Wisconsin DNR: Mining bill could cost agency millions

Details of the proposed Mining Bill: AB426 Summary CleanWisconsin 2011(1)

THE ASSOCIATED PRESS

Posted Jan 09, 2012 @ 08:00 AM

MADISON, Wis. — A Republican bill designed to kick-start an iron mine in far northwestern Wisconsin could mean additional costs for the state Department of Natural Resources ranging from $550,000 to $3.8 million per year, according to a DNR analysis.

The 183-page bill would make a number of broad changes, including placing time limits on the DNR to approve or deny an iron-mine application. It also caps at $1.1 million the amount that a mining company could be asked to reimburse the DNR for costs associated with the application approval process.

Those factors could lead to higher expenses and lower revenue, the agency found.

The DNR conducted a fiscal analysis to estimate the financial impact of the legislation. While acknowledging the analysis was based on assumptions and uncertainties, the agency concluded that its overall costs could increase by millions of dollars per year.

Most of the expenses are associated with reviewing mine permits, a process that involves studying the effects a mine could have on air, water and threatened species. The analysis did not include long-term costs, such as oversight while the mine is in use and monitoring after the mine is closed.

The analysis broke costs down into the following three categories:.

— Pre-application and permitting costs: $150,000 to $800,000 per year.

— DNR staff costs: $50,000 to $300,000 per year.

— Environmental-impact studies performed by a contractor: $350,000 to $2.7 million per year.

The legislation stems from Gogebic Taconite’s plans for an iron mine in the Penokee Hills just south of Lake Superior.

Supporters insist the mine will be an economic boon, creating hundreds of good-paying jobs that will re-energize the impoverished region. However, environmentalists and tribal leaders worry the mine will contaminate one of the most pristine regions in the state.

The first phase of Gogebic Taconite’s plans calls for mining a 4-1/2 mile stretch of the hills near Mellen, a city of about 900 people just south of the reservation for the Bad River Band of Lake Superior. Company officials say that phase likely will last at least 35 years, generating about $1.4 billion in state and local tax revenue, creating 700 jobs for people in the area and 2,000 ancillary jobs for the region’s service and transportation industries.

Conservationists say the mine would pollute one of the areas. The Bad River in particular fear the mine would contaminate the sensitive sloughs where they hold their traditional rice harvests.

Company officials have suspended their plans, though, saying they want assurances from legislators of a definite end point in the state Department of Natural Resources mine permitting process, which can take years to complete. Republican lawmakers, who see the mine as a tangible way to deliver on campaign promises to create jobs, spent most of the last year working on a bill.