New law helped pave way for Michigan nonferrous project
Mesabi Daily News
July 30, 2010
A nonferrous mining project going ahead in Upper Michigan has gone through some of the same travails as the PolyMet nonferrous project in Northeastern Minnesota in recent years.
The Kennecott Eagle mine broke ground this summer to start construction of surface buildings in a three-year construction span that will result in startup of the underground nickel mine by 2013. It will create 200 permanent jobs and 500 construction jobs.
The PolyMet copper/nickel/precious metals project has already had nearly five years of environmental review and is still in the Environmental Impact Statement process. The project, slated for the former LTV Mining Co. site near Hoyt Lakes, will create 400 permanent jobs, more than 500 spin-off positions and 1.5 million hours of construction work.
Other nonferrous mining projects on the east Iron Range are waiting in the wings to follow a PolyMet mine opening.
The Michigan mine, located in northern Marquette County in the Upper Peninsula, was first considered more than a dozen years ago in an area where there had been an extensive mining district previously.
But it was not until 2004, when extensive new laws were brought into being by Michigan state government, that serious planning began leading to the go-ahead for Kennecott Eagle.
While a number of companies were exploring for minerals in Upper Michigan, Kennecott was the first one to apply for permits under the new law, said Kennecott Eagle spokesperson Deborah Muchmore.
The 2004 law made Michigan one of the strictest states in the nation for nonferrous mining oversight, but also brought it into the modern era of technological advances in for that kind of mining. All stakeholders, mining companies, regulators, communities and environmental groups, had key parts to play in crafting the laws, she explained.
By 2006, Kennecott went ahead with applying for permits for mining, water quality and air quality.The state was the lead authority on an environmental impact assessment. While several appeals are still pending, the three-year construction phase for Kennecott Eagle has begun. In July, the U.S. Environmental Protection Agency determined that no federal permit was needed for an underground water discharge system as Kennecott planned to build the system above-ground.
"The permitting process was smooth and rigorous," Muchmore said, "and was challenged all the way through" by "highly vocal" groups opposed to nonferrous mining.
The mine, when operational by 2013, is expected to produce about 300 million pounds of nickel and 250 million pounds of copper, in what will be considered the first primarily nickel mine in the U.S., according to Kennecott Eagle's Web site.
Waste rock will be stored underground, and ore will be brought to the surface for transport by truck to the nearby, existing Humboldt Mill for processing and then shipped elsewhere for more processing. Kennecott is expected to invest more than $469 million in the project. Nickel is used in the making of stainless steel, laptop computers, high-tech batteries and other advanced products.
It's important for mining companies in the current era to understand the rules and reasons for cafeful, safe mining, and for regulators to have oversight. Communities want economic benefits from mining and employment with it, "and at the same time you want your environment protected," Muchmore said of the 2004 legislative crafting.
The input from all sides in the Michigan legislation has been worth it for everyone, she said. Still, "It has been a long development process."
In Minnesota, PolyMet official LeTisha Gietzen observed that Kennecott's situation has been overseen by state officials only, with no federal requirements to be met. "That changes things significantly," she said. "They're really not comparable."
On the Iron Range, the nonferrous mining company has had "a ton of local support for the project," with only some opposition mostly centered in theTwinCities.
The recently modified Environmental Impact Statement process including the EPA and the U.S. Forest Service "will streamline the process," she said.
Copper mine near BWCA gets financing
Minneapolis Star Tribune
July 24, 2010
A Canadian company has signed a deal with a global mining partner to develop a copper-nickel mine southeast of Ely, Minn., that would be larger than the controversial Polymet mine already planned on the Iron Range.
Unlike the Polymet operation — a surface mine that environmentalists say threatens to pollute waters that run to Lake Superior — the new mine would be underground. But its eastern edge would lie only a few miles from the Boundary Waters Canoe Area Wilderness, raising the possibility of any pollution quickly reaching the BWCA.
Known as the Nokomis deposit, the area is thought to be so rich in copper, nickel and precious metals that it could produce 40,000 tons a day — possibly more — for decades.
"We believe this project has the potential to be one of the biggest development projects in the United States in mining," said Christopher Dundas, chairman of Duluth Metals Ltd., the Toronto company that holds key mineral rights for the proposed mine.
Duluth Metals had entered into a joint venture called Twin Metals Minnesota LLC with London-based Antofagasta plc, which is furnishing $130 million to pay for feasibility and engineering studies.
Dundas said the money will make it possible for the companies to "talk to the state of Minnesota about a real project."
