad idea. And there you are, stuck. There is no process to correct a problem, because nothing is “wrong.”
This is exactly what Gov. Mark Dayton has done by denying Twin Metals Minnesota access to state lands in order to conduct additional environmental and technical research and by lobbying the federal government to deny federal mineral lease renewals.
Never mind that the company already holds several state mineral leases in the area, some of which date to 1988. Never mind that the Twin Metals project is years from having a plan to submit for permitting. And never mind that the project already has invested $350 million in research and planning — much of it spent with local workers and vendors, as well as for mineral and land leases with the state, private parties and the federal government.
Twin Metals Minnesota is not alone among mining exploration companies concerned about Dayton’s rule by fiat. Large and small companies are exploring for mineral deposits that may expand and enhance Minnesota’s long-standing mining industry. The state Department of Natural Resources (DNR) actively solicits companies to lease state-owned minerals in northeastern Minnesota. The form and rate structure of these leases are set by the Legislature.
Thousands of acres of metallic mineral leases have been granted since 1966, while exploration work for metallic minerals has been conducted for decades. There is yet to be an operating nonferrous mine in Minnesota, yet the leasing, exploration and research work alone have resulted in hundreds of millions of dollars of expenditures.
A recent lease sale of nearly 16,000 acres included companies exploring for gold and other platinum group metals. All leaseholders must adhere to regulations governing exploration and mining activities. Among other areas, they leased acreage in the Rainy River watershed. Lease approval was granted by the Minnesota Executive Council on March 2, just four days before Dayton overruled his own DNR’s plan for the Twin Metals access.
The DNR is acting in accordance with the state Constitution and state law to use natural resources for the benefit of the citizens, especially to generate income for the school trust funds. Dayton’s position is contrary to the Constitution, statute and the Executive Council. The governor’s edict undermines the work of the DNR and sends a chilling message to all mining exploration companies interested in working in the state. Rather than base decisions on research, scientific fact and compliance with regulations established by law, the governor has unilaterally decided that this particular project is a “bad idea” for the state and the country. He has removed the decision from the regulatory process and out of the hands of Minnesotans. He is denying us research that may lead to a significantly better understanding of the watersheds and that may lead to technological advances.
Minnesotans must recognize that the chill isn’t going to be limited to mining. If the governor can ignore the rules and process for the orderly development of mineral resources, what prevents him from deciding he doesn’t like the idea of another business?
Businesses of all types need reliable regulations. Selective and inconsistent enforcement creates an increasingly uncertain environment. Minnesota already has obstacles to attracting businesses; Dayton’s failure to follow the state’s own rules adds another impossibly high hurdle.
Kate Lehmann is the chief financial officer of Vermillion Gold Inc. and Beaver Bay Inc., Minnesota-based nonferrous minerals exploration companies. Beaver Bay owns a minority interest in the Twin Metals project.