First of 2 parts | Part 2
BIG BAY — In Michigan’s Upper Peninsula, it’s drill, baby, drill.
The drilling that began there in September is not for oil, but for gold, silver, copper and nickel.
In a resurgence of mining in the region whose mineral heyday was more than a century ago, foreign companies are finding rich bodies of ore they hope to mine for billions of dollars.
New technology and higher prices for metals are making mining profitable again, spurred by increases in demand for high-tech gadgets such as smartphones, kitchens full of stainless steel appliances and hybrid cars — all of which use the metals that can be found in the U.P.
Three new mines are either under way or planned, with more possible. Also, an abandoned mill to process ore is expected to reopen. Mineral rights on more than 1 million of the U.P.’s 7 million acres have been leased by companies prospecting for metals.
The new mines are less than a football field away from streams, rivers or Lake Superior, and environmental groups say the risks of contamination from acidic rock waste are high and that the state has too few resources to be a proper watchdog.
“I’m not anti-mine, I’m anti-mining pollution,” said Marla Tuinstra, a writer and retired dairy farmer near Stephenson, where an open pit gold mine is planned.
For struggling towns hungry for tax revenue and jobs, the mines are an answer to their prayers.
John Cox is supervisor of Wakefield Township, where a new copper mine is planned not far from the White Pine Mine, which closed 15 years ago.
“This is the best news we’ve had for years,” he said.
Rush is on as mining firms scour U.P. for deposits
Coming Monday: Is the state making enough money from these mines?
BIG BAY — The scream of hydraulic drills against bare rock echoes through the underground tunnel in the Eagle Mine. Dark figures are silhouetted against daylight at the tunnel’s entrance.
For international mining giant Rio Tinto, that light is symbolic: It’s the end of a 10-year push to start the mine — the nation’s first primary nickel mine and the first new mine in the Upper Peninsula in decades.
With its tunnel growing deeper at the rate of 12 feet per day, a Lansing judge on Wednesday cleared the mine’s path completely, dismissing a lawsuit that challenged its permits.
Other mining firms see Eagle’s start as a signal to push forward. Orvana Minerals, based in Toronto, has submitted a permit application for Copperwood, an underground copper mine near Wakefield in the U.P. And a third firm is preparing its application for Back Forty, an open pit gold, zinc and copper mine near Stephenson.
The rush is on.
Search for minerals
Websites of companies exploring for minerals show maps of the U.P. dotted with drilling targets. “Great Lakes: unparalleled potential,” says the map from Aquila Resources, a company listed on the Toronto stock exchange that discovered gold and copper in Menominee County. Its map shows four other sites it is targeting in the U.P.
Kennecott Eagle Minerals, the Rio Tinto subsidiary that discovered the rich copper-nickel deposit near Big Bay in 2002, said it’s continuing intensive exploration in the central and western U.P. Prime Meridian Resources of Calgary, Alberta, is hunting for copper, gold and nickel.
Bitterroot Resources of Vancouver, British Columbia, says it has mineral rights across 363 square miles in the U.P. and is scouting copper, nickel and platinum. Other firms have told the state they’re seeking uranium.
It’s not just Michigan: Companies also are planning mines in Ontario, Wisconsin and Minnesota.
“It’s like looking for elephants,” said Ted Bornhorst, professor of economic and engineering geology at Michigan Technological University in Houghton. “If you see one, you may find more.”
The state, excited about the prospect of new mining in the U.P., has set up an interdepartmental team to deal with issues surrounding mines.
“We see this as major economic development needed in the U.P.,” said Dan Wyant, director of the Department of Environmental Quality.
He said the state expects to see more than the three mines already proposed.
“The governor is very open to this, as long as we can make sure the companies meet requirements for air and water quality,” Wyant said.
He noted that new technology has changed mining. “It’s a different day and a different time,” he said.
All three companies said they will have modern water treatment plants that will make water discharged from the mining process cleaner than rain, which has contaminants deposited from air pollution. State law requires the new mine sites to be restored, with the buildings gone, pits and tunnels filled and flooded, and trees and shrubs planted when the mine shuts down.
Environmental concerns
Environmental groups and some residents of the towns near the new mines are worried about noise, truck traffic, new roads, new power lines and contaminated air and water. The new mines are in sulfide rock; its tailings contain sulfur that can create sulfuric acid when exposed to air and moisture. Critics say the state has suffered such deep budget cuts that it doesn’t have the funds or staff to do a good job protecting the environment. They also say the DEQ has become a booster rather than a watchdog over mines.
The Eagle Mine will be beneath the Salmon Trout River, which flows into Lake Superior; Back Forty is a few hundred feet from the Menominee River, and the Copperwood Mine is 200 feet from Lake Superior. Hunting, fishing, canoeing and hiking are popular in all three areas, and groups such as Save the Wild UP are concerned they’ll be contaminated by mine drainage.
The DEQ’s staff and budget have been gutted in recent years, said Kristi Mills, director of Save the Wild UP. The DEQ has only two staff members in the U.P. to oversee two existing iron mines, the three future mines and exploratory drilling.
Former director Steve Chester told the Free Press in 2010 that the agency’s general fund budget was cut 75% between 2003 and 2010.
Wyant said some staff in Lansing also work on mine issues, and that its resources are sufficient.
But Michelle Halley, an attorney for the National Wildlife Federation, which has challenged the Eagle permits in court, said the new mines, both in Michigan and elsewhere, will affect water quality in the Great Lakes Basin, not just the U.P.
She also said Michigan’s mining law places no restrictions on where mining can occur. “Every square inch is open.”
Bringing in the jobs
Mills of Save the Wild UP said the issue right now is jobs.
“It’s bad timing,” she said.
Not only does Rio Tinto intend to hire 300 people at Eagle, it also plans to reopen a mill to process its rock, and possibly that of other future mines. The Humboldt Mill hasn’t operated since 1989 and it, too, will bring jobs.
Dan Hornbogen is one of eight generations that lives, or have lived, in Marquette. He has served on an advisory committee to the company and is among the mine’s avid supporters.
“There are no guarantees, but these people know what they’re doing,” he said.
Jon Saari of the Upper Peninsula Environmental Coalition doubts the mine can avoid polluting air and water.
“There is human hubris here,” he said.
A coalition of environmental groups and the Keweenaw Bay Indian Community had argued in court documents that a long list of problems with the Eagle Mine should have led the state to reject its permits, including a potentially unstable roof and environmental studies that were flawed or not done. The judge in the case disagreed and dismissed their lawsuit.
On a tour of the mine site, Kristin Mariuzza, environmental manager of the mine, points out the multiple water treatment systems proudly. A former DEQ employee and U.P. native, she said the $10-million system will make water from the mine site cleaner than what most people drink.
“We treat it more,” she said. The water must be clean enough to protect fish in nearby streams under state law.
Mine president Adam Burley said because Eagle is the first new mine in the U.P. in decades, he wants to make it a model for others. “We’re raising the bar,” he said.
A crown jewel?
HudBay Minerals of Toronto and partner Aquila Resources call their planned Back Forty Mine a “crown jewel,” with nearly 1 million ounces of gold and 1 billion pounds of copper, as well as other metals.
To Ron and Carol Henriksen, it’s no jewel. The couple created their retirement dream home on 6 acres along the shores of the Menominee River west of Stephenson. But after mining rigs began drilling exploratory holes down the road, they decided to sell to the mining company and have yet to find a new home.
Their property and many of those around it are marked with red anti-mine signs, and the Henriksens are active in Front 40, a group formed to encourage locals to ask tough questions about the Back Forty mine.
“If people understand the facts, they won’t be for it,” Ron Henriksen said.
The 250 jobs generated by the mine will last only nine years — the mine’s expected life — but the effects on hunting, fishing and recreational tourism could be long-lasting, Henriksen said.
“I don’t want my grandchildren saying to me, ‘Why did you let this happen?’ ” he said.
Some fear the mine will drive down property values. And the mine’s owners are Canadian companies, so even if 75% of jobs go to locals as promised, the profits will go back to Canada.
Cyanide will be used in the processing of the mine rock, and the Front 40 said it fears that could contaminate the Menominee River and create hazards when it’s transported to the site.
Mine spokesman Tom Shields said the cyanide will be used only in processing gold and silver and will be neutralized afterward.
Area residents have mixed opinions.
Jeff Anderson is a financial adviser and stock broker who has sold thousands of shares in HudBay. He sees it as a good investment, both for individuals and for the community, where he has lived for decades and is on the Downtown Development Authority board.
“What we have is an opportunity for higher economic development and better-paying jobs,” he said. Besides direct jobs, the mine is expected to create 220 support jobs, he said. “Higher wages and jobs could have a good impact,” he said.
He said he’s convinced, after a recent forum, that the DEQ will do a good job overseeing environmental risks.
Mick Lawler is project manager for HudBay. He said he’s confident the company can avoid the pollution opponents fear. The firm plans to build a concrete pillar between the mine and the river, treat water that is used in the mining process or falls on the site, and neutralize and bury rock waste in the mine pit, flooding it with water when the mine shuts down.
The company hopes to apply for a permit next June.
“I don’t know who to believe,” said Robin Leaveck, who works at her parents’ Stephenson Family Restaurant and grew up in the area. On one hand, the metals are needed for cars, electronic gadgets and wiring. On the other, “this is God’s country,” she said. “I hope they can do it without destroying it.”
‘Now we struggle’
Even with a rebirth in mining, the U.P. won’t see thousands of mining jobs from these projects. The numbers will be in the low hundreds at each mine, and the mines will be short-lived, open for at most a dozen years.
But the boost to small, hard-hit local economies will be impressive.
Wakefield Township Supervisor John Cox grew up in the area but left as a young man to get a good job and returned as a retiree.
“A lot of kids here have to leave like I did,” he said.
The proposed Copperwood Mine, which expects to get a state permit by next spring, will bring up to 250 jobs when it opens. “We’ve had unemployment over 10% for a long, long time,” and it’s even higher in neighboring Ontonagon, he said.
In the iron mining days, the area had swimming pools, community centers, good paved roads and other things small communities often don’t have. But those days ended when the White Pine Mine closed in 1995.
“Now we struggle,” he said.
Bornhorst, the Michigan Tech professor, said that because the U.S. is capable of protecting its environment, it should have mines that produce metals its citizens use, rather than sticking other countries with the risks.
“People don’t want copper mines in their backyard, but they’ll go down to Lowe’s to buy copper wire,” he said. “We’re the ones that use these metals the most. We should have the mines.”
Contact Tina Lam: 313-222-6421 or tlam@freepress.com
Part 2: Will mines get state’s riches for a paltry sum? by staff writer Tina Lam http://www.freep.com/article/20111128/NEWS05/111280328/Will-mines-get-state-s-riches-paltry-sum-?odyssey=tab|topnews|text|FRONTPAGE