He said the total investment in the underground mine and above-ground processing plant could exceed $2 billion. That's two to three times the estimated cost of the Polymet copper-nickel mine near Hoyt Lakes.
Together, the two mines could bring new vibrancy to the Iron Range, where for decades taconite was king. But environmental groups have raised concern about both projects, because of worries about pollution from tailings.
Antofagasta, one of the world's largest mining companies with $188 billion in revenue last year, owns 60 percent of the Twin Metals joint venture and has rights to increase its stake. It also is loaning $30 million to Duluth Metals to cover its exploration costs, and would arrange overall financing if the project is deemed worthy.
Polymet, based in Vancouver and backed by Swiss mining giant Glencore, has proposed a $600 million open-pit mine. After five years of environmental study, the project faces further review because of pollution risks raised by the U.S. Environmental Protection Agency.
In an interview, Dundas said the ore from the proposed mine is 1,500 to 3,000 feet down. Originally, engineers considered using traditional vertical shafts, but new studies will consider building a 4- to 5-mile-long inclined tunnel starting at the mine's western edge, the farthest point from the BWCA, he said.
"We believe at this stage of planning that we can meet or exceed all of the state standards," Dundas said. "You are not really going to see or hear anything, because it is all underground."
With its financing set, Dundas said the venture is prepared to approach the Minnesota Department of Natural Resources and other agencies to discuss the timing of the environmental study, permit reviews and other matters. Regulatory review is expected to take several years.
Though Duluth Metals controls 3,000 acres of the deposit, the U.S. Forest Service also owns some of the land and mineral rights, Dundas added. Other land is held by private owners and the state of Minnesota, he said.
Duluth Metals Signs Definitive Participation Agreement With Antofagasta Plc On Nokomis Project
Duluth Metals Headlines
July 21, 2010
Duluth Metals Limited ("Duluth") (TSX: DM) (TSX:DM.U) is pleased to announce that it has signed the formal definitive participation agreement ("PA") with Antofagasta plc ("Antofagasta") (LSE: ANTO.GB), which implements the previously announced Heads of Agreement (see SEDAR filing and press release dated January 14, 2010) on the joint venture development of the Nokomis Project in northeast Minnesota, USA. The signing of the PA allows the ramp-up of activities, which will see US $130 million spent over the next three year period to advance the project towards a bankable feasibility study, subject to all applicable government and regulatory approvals.
The joint venture brings in a major global mining partner with financial capability and proven expertise in building and operating large mining projects to aggressively accelerate the development of this large scale copper-nickel-platinum-palladium-gold project. The new joint venture company, Twin Metals Minnesota LLC ("Twin Metals"), is 60% owned by Duluth and 40% by Antofagasta. A new management team is currently being formed. Both Antofagasta and Duluth are appointing three representatives to the Board of Directors of Twin Metals.
Under the terms of the PA, Antofagasta will provide US $130 million in direct funding to the project as its initial contribution to the joint venture. Upon making such contribution and completing a bankable feasibility study, Antofagasta has the option to acquire an additional 25% equity interest in Twin Metals based on an exercise price calculated in a pro-rata share of 1.0 times Net Present Value of the project, which will be determined by the bankable feasibility study. Under the terms of the PA, Antofagasta has agreed to provide Duluth additional loan and financing facilities of up to US$30 million to cover Duluth's share of subsequent project expenditures, which will ultimately be repayable in cash, Duluth shares or offset against the 25% option exercise price. Full draw down by Duluth of the additional loan and financing facilities totaling US$30 million, together with the commensurate Antofagasta spending contribution, would make available an additional US$85 million of potential funding to the project for expenditures beyond the $130 million commitment by Antofagasta. In addition, Antofagasta has undertaken to organize a common project financing for the large capital cost financing requirements of the project. Duluth expects development activities at Nokomis to proceed on an accelerated basis and anticipates pre-feasibility and bankable feasibility studies to be the focus of activities over the next 24-36 months.
As part of the PA, Duluth Metals is retaining approximately 31,000 acres of mineral interests on exploration properties adjacent to and near-by the joint venture holdings. In addition to actively participating in the joint venture on Nokomis, Duluth Metals will undertake a large scale exploration program on its retained exploration properties.
Currently, the Nokomis deposit is estimated to contain 550 million tonnes of Indicated Resources grading 0.639% copper, 0.200% nickel and 0.660 grams per tonne TPM (platinum-palladium-gold) for a copper equivalent (CuEq) grade of 1.51%, plus an additional 274 million tonnes of Inferred Resources grading 0.632% copper, 0.207% nickel and 0.685 grams per tonne TPM for a CuEq grade of 1.53% (See Dec 9, 2009 NI 43-101 "Technical Report on the Mineral Resource Estimate for the Nokomis Deposit" and press release dated Dec. 11, 2009 available at www.Duluthmetals.com).
