News

Mesabi Daily News
February 20, 2010

TAMARACK, Minn. - Nonferrous mining giant Kennecott Rio Tinto is pursuing mineral drilling exploration in Northeastern Minnesota this winter while developing a copper-nickel mine in Upper Michigan.

Kennecott is using two state firms to handle the work at its Minnesota site in Aitkin and Carlton counties - Idea Drilling of Virginia and Longyear Co.

of Little Falls. Exploration has been ongoing since 2001.

Kennecott Rio Tinto geologist/project manager Robert Peter said Friday that this winter's campaign in eastern Aitkin County began in January and will close down in March, after three rigs have drilled 15-20 holes and 20,000 feet of core samples are taken. Drilling averages about 700 to 800 feet down, with the deepest going 2,200 feet down. Samples will be examined and logged, with some being sent for analysis.

"We have had very mixed results," Peter said, but added that the area holds prospective sites.

In 2008, one such site yielded a much higher grade of sample, so "the potential is real," he said.

A dozen persons work at Kennecott's office in Tamarack, with about nine of those locally hired. While the 2008-09 recession affected some parts of the operation, no employees at Tamarack were laid off.

"Things certainly slowed down a bit with the global economic crisis,"

Kennecott Community Relations Manager Matt Jeschke added.

Some nonferrous projects like Duluth Metals are actively exploring their Northeastern Minnesota parcels, while fledgling operation PolyMet is awaiting final environmental impact statement approval to go forward with permits.

"We're much further back," Peter acknowledged of Kennecott, in exploration.

If any mine did develop, much would depend upon the resources found to determine how processing would be shaped, whether a closed, hydrometallurgical circuit like the one PolyMet is planning, or by some other process.

"We would be considering all possibilities," Peter said.

Baseline environmental data is being collected for possible future use.

And while nickel and copper prices have come back a ways, "we aren't influenced by today's prices," and look instead to future prospects, Peter explained.

Support in the area for the Tamarack Project is positive, Jeschke said. "We definitely feel like a part of that community," he added.

Kennecott maintains an open-door policy at its Tamarack office at 150 Warren Street for anyone who wants to talk about issues or concerns.

The Kennecott Eagle Minerals Co. has received all of its permits to operate in Michigan's Upper Peninsula as of Feb. 9, at a former mining site called Humboldt Mill. The proposed copper-nickel mine the company plans to develop is near Marquette, Mich., while it maintains offices in Ishpeming.

Kennecott received a nonferrous metallic mine permit for general operations, a pollutant discharge elimination system permit for returning treated wastewater to the environment, an air use permit for air emissions and an inland lakes and streams permit for reactivating and improving the tailings reservoir, the company said in an online statement.

The mill will be used to crush and grind rock, with the goal of producing copper and nickel concentrates to send to processing facilities. A new water treatment plant will be built on the site to make sure water will meet quality standards.

The company said it plans to invest nearly $100 million in the brownfield redevelopment, and will employ 50 to 70 full-time plant workers and 200 workers during construction. A three-year construction plan will result in the Eagle Project coming into production in 2013.