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A new federal study says the state’s largest mine likely caused reduced caribou and beluga harvests by nearby villagers.

The harvests in the subsistence-dependent village of Kivalina declined substantially after the Red Dog zinc and lead mine opened 20 years ago, the Environmental Protection Agency said in the draft report on the mine’s impact on the environment.

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Pass the Fish and Chips

China Hungry for Bigger Helping of Rio Tinto

By Gabriel Caplett

London-based Rio Tinto’s CEO Tom Albanese may have to bone up on his Mandarin if emergency talks with the Chinese government-owned aluminum giant, Chinalco, produce an expected US $8 to $9 billion in asset sales. The deal would give China 15% ownership in the company and allow continued access to base metals, such as iron ore, primarily used to make steel, an essential ingredient allowing the country to expand its infrastructure. According to the London Guardian, the deal would “further reflect the shift in power between recession-struck developed countries and faster-growing Asian economies.”

China is already Rio Tinto’s largest shareholder, having purchased a roughly 9% stake in the company early in 2008, amid concerns over losing future bargaining power in iron ore pricing negotiations if the world’s largest mining company, BHP-Billiton, were to purchase Rio Tinto. Throughout BHP’s failed $142 billion takeover bid, Chinalco denied reports that it would pursue a larger stake in Rio Tinto.

The current talks are seen as a last ditch effort before debt-laden Rio Tinto is forced to begin raising cash by issuing new shares and requesting current shareholders to invest further in the company. Last week, Rio Tinto was able to offload its Brazilian iron ore and Argentine potash assets to the Vale Mining company for $1.6 billion. In December, Rio Tinto announced that it would layoff at least 14,000 workers, worldwide, due to decreasing global demand for most metals. The company has already scaled-back its plans for major expansions in Africa, South America and Australia.

Until recently, Rio Tinto’s value was skyrocketing due to increased demand from developing nations China and India. According to Rio Tinto China’s Managing Director, Anthony Loo, from 2000 to 2006 the company’s sales to China increased nearly 10-fold.

The US has continued to follow this trend by providing the world economy, not with manufactured products, but raw materials, such as grains, iron ore and timber. The result has been that the US sells China its steel, nickel, copper, palladium and other metals and China, in turn, builds infrastructure and its military while exporting a higher-value manufactured product back to the US, creating an enormous trade deficit with China.

The Lake Superior region is seen as a potential major source of raw material to growing overseas economies. Don Fosnacht, director for the Center for Applied Research and Technology Development at the Natural Resources Research Institute said, “There are real opportunities for Minnesota to be a supplier of raw materials to China in both the ferrous and nonferrous areas.”

While the situation has proven profitable, at least in the short-term, for mining companies and their shareholders, the effects on working class Americans has been devastating.

From 1989 to 2003, at least 1.5 million US jobs were displaced due to the growing trade deficit with China, with the pace of job loss more than doubling following China’s entry into the World Trade Organization, in 2001. The State of Michigan was among the nation’s top ten losers. By 2005, long before the current global recession, the state lost at least 50,991 jobs as a direct result of this trade relationship. According to the American Manufacturing Trade Action Coalition, Michigan has lost at least 315,000 manufacturing jobs, while dropping nearly 500,000 total jobs, since 2000.

The economic consequences can be dire. Due to the increasing mechanization of mining operations, workers are getting phased-out at the same time that metals production has increased dramatically. Even in the Iron Range counties of Minnesota, mining jobs now account for only 5% of total personal income. According to the US Department of Labor, this increased mechanization will be largely responsible for an estimated loss of 10,000 mining jobs by 2016.

Yet, in a proverbial yang to the workers’ yin, business may continue to grow, long-term, for China and Rio Tinto. In 2003, then-Chairman Robert Wilson said, “China’s growth, with its heavy emphasis on infrastructure development, has become a major influence in the market for many of our products…China’s consumption of metal has been growing by more than 10 percent annually and rapid growth seems likely to continue.”

In 2007, Rio Tinto’s chairman, Paul Skinner, noted, “Growth in China, which is critical to the demand outlook for many of our products, remains strong and well-balanced.”

According to the Michigan Economic Development Corporation, the only economic sectors that continue to grow, in the state, are in alternative energy, healthcare and information technology. Indeed, many economists are urging a transition from industrial, extractive-based economic systems, to sustainable models based upon clean water and land resources. A recent Michigan State University economic study shows that Pictured Rocks National Lakeshore, alone, contributes at least $20 million, annually, to the local economy. A 2007 Brookings Institute and University of Michigan report has concluded that a $26 billion dollar investment in Great Lakes restoration would yield at least $50 billion in regional long-term economic benefits and an additional $30 billion to $50 billion in short-term economic activity.

Meanwhile, back in London, Rio Tinto CEO Albanese will likely continue looking to China in order to increase profits for his flock of shareholders. That is, if he stays with the company. Albanese is, reportedly, quite close to Rio Tinto’s chairman, Paul Skinner, who has been replaced by Jim Leng, from India’s Tata Steel, after losing the confidence of company shareholders following the extravagant $38 billion purchase of Alcan, in 2007, and collapse of the company in 2008. The Financial Times has reported that oil giant BP may not want Skinner either.

Marquette County, Michigan – New information has surfaced suggesting that the Michigan Department of Environmental Quality (DEQ) assisted Kennecott-Rio Tinto by forgoing proper procedure in allowing the company to reconstruct a road crossing in Fall of 2004. With Kennecott’s persistence, the DEQ approved an ill-designed plan to install a new culvert on the Triple A Road where a branch of the Salmon Trout River flows. Kennecott was contracting with Pete O’Dovero, of Associated Contractors, to rehabilitate the road crossing.

Read the Entire Article by Gabriel Caplett at Northwoodswild.org