Minnesota is a mining friendly state which has more than a century of mining history. The mining district in northeastern Minnesota has excellent mining infrastructure, including power, well-developed roads, railway networks, equipment-supply centers, a highly productive local labor force and proximity to three deep water ports on the north shore of Lake Superior.
David Oliver, P. Geo. is the Qualified Person and Project Manager for Duluth, in accordance with NI 43-101 of the Canadian Securities Administrators, and is responsible for the technical content of this press release and quality assurance of the exploration data and analytical results.
On the Antofagasta transaction, Duluth's financial advisor is UBS Securities Canada Inc. and Canadian legal advisor is Fraser Milner Casgrain LLP.
About Duluth Metals
Duluth is committed to acquiring, exploring and developing copper, nickel and platinum group metal (PGM) deposits. Duluth's principal property is the Nokomis Property located within the rapidly emerging Duluth Complex mining camp in northeast Minnesota. The Duluth Complex hosts one of the world's largest undeveloped repositories of copper, nickel and PGMs, including the world's third largest accumulation of nickel sulphides, and one of the world's largest accumulations of polymetallic copper and platinum group metals.
About Antofagasta plc
Antofagasta has three business divisions: Mining, Transport and Water. Antofagasta Minerals S.A., the mining division, is one of the world's largest copper producers. Its activities are mainly concentrated in Chile where it owns and operates three copper mines with a total production of 442,500 thousand tonnes of copper and 7,800 tonnes of molybdenum in 2009. Antofagasta has recently commissioned a brownfield expansion at its Los Pelambres mine and a new mine development, Esperanza, is expected to enter into production at the end of 2010. Together, these are expected to increase group copper production by approximately 60% to over 700,000 tonnes from 2011. A feasibility study is also in progress at Antucoya in Northern Chile. In Pakistan, a feasibility study is at its final stages at the Reko Diq joint venture. Antofagasta also has exploration programs in Africa, Europe and the Americas.
Nokomis project gets $130 million infusion
FOX 21 News
June 21, 2010
TORONTO – A South American company is providing a $130 million cash infusion into a proposed Northland precious metals mine.
On Wednesday, Toronto-based Duluth Metals signed an agreement with Chile-based Antofagasta PLC for the Nokomis Mining Project. The new joint venture is called Twin Metals Minnesota.
The companies hope to mine copper, nickel, platinum, palladium, and gold at a site south of Ely.
Duluth Metals expects to ramp up work on feasibility studies over the next two to three years.
PolyMet Waits For The O.K.
Northland News Center
July 20, 2010
The old LTV mine site still needs a lot of work, but PolyMet officials say it will be well worth their investment.
"We will be reusing much of the existing infrastructure which really helps reduce the impact to the environment. We'll be able to reuse the infrastructure in many ways," says LaTisha Gietzen
LaTisha Gietzen, PolyMets Vice president of Public, Government and Environmental Affairs, says the supplemental draft environmental impact statement is currently being constructed by the lead agencies of the project which include the Minnesota D-N-R, the U.S. Army Corps of Engineers, and the U.S. Forest service.
All of the agencies involved are hoping to mitigate concerns environmentalists have about harmful effects non ferrous mining has, including loss of wetlands and wilderness, as well as acid drainage that could damage local water basins for hundreds of years.
Once the revised E-S is passed, the project could quickly become reality, with just a final draft of an E-S yet to be approved.
"Once the record of decision has been done on the final impact statement then permits will be issued."
Permits that have been long awaited by local residents.
For cities like Hoyt Lakes and Aurora, big projects like this also mean big opportunities for the communities.
Mayor Mary Hess of Aurora says residents here are as tired as PolyMet at playing the waiting game.
"Everyone is very anxious, it's been years and they have spent millions of dollars, and people are really looking forward to something happening out there," says Mayor Hess.
Hess says PolyMet is doing all they can to address concerns about the environmental impact a non ferrous mine could have.
She also says with non ferrous mining picking up steam, PolyMet isn't the only one that could help stimulate Aurora and the communities.
"I've also talked to other companies that may have interest, you know if PolyMet goes there are other deposits out there and there are other companies that are interested in too, so we are very excited about it," says Mayor Hess.
PolyMet says more than 4 hundred permanent jobs will be available if all goes well.
