The Daily Mining Gazette | November 6, 2013
By Garrett Neese - DMG writer (email@example.com)
HOUGHTON – Despite the economic benefits of mining, the instability and other drawbacks mean the western Upper Peninsula is better off looking elsewhere for prosperity.
That conclusion was reached by Thomas Power, who presented the results of a recent study on the economic impact of copper mining Tuesday night in the Upper Peninsula. Power, a research professor and former economics department chair at the University of Montana, prepared the report for Friends of the Land of Keweenaw, an environmental advocacy organization.
Power appeared at Michigan Technological University Tuesday as part of its Green Lecture Series.
Garrett Neese/Daily Mining Gazette
Thomas Power, a research professor and former economics department chair at the University of Montana, delivers his talk “The Economic Anomaly of Mining: Treasure and Tears” at Michigan Technological University Tuesday night.
In his report, he argues the western U.P. should concentrate on “economic gardening” – supporting start-up and existing businesses – and protecting and enhancing environmental amenities and other “quality of life” assets.
Power said he doesn’t have any animosity toward mining. He came from a metal mining family, and spent the first 18 years of his life falling asleep to the “soft thump” of the Bay View Rolling Mill in Milwaukee. But in many cases, the drawbacks of mining outweigh the positives.
Mining grew popular because of some very real economic benefits: the ability to extract valuable minerals, the high wages for workers – at times, averaging 40 percent higher the average working wage – and the tax revenues for municipalities.
However, any positive impact is tempered by instability, Power said – not just the familiar boom-bust trajectory, but the “flicker.” That occurs as prices in the international metal markets fluctuate, affecting the mine’s profitability. In turn, the mines compensate by reducing the labor force.
“It’s one thing to talk about high wages, but if the high wages are unreliable, the impact of those high wages on the local economy is going to be different than wages people think that they can count on,” Power said.
Technological advances have made mineral extraction more feasible in spots. But the increase in productivity has also reduced the number of employees neede. From 22 workers in 1970, the number needed to produce a thousand megatons dropped to six in 2004, rebounding slightly for unknown reasons to 10 now.
Because the mining job paid better than most of the alternatives laid-off miners are likely to find, they’re more likely to stay around the area and hope to be rehired, Power said.
“They hang on, hoping to be rehired,” he said. “Instead, what they see is more people being laid off.”
The economic benefits to mining are often least felt in the immediate area. Because of their high wages, miners can afford to live in more upscale areas. Often, they don’t want to live near the mine, where environmental degradation or the end of the mine can hurt property values. That potential for instability also discourages investment in local infrastructure, such as schools.
Power didn’t call for an end to mining, but said residents should apply the same kind of cost-benefit thinking mining companies use when they approach projects.
“We have to make choices, and we have to make choices because there are costs as well as benefits,” he said. “What citizens have to do, from a public interest point of view, is to weigh the clear economic benefits associated with mining, but also recognize the potential cost to the community, then make their decision and urge their representatives in government to do the same thing.”
William Keith of Houghton said he hadn’t known miners would commute so far for work.
“I thought it was an engaging presentation,” he said.
Full report available at http://www.folkminingeducation.info/wp-content/uploads/2013/07/Minings-Economic-Impact-on-Western-UP1.pdf
-by Laura Gauger, Legal Affairs Coordinator, Wisconsin Resources Protection Council, October 30, 2013
Back in 2007 the Wisconsin Resources Protection Council (WRPC; Tomahawk, Wisconsin) embarked on a mission to hold Flambeau Mining Company (FMC) accountable for water pollution problems caused by the company’s Flambeau Mine near Ladysmith, Wisconsin. FMC, at one time managed by Kennecott Minerals (Salt Lake City, Utah) is a wholly owned subsidiary of Rio Tinto (London, UK).
This project was never just about us here in Wisconsin … it was about trying to help clean water advocates in the entire Great Lakes region and beyond protect their own waters from adverse impacts linked to sulfide mining operations.
As you know, the mining industry has held up the Flambeau Mine to YOU, the people of Minnesota, Michigan, Wisconsin, Alaska and who knows where else around the world as an example of “environmentally responsible mining” in efforts to convince you to “let them in” and mine in YOUR communities. Our lawsuit was meant to bring out the facts about the serious pollution problems at the Flambeau Mine site and thereby debunk the myth of the “environmentally responsible” Flambeau Mine and give you ammunition to use in your own battles.
