Mining records: DNR document review #1

Public Record Media has been reviewing documents released under a 2013 Data Practices Act request to the Minnesota Department of Natural Resources (DNR).  The documents relate to several mining projects situated in the northern portions of the state, including traditional “ferrous” taconite operations, as well as proposals for “nonferrous” copper-sulfide mines.  The later form of mining involves the capture of trace minerals through a series of physical and chemical-related processes, and has yet to be implemented in Minnesota.

The DNR is responsible for the environmental review of Minnesota-based mining projects, in conjunction with several other state and federal agencies.  PRM’s DNR document cache contains thousands of pages of mining-related records, and the entire collection will eventually be posted in PRM’s document archive.

Scope of exploratory activity

DNR’s document release shows a large amount of exploratory drilling and other evaluative activity occurring in the state - some of which is tied to nonferrous mining exploration.

Proposed nonferrous projects include the highly-publicized NorthMet copper-sulfide operation, which is currently undergoing state and federal environmental review.  If approved, NorthMet would be the state’s first active nonferrous mine.  Several related projects are moving through more preliminary stages of development.

One such project is the proposed “Twin Metals” copper-sulfide mine that would be located close to the edge of the Boundary Waters Canoe Area Wilderness.  At present, Twin Metals Minnesota, LLC is conducting exploratory drilling and other actvities at several sites in the area.

Duluth Metals – which owns a 60% stake in Twin Metals – appears several times in the document release in conjunction with mineral lease applications.  A representative example is found in the company’s August, 2013 application for a nonferrous mineral lease in St. Louis County.  A letter accompanying the application notes that the area in question is “underexplored,” with the “potential for additional mineral deposits” over and above those found through previous drilling efforts.

State leasing of mineral rights

Leases for mineral rights on the state's public lands must be approved by Minnesota’s Executive Council – a body that consists of the Governor and other top state officials.

DNR documents show that the Executive Council approved 31 leases in October of 2013, despite opposition from environmental groups that sought EAWs (environmental assessment worksheets) prior to the lease sales. Records indicate that the Executive Council acted after the Minnesota Court of Appeals determined that EAWs were not necessary at the time of lease sales – only at later, project-specific stages.  This position was articulated in a “talking points” document, and a set of formal comments prepared for the Lieutenant Governor.

Saint Louis County mineral rights sought

Records indicate that Saint Louis County is a significant focus of new mining activity, with multiple companies applying for mineral leases in the area.  Applications include both Minnesota-based companies, as well as out-state enterprises such as Encampment Minerals of Atlanta, Georgia.  Encampment has submitted what DNR records characterize as “large requests" for mineral leases. These leases cover thousands of acres thought to contain iron oxide and copper sulfide deposits.

Some documents describe overlapping activity occurring on the same land parcels in Saint Louis County, with several mining companies vying for simultaneous access.  A November 2011 e-mail documents difficulties in the coordination of blasting and drilling activities within the so-called “Serpentine Deposit” located in the Ely-Hoyt Lakes area.  According to the e-mail, the site has both an active taconite lease held by Northshore Mining Company, as well as a nonferrous lease held by Encampment Minerals.

Mining lease transparency

Records show that at the October, 2013 Executive Council meeting, Governor Dayton asked DNR Commissioner Tom Landwehr to make more mining lease data available to the general public in an on-line format.  As PRM has previously reported, the agency subsequently created a web page to host such lease data, and launched the site in late 2013.  Several documents from the DNR cache relate the process of compiling and launching the site, including discussions about the classification status of the underlying data.

Disputes over tax figures

A number of DNR documents chronicle a dispute over clams made about the level of taxation that mining companies are subject to.

Records show that at the October 2013 Executive Council meeting, citizen testifier Bob Tammen claimed that Minnesota only received 3% in tax revenue from the state’s “5 billion dollar” mining industry.  Tammencited statistics drawn from a 2012 University of Minnesota study of the mining industry.

Tammen's comments triggered a number of disparate reactions after the meeting.  A November 22, 2013 e-mail from DNR’s Peter Clevenstine characterizes the figures cited by Tammen as “alarmingly low” and urges a review of state mining taxes at the December Executive Council meeting.

A Nov 1, 2013 letter from Philip Larson of Duluth Metals takes issue with the figures citied at the Executive Council meeting, and claims that they leave out substantial amounts of other taxes and royalties paid by mining companies.  Larson's letter notes that “rather than being grossly and unfairly subsidized, the iron ore industry carries more than its weight in contributing to our communities.”

NOTE - A previously published reference to the "Minnesota Supreme Court" has been corrected to read "Minnesota Court of Appels."  Modifications have also been made to further detail corporate relationships, and to further clarify certain described activities.  June 29, 2014.

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Matt Ehling

Public Record Media