Rio Tinto’s Kennecott Eagle Minerals Company Signs Construction
Kennecott Eagle Minerals
July 19, 2010
(Ishpeming, Mich.) – Rio Tinto and Kennecott Eagle Minerals Company (KEMC) are pleased to announce the signing of a contract with The Boldt Company (Boldt) for structural, mechanical, and electrical work at the Eagle Mine Site located in Michigamme Township, about 25 miles northwest of the City of Marquette. Mobilization began 15 July 2010.
Rio Tinto is committed to an incident and injury free workplace and our goal is zero harm. Boldt executives have a goal of "Zero Incidents" and make safety a part of the everyday culture. In 2008 Boldt was named one of "America's Safest Companies" according to EH&S Magazine (formerly Occupational Hazards magazine), one of the leading safety journals in the nation. "Our first business priority is to make sure everyone goes home safely," said Jeff Johnson, Vice President of Human Resources and Risk Management. "Our customers trust us to get their projects done on time and on budget, but they also expect us to run a safe worksite."
Boldt, a member of the Upper Peninsula Construction Council, has built a number of significant projects in the Upper Peninsula of Michigan including the new Bell Memorial Hospital in Ishpeming, the Baghouse upgrade for Units 5,6,7,8, and 9 at the Presque Isle Power Plant in Marquette, The Berry Event Center and Art & Design Studio Addition for Northern Michigan University, remodeling of Wadsworth Hall at Michigan Technological University in Houghton, as well as numerous mining and paper mill projects.
Boldt executives understand the value of using local workers and subcontractors. Tom Boldt, CEO says "Our first goal is always to tap into the local workforce for our projects." Tom Boldt indicated that "Based on other similar projects, the economic impact of employing hometown skilled labor and regionally based subcontractors is significant and also produces a high quality outcome for our customers." On another Ishpeming area project Boldt currently employs 80 workers, 95% of those workers are from the local area.
Rio Tinto is pleased to be working with Boldt on the Eagle Project.
The Boldt Company is headquartered in Appleton, WI and provides professional construction services to customers in a variety of industrial, institutional, healthcare, commercial, and renewable energy markets nationwide. Boldt is among the top-ranked general contractors in the nation and has 13 offices throughout the United States. www.boldt.com.
About Kennecott Eagle Minerals
A wholly owned unit of Rio Tinto, Marquette County, Michigan-based Kennecott Eagle Minerals Company is the owner, developer, and future operator of Eagle Mine in western Marquette County of Michigan's Upper Peninsula (USA). When built, Eagle Mine will be the only primary nickel mine in the U.S., and is expected to produce 300 million pounds of nickel, 250 million pounds of copper and trace amounts of other minerals. During operations Kennecott will employ more than 150 people, as well as numerous contractors. www.kennecotteagleminerals.com
About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the United Kingdom, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange. Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminum, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe, and Southern Africa. www.riotinto.com
Clash of the Titans: Mining/Environment
Mesabi Daily News
July 10, 2010
Gubernatorial candidates of the two major political parties all say they would, as governor, work to streamline the state's permit process for mining and other projects.
The PolyMet copper/nickel/precious project is in the final stages of the Environmental Impact Statement process – but that's after more than five years of environmental review at a cost of more than $20 million.
And that's far too long, say DFL candidates – party-endorsed House Speaker Margaret Anderson Kelliher, former U.S. Sen. Mark Dayton and former House Minority Leader Matt Entenza – and Republican-endorsed gubernatorial candidate Rep. Tom Emmer of Delano. The $602 million PolyMet project alone would create 400 permanent jobs, more than 1.5 million man hours of construction work and hundreds of spin-off jobs. It is the farthest along of several nonferrous ventures.
"Waiting six years and longer for an answer is not acceptable," said Kelliher.
"The second year of my administration we would take a comprehensive look – from top to bottom – to streamline the review process to remove duplication and triplication. The permit process should not be able to make a project economically unfeasible," Dayton said.
"The EIS was created to provide a fair and balanced approach on the economic and environmental issues of projects. But it has crossed the line. It is no longer balanced. Some people are using the EIS to prevent the advancement of job opportunities. That's what is happening with PolyMet, and it's not acceptable," said Emmer.
Comments from Kelliher, Dayton and Emmer were in telephone interviews. Entenza responded by e-mail with clipped answers, mostly yes and no. On the permitting process, Entenza simply said "yes" when asked if he would work as governor to streamline the mining permit process.
Kelliher, Dayton and Emmer said they would not work for more financial set-asides by companies of nonferrous projects, as has been proposed by some lawmakers and environmental groups concerned about PolyMet and other possible ventures.
"Overall people are just concerned to make sure there are the resources available to protect any cleanup. Existing law provides that," Kelliher said.
"I wouldn't want to make it more stringent. It's already in statute and sufficient. I would oppose anything that would be punitive to destroy projects and jobs," Dayton said.
"Absolutely believe we have standards in place. We have adequate standards now, we have a good system in place. The EIS, instead of protecting resources and being used as a tool for everyone, including business, to operate in a good framework … is now being used at times as a tool to prevent these projects from moving forward," Emmer said.
"I support job creation efforts on the Iron Range that are consistent with our existing environmental laws," Entenza said.
All candidates said they believe mining and the environment can work together, producing jobs with good land and water resources practices.
"We all want the same things that have nothing to do with party affiliation. We all want clean air and water and to be good stewards of the land. But we also need to pay attention to jobs," Emmer said.
"We can create jobs and protect clean water. Both can be done in the state. And technology has advanced to help us do so. There is a future for mining in Minnesota. It can be done responsibly and with protection," Kelliher said.
"The two of them (mining and the environment) can definitely be complementary. We can serve the best interests of both. And the state can benefit from my experience in the (former Gov.) Rudy Perpich Administration (as commissioner of Economic Development and Energy and Economic Development," Dayton said.
We all have one more chance on making PolyMet project right
Mesabi Daily News
July 10, 2010
Like many Ely residents, we gave the Canadian company PolyMet the benefit of the doubt when they promised us a "new day" for mining and a new way to "do it right."
The Iron Range needs jobs and the world wants copper so it seemed that PolyMet's proposal offered some promise. It's a very risky venture because this new mining technology is unproven and PolyMet has no mining experience. But PolyMet assured us that oversight agencies would address our concerns in their Environmental Impact Statement.
However, when their draft EIS came out, it was soundly rejected as "unacceptable" by the Environmental Protection Agency. They found a lot of devils in the details. And while most of the scientific and legal jargon in this 1,000-page report is beyond us, one detail did catch our attention. On page 4.1-84, the report concedes that this project may leach toxins into our ground water for "over 2,000 years." How long does PolyMet propose to deal with this problem? "45 years." What provisions are proposed for dealing with it after that? None.
Wow! What a confidence killer that revelation is on our hopes for this project. We just hope we're still lucid enough in 45 years to explain to our great-grandchildren why they may no longer be able to drink the water here.
"Over 2,000 years" is essentially forever. Some states prohibit mines that require such perpetual care. Other states require that such risky projects include financial assurance that covers treatment of toxic seepage in perpetuity. Minnesota does not yet have such long-term safeguards in place. But we're being asked to be the guinea pig for unproven mining technology being attempted by a company with no mines.
Fortunately, the EPA acknowledges these concerns. It has required PolyMet to revamp their EIS and find better ways of coping with acid-leaching mine tailings. Frank Ongaro, head of Mining Minnesota, notes that our state has such stringent environmental protection in place that if there's a problem with this project, oversight agencies will catch it. He's right and they did. The EPA found that this project "will result in unacceptable and long-term water quality impacts."
Ongaro assures me that "alternatives that will be considered for waste handling have all but technically eliminated that possibility."
Let's hope he's right because these are not trivial issues: The EPA notes that no copper mine in the world has avoided acid mine drainage. Toxins include methyl mercury, sulfuric acid, arsenic, copper, nickel, lead, and manganese. Even trace amounts of some in drinking water have been linked to severe cognitive and motor impairments, to which children and pregnant women are most vulnerable. Health impacts include IQ and memory loss, blindness, lung cancer, heart disease, cerebral palsy and Parkinson's disease.
PolyMet has one more chance to "do it right." And so do we. As they prepare their supplemental EIS, let's insist that our oversight agencies assure us that this project will never contaminate our ground and surface water. Other mining companies ensure against long-term pollution. Given Minnesota's mining expertise, why can't PolyMet?
You can be sure any number of Gulf towns wish they had the opportunity we now have to speak out before the earth's crust is cracked open again with potentially disastrous consequences. Chances are BP wishes those towns had had that opportunity as well.
With the US Forest Service now involved, we can send our concerns to our friends and neighbors at our Superior National Forest office. As guardians of the world's most popular watershed wilderness, they are surely as concerned about these issues as we are. Just send a note to: firstname.lastname@example.org saying, "Please ensure that the proposed mining projects do not pollute our watersheds."
Yes, the Iron Range needs jobs and the world wants copper. But we're not desperate enough yet that we would risk the health of our great-grandchildren in exchange for that … would we?
Paul & Susan Schurke