We scored a partial victory in 2012, when we took FMC to federal court over violations of the Clean Water Act and the U.S. District Court for the Western District of Wisconsin ruled, among other things, that the company had indeed violated the Act on numerous counts at the Flambeau Mine site.
Unfortunately, however, FMC appealed the decision, and the U.S. Court of Appeals for the Seventh Circuit proceeded to let the mining company “off the hook.” The Court remained silent on whether or not FMC had violated the Clean Water Act. Instead, they ruled that the mining permit issued to FMC by the State of Wisconsin “shielded” the company from prosecution and that we therefore could not enforce the Clean Water Act against FMC (even though the company had indeed violated the Act, as determined by the U.S. District Court).
In the process, no one was held accountable for the fact that the Flambeau Mine has polluted a tributary of the Flambeau River to the point where theWisconsin Department of Natural Resources (DNR) has recommended to the United States Environmental Protection Agency (EPA) that the stream be listed as “impaired” for copper and zinc toxicity linked to the mining operation. And absolutely NOTHING has been done about the high levels of toxins (most notably manganese) in the groundwater at the mine site. You see, groundwater pollution at mine sites in Wisconsin has been legalized by the Wisconsin DNR and State Legislature (see NR 182.075, Wisconsin Administrative Code), so we could not argue that point in either state or federal court.
The latest twist is that FMC, owned by one of the wealthiest multinational mining corporations in the world (Rio Tinto), is “going after” WRPC, Laura Gauger and their fellow plaintiff (Center for Biological Diversity; Tucson, Arizona) to recover various “costs” the company accrued in the lawsuit … to the tune of $157,000.
Our lawyers are fighting the dollar amount demanded by FMC, but it appears we will be required to pay FMC/Rio Tinto many thousands of dollars.
Oct. 9, 2013
The end of this month, Oct. 28, marks the 10th anniversary of the historic victory over the controversial Crandon mine project adjacent to the Mole Lake Sokaogon Chippewa Reservation.
Veterans of that 28-year (1975-2003) battle against the Crandon metallic sulfide mine will gather on the Mole Lake Reservation on Oct. 26 to commemorate the grass-roots environmental, sportfishing and tribal victory over the world’s largest energy company (Exxon) and the world’s largest mining company (BHP Billiton).
Situated at the headwaters of the Wolf River, the proposed underground shaft mine was one mile upstream from the tribe’s wild rice beds, five miles from the Forest County Potawatomi Reservation, and 40 miles (via the Wolf River) upstream of the Menominee Nation. The mine would have destroyed Mole Lake’s wild rice beds and threatened the tourism industry downstream on the Wolf River.
In the end, the Mole Lake Chippewa and the Forest County Potawatomi tribes purchased and divided the 5,000-acre Crandon mine property for $16.5 million. Mole Lake acquired the Nicolet Minerals Co., and quickly dropped mine permit applications. The land is now managed as a conservation area devoted to sustainable land-management practices, tribal cultural values and tourism suitable to this environmentally sensitive area.
The international mining industry was shocked when a broad multiracial, rural-based grassroots alliance defeated the world’s largest mining corporation. How could such a movement overcome the superior financial resources, and political access to decision-makers in the Wisconsin Legislature, governor’s office and the Department of Natural Resources?
Dale Alberts, president of Nicolet Minerals, a subsidiary of BHP Billliton, acknowledged that “a major problem in the beginning was the company did a poor job communicating to the local people. Environmental groups got out ahead and frightened people.”
But what really frightened people was the prospect of acidic mine waste piles 90 feet deep and covering 355 acres at the headwaters of the pristine Wolf. Native and non-Native groups mistrusted the DNR to defend their rights and found that tribal environmental regulations were stronger than state laws in protecting the Wolf River’s tourism economy.
After the Crandon defeat, the mining industry urgently discussed the need for a “social license to operate” where the mining companies work to win broad social support for their extractive activities. The failure to obtain such a social license raises the political and financial risks of a project and can often lead to the defeat of a mining project by widespread community opposition.
This is exactly what happened at Crandon and what is now taking place in the Bad River watershed where Gogebic Taconite has proposed a mountaintop removal operation to create the largest open pit iron mine in the world upstream from the largest remaining wild rice wetland in the entire Great Lakes basin on the Bad River Ojibwe Reservation.
GTac has followed Exxon’s strategy by using its financial and political power with the governor and the Legislature to write its own mining law, severely limiting citizen and tribal participation in the permitting process, and militarizing the mine site by deploying masked security guards with automatic weapons to intimidate the public.
