Northland emerges as prospector's paradise
The DNR opens mining bids across the Northland today as
companies broaden their search for gold, platinum and copper.
Geologists have known for decades that there’s plenty of copper,
nickel, gold and other minerals under northern Minnesota
forests, but most of it wasn’t considered worth the cost to dig
it up.
Until now.
Today the Minnesota Department of Natural Resources will open
bids submitted by mining companies that want to prospect for
minerals on state lands — including some just outside Duluth.
The highest bidders will win exclusive rights to search for and
potentially mine on the land for 50 years. The state gets a
small annual lease fee during exploration and, if the company
strikes paydirt, the state gets a lucrative royalty on every ton
of mineral mined.
“I suspect we’ll see some interest,” said Ernie Lehman, the
grandfather of Minnesota minerals exploration. Around the world,
“northern Minnesota has become a focus for mineral interests.’’
Boosting the region’s image among mining companies is the
progress the PolyMet copper-mining project is making through the
environmental review process, Lehman said.
“Investor interest in northern Minnesota is increasing as people
see that it’s more likely we can do business here,’’ he said.
Vermilion Gold, one firm Lehman is associated with, has
submitted a bid to look for gold under state land just west of
the Iron Range. “We’re looking at areas where some exploration
in the early ’80s showed quite a bit of potential for gold,” he
said.
The DNR leases offered this time are in St. Louis, Carlton,
Itasca, Pine, Morrison and Benton counties — outside the
“Duluth’’ geological complex near the Iron Range where copper
and other deposits already have been confirmed.
The new lease areas include much of the region around Island
Lake Reservoir north of Duluth and state land just west of Grand
Lake outside Duluth. Other large parcels are in southwest
Carlton County, not far from where Kennecott Mining discovered
copper in Aitkin County, and in northeastern Itasca County in
the Togo area.
Annual sales
About once each year the DNR holds silent auctions for mineral
exploration rights on state lands. The federal government does
the same thing on national forest lands in the area.
Both state and federal agencies have been busy offering leases
on the east end of the Iron Range near Ely, Babbitt and Hoyt
Lakes, where the proposed PolyMet mine is now under
environmental review. Dozens of test mine shafts have been
drilled on DNR and Forest Service lands in recent years in that
area as prospecting companies search for deposits that might be
affordable to dig.
Now, the DNR is betting that improved exploration and retrieval
technology and — especially — improving prices for copper and
other metals will lead to more interest across new areas.
“We put out a request for nominations on possible parcels last
fall … and the interest we received resulted in some of the
areas you see’’ in today’s auction, said Marty Vadis, who heads
the DNR’s division of Lands and Minerals.
It’s not clear if minable deposits will be found on any of the
parcels, and any actual mining probably would be a decade or
more away. But several mining companies appear ready to take the
chance, pay the lease fees and hope they find enough minerals to
make it worth mining.
“Part of it is that we think we’re getting better at finding’’
precious metals in new areas, Lehman said. “But the driving
factor is the prices we’re seeing.”
Gold is at an all-time high price of more than $1,100 an ounce.
Copper, which had fallen as low as $1.20 a pound last year, has
rebounded to more than $3.40. Platinum, which sat at $400 an
ounce in 2002, has skyrocketed to about $1,500 an ounce.
Opponents say non-iron mining is much riskier for the region’s
environment because the minerals are often found in rock with
high sulfur content. When exposed to air and water, that rock
can cause sulfuric acid runoff that can leach heavy metals into
local waterways. They also note that many Minnesotans don’t want
to see new areas opened to a plethora of mines across northern
Minnesota.
Supporters of copper mines note they would help diversify the
region’s economy. The PolyMet project, for example, is projected
to employ about 400 people for the 20-year life of the mine.
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