Company would spend $1 billion on project
Nov. 17, 2010
By Lee Bergquist
of the Journal Sentinel
An affiliate of a privately held coal-mining company is proposing to spend more than $1 billion to develop a large open-pit iron ore mine on an ancient mountain range in far northern Wisconsin.
Gogebic Taconite has purchased an option to lease the mineral rights on 22,000 acres covering 22 miles, near Mellen and Upson in Ashland and Iron counties. The Company is a subsidiary of the Cline Group, which controls large coal reserves in Illinois and parts of the Appalachian region. The project is still years from starting. While supporters will trumpet the mine's economic benefits,
It is sure to raise environmental concerns, especially potential threats to the Bad River and Lake Superior. Gogebic Taconite will need approval from the Wisconsin Department of Natural Resources and other agencies. "Clearly there is going to be a protracted permit process," said state Sen. Robert Jauch (D-Poplar), who has met with representatives of Gogebic and said it's premature to pass judgment on the project. "The message I gave . . . is that they need to reach out to those that might have a critical view of the project, as well as those who think it will be positive," Gauche said. "I think that people are watching this with very deep concern." The managing director of the Cline Group, Matthew Fifield, said the regulatory process alone could take five to seven years, adding that the state's rigorous process will ensure that natural resources are protected. The company is negotiating with officials in Iron County for access to county forest land for non-mining uses, such as roads and buildings.
The next regulatory step: Gogebic expects to file documents known as a notice of intent with the DNR in 2011, which will provide information about the project before applying for a permit, Fifield said. Hundreds of jobs possible If the mine becomes a reality, the project would be the first in Wisconsin since the operation of the Flambeau copper mine, from 1991 to 1997, near Ladysmith, according to the DNR. The mine would employ hundreds of workers. Fifield said comparable operations in Minnesota and Michigan employ at least 600 workers with annual salaries of at least $50,000.
The large pit would be mined in sections, with used-up areas reclaimed and returned to their natural state, Fifield said. In all, it could operate for a century, he said. Gogebic has told state authorities that it is interested in initially mining about four miles of the parcel, according to P. Philip Fauble, mining coordinator for the DNR. The company hasn't yet submitted documents with the agency, Fauble said. "This would take extensive infrastructure to get going," Fauble said. "We're talking power, water, roads. That's why nothing's happened in the past."
The area has long -attracted interest from the mining industry. The mine would be constructed in a group of scenic hills known as the Penokee Range. In Michigan, the ancient mountains are called the Gogebic Range. The region has been mined since the 1880s. The last iron ore mined in Wisconsin was the Cary mine in 1965, where miners descended more than 3,000 feet to extract high-grade ore.
The industry now relies on extracting lower-grade ore from large pits, such as those in Michigan's Upper Peninsula. Taconite likely there Citing figures from the U.S. Geological Survey, Fifield said his company thinks the deposit contains 2 billion tons of high-quality taconite - or more than 20% of known reserves in the United States. Taconite is a iron-bearing rock contained in quartz, chert and carbonate. The taconite would be processed into iron ore pellets for blast furnaces that make steel. The company also is studying whether to make a bigger investment to