The most recent public opinion survey from the University of Wisconsin-Superior shows that nearly two-thirds of the people in a random poll in Iron and Ashland counties oppose the mine project.
From the perspective of the mining industry’s own standards for a viable mine project, this project is dead in the water.
Al Gedicks of La Crosse is executive secretary of the Wisconsin Resources Protection Council. Dave Blouin of Madison is the Mining Committee chair of the Sierra Club-John Muir Chapter.
Both Loman and Alexandra Thebert, executive director of Save the Wild U.P. agreed that “the decision to file the notice to sue was done after great circumspection and careful review of what is occurring at the Eagle Mine.”
“We seek to correct what is nothing short of a regulatory fiasco at the Eagle Mine. This is just the first step in a multifaceted plan to do that in full measure — we are also calling for a federal investigation of the relationship between State of Michigan regulators and the mining industry,” said Thebert.
“In order to protect our communities and environment, we must ensure that regulations are followed,” said Margaret Comfort, Save the Wild U.P. president. “Rio Tinto — and other mining companies — cannot operate outside the law.”
The 60-Day Notice to Sue was sent by certified mail Monday, June 24 at 2:00 p.m. EST. The notice went to the Acting Administrator of the EPA in Washington D.C., the EPA Region 5 Administrator in Chicago, the U.S. Attorney General, the Governor of Michigan, and Rio Tinto’s Eagle Mine President Adam Burley.
“The citizens of Michigan have consistently been denied access to information with regard to this so-called non-profit. Today we are pulling back the veil of secrecy,” explained attorney Jana Mathieu, who filed requests for information related to NMGRA which went unanswered.
Jeffery Loman, KBIC tribal member and former federal oil regulator, led the group on a walking tour of a large cinder block warehouse building located nearby, identified by signage as a “State Warehouse.” The property is actually leased by the nonprofit Northern Michigan Geologic Repository Association, and serves as its core shed, housing valuable core samples. Local workers report seeing only Rio TInto vehicles accessing the warehouse.
“This core shed symbolizes Rio Tinto’s end-run around Part 632, the legislation governing non-ferrous mining in Michigan,” said Loman.
“Something smells bad here. Why create a private non-profit to perform a function of the State of Michigan? The circumstances surrounding these dealings between State officials and mining companies look like a bad rash on this administration,” said Loman. “Sunshine is the best disinfectant. Hopefully Governor Snyder will agree.”
“This is a barrel of rotten apples,” said Mary Ellen Krieg, resident of Big Bay.
“As things stand, there’s no plan for any independent review of the quantity, content and grade of the ore removed at Eagle Mine. Essentially, that means the State is allowing Rio Tinto to self-report its income which serves as the bases for the taxes due the State. The DEQ’s Hal Fitch will just take Rio Tinto’s word for it, and in turn, Hal Fitch wants every taxpayer in Michigan to take his word for it,” explained Michelle Halley, an attorney based in Marquette.
“Great place for hiding something. It looks totally neglected. Here’s this big building covered with peeling paint, surrounded by invasive knapweed and erosion gullies — anyone driving by would assume it was a giant meth lab, not a top-secret core shed set up by mining executives and controlled by the Michigan DEQ,” says Gene Champagne of Concerned Citizens of Big Bay, a grassroots group which has been active in monitoring regulatory oversight of Part 632, the legislation governing non-ferrous mining in Michigan. “The more you look into this, the more it looks like either incompetence or fraud or even both.”
“There are serious concerns about the connections between the mining industry and the regulatory role of the state,” agrees Alexandra Thebert, Executive Director of Save the Wild U.P. “In the best interest of all Michiganders, we are calling for the Department of Justice to investigate.”
Save the Wild U.P. is a grassroots environmental organization dedicated to the preservation of the Upper Peninsula’s unique cultural and natural resources.
As Rio Tinto continues another round of community forums, local citizens voiced their skepticism surrounding Marquette’s Rio Tinto Eagle Mine Community Forum Tuesday.
“Rio Tinto portrays this data as scientific — but that could not be farther from the truth,” said Kathleen Heideman, vice president of Save the Wild U.P. “Their ‘data’ from the last round polled less than 300 people– hardly representative of the 76,502 residents of Marquette and Baraga counties. It’s a global mining corporation’s idea of democracy: first they show slides about how great they are — then we should click to indicate our agreement. That’s meaningless. It’s not voting.”
