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Events in 2006 helped move Minnesota much closer toward the start of a brand-new industry it has never had before on a systematic scale: Non-ferrous mining.
• PolyMet Mining ramped up its efforts for a copper-nickel, precious metals operation that might be starting by late 2008, if permits and all financing are in place.
• Franconia Minerals is about two years behind PolyMet in several sites near or at Birch Lake near Babbitt.
• And companies, stakeholders and other parties such as suppliers formed the MiningMinnesota Initiative late in 2006, setting up a Web site, MiningMinnesota.com, for information and education on the industry’s efforts.
“It’s new mining, it’s diversification of a mining sector that will bring additional, good-paying jobs to our communities,’’ said Frank Ongaro, a spokesperson for the initiative.
And 2006 has been crucial for PolyMet in the development of its project in starting up a non-ferrous operation on the Iron Range, with an ore deposit near Babbitt, and rail and most plant facilities in place already at the former LTV Mining taconite plant near Hoyt Lakes, said PolyMet Executive Vice President Warren Hudelson. “It’s been a milestone year.’’
With “a consolidation of favorable circumstances,’’ including very good markets and metals prices, and an aging but usable facility, PolyMet has become “one of a handful of projects in the world that can come online in a very short time,’’ he added.
The definitive feasibility study released in mid-September showing the project’s technological and economic provability “is really a crossroads for PolyMet,’’ he explained, adding, “we have taken the project to a pre-construction mode now.’’
A financing agreement in 2006 with BNP Paribas Bank of France, which has extensive experience financing mining projects worldwide, has put into place key elements of the project advancing.
Other agreements such as closing on the railroad facilities with Cleveland-Cliffs Inc., previous owner of the Cliffs Erie LLC property (LTV Mining), and with Minnesota Power for long-term electrical power completely supplying the project have moved it from more of a concept toward a reality in 2006.
Electrical power will be crucial in developing copper, which PolyMet expects to fully produce onsite, Hudelson said.
Next on the agenda is obtaining a permit to mine from the Minnesota Department of Natural Resources and air and water permits from the Minnesota Pollution Control Agency. “That is our major objective for 2007,’’ he said.
The timeline would be to complete environmental permitting in the second half of the year and to be producing metal by late 2008, he said.
PolyMet officials are not sitting during that time, and are also working on a project labor agreement with construction trade unions, so they can quickly transition to full-blown construction when permits are obtained, he said.
Copper units a meter square would be produced onsite, while nickel and cobalt, along with platinum, palladium and other metals, would be shipped as a solution to other facilities for further processing. About 1,000 construction jobs as well as 400 full-time plant jobs would be created. The old plant’s crushing and concentrating areas would be used, but a hydrometallurgical, closed-circuit leaching autoclave portion would need to be built.
The old LTV Mining plant and its brownfield lands nearby have been a big boost to the project, which is expected to cost $380 million. It would cost abut $1 billion without the plant and lands, Hudelson said.
According to longtime minerals explorer and developer Ernie Lehmann, an official with Franconia Metals and the Minnesota Exploration Society, the conditions for non-ferrous mining to happen in Minnesota have been “a lining up of the planets,’’ with surging demand for copper and nickel, prices not seen for a hundred years, and environmentally benign technological methods that have “caught up with our resource here,’’ which haven’t been easy enough to access until now, he explained.
The two projects also come at a time when the iron ore taconite is enjoying better times than at the start of the decade, when LTV Mining closed with the loss of 1,400 jobs to the Range and severe conditions forced some firms into bankruptcy.
Between PolyMet and Franconia’s potential start-up, there is “a great opportunity to replace many of the jobs that have been lost in the taconite industry in the last years,’’ Lehmann noted. The two projects in terms of full-time permanent jobs would almost equal the lost LTV jobs, he added.
He estimated Franconia, which has run drilling test campaigns near Birch Lake the past few years, to be about two years behind PolyMet in development.
Franconia has very good community and investor support, and they hope to begin permitting in 2008. They expect to be out on a barge on Birch Lake drilling again this summer, to accumulate bulk samples for pilot plant testing, for a major metals campaign later in the year, Lehmann said.
Franconia has two deposits, about 1,600-2,400 feet under, from the north shore to two-thirds of a mile south of Birch Lake, and then another about four miles north of the lake, on the edge of the Duluth Complex.
Acquiring permits would be looked at completion by 2009, with construction also starting and going for about two years, with operations starting by 2011, according to the timeline; about 550 workers would have full-time jobs, with other industry-related jobs starting, and 600 construction jobs being created also, he said.
2007 “should be a breakthrough year, seeing non-ferrous mining move toward reality in Minnesota,’’ Ongaro summarized. |