“I am surprised to see the addition of 30 miles of power lines referred to as ‘more wood on the woodpile,’” said Margaret Comfort, president of Save the Wild U.P. “Rio Tinto manipulated the public process by saying they needed 30 miles of power lines for mining exploration and then sought a small modification to their Eagle permit to bring the lines to the mine site. It might be illegal, and it’s definitely unethical. They should have had their Eagle Mine permit modified, which would have included public scrutiny to discover if the public approved of this action.”
“Rio Tinto touted 75 visitors to Eagle Rock as demonstration of their willingness to work with Native Nations. But we know full well that Rio Tinto placed the mine portal into Eagle Rock for one reason and one reason only: They knew that this would draw the attention away from what all Upper Peninsula residents value — water,” said KBIC tribal member and former federal oil regulator Jeffery Loman. “That worked yesterday but from this day forward we will, as guided by our Great Spirits, bring the attention squarely back to the protection of our waters and everything that depends on water.”
“Rio Tinto representatives announced the life of the mine has been extended to 8 years by discovering a 20 per cent increase in ore, but that’s no career for the people working in the area. The U.P. needs and deserves stable jobs to support families and send kids to college, not layoffs and short-term work,” said Alexandra Thebert, executive director of Save the Wild U.P. In early April, Eagle Mine announced the layoffs of 11 employees and downsized contractors by 20 per cent citing “economic headwinds.”
In April, SWUP Executive Director, Alexandra Thebert, traveled to London as part of of a campaign to bring community concerns to Rio Tinto’s Annual General Meeting. Below are her comments before the board, and a response from Rio Tinto CEO Sam Walsh.
Alexandra Thebert: Thank you, Chairman, for the opportunity to speak today. My question is concerning the Eagle Mine project in the Upper Peninsula of Michigan in America.
Our community has been fighting Eagle Mine since the project began nearly a decade ago, which you know because we have sent representatives to your London shareholders meeting for years to address your shoddy environmental protections, sloppy work, and poor work standards.
Mining engineers have said, for years, that this permit was fraudulently issued and the structure of this portal is unsound. I’d like to add that, too, that this located which is located directly underneath sacred land to the native people of this region, who have been living in the area far longer than than 140 years.
As a sulfide mine, Eagle Mine threatens nearby Lake Superior and other major watersheds– comprising over 20% of the world’s freshwater. There is no precedent for a similar mine that does not leak acid drainage. You know this because of your own Flambeau Mine in Wisconsin where your lawyers are appealing a Clean Water Act Violation next week. I’m coming to my question, thank you [in response to heckling].
With the recent reporting of uranium at the site, former federal oil regulator Jeffery Loman states the risks have now increased exponentially, potentially endangering the workers, community, and environment to radiation and radon exposure.
Further, you seek to remove your only air filter from your mine portal– added in response to community outrage upon discovering that unfiltered mine exhaust would be sent directly into our community.
Over 10,000 people oppose this mine in our small and rural community, including hundreds of health professionals and over 100 faith leaders. Your have an expensive and risky project, and we are a very expensive, and growing opposition to your mine as we are fighting to protect our health and environment. We do not plan to stop pursuing you. We will not going to stop suing you until you have left our community — intact.
My question for you is – at what cost to our health and environment to do you plan to continue this project for so-called “value” for your shareholders? Thank you.
Chair Jan du Plessis: Thank you for those remarks, I think most of those remarks have been made at last years and previous years AGM’s so I think, while I respect the fact that you needed to make them but of course they aren’t particularly new. Sam, would you like to respond?
CEO Sam Walsh: I can comment in relation to that project which, by the way, has state and federal environmental approvals. The mine operates or the project operates at the highest standards of environmental management and also community engagement. It’s been awarded all of the necessary permits to build and operate the project as originally designed and these permits have been upheld in court.
In 2012 Eagle filled a new air permit application in which we reduced allowable emissions by 80%. And also in 2012 the Eagle partnered with 2 world-known community organizations to implement an independent community monitory program with the Marquette Community Foundation and the Superior Watershed Partnership.
The state regulatory body requires that the company requests an air permit change if there’s any change in the quantity, quality, or composition of emissions, regardless of whether that’s an increase or decrease.
In relation to your comments about uranium, uranium is in fact naturally found. It’s found in very small percentages and this is being tightly controlled by the company.
In relation to Eagle Rock, your comments about that, that is an area that we are preserving. Quite clearly we are preserving the rock outcrop that remains in its natural state and during the last 12 months, we’ve had 50 individuals or groups visit that and we provide free access to that for visits by the tribal members.
I believe we are meeting all standards. I believe we are meeting the requirements. I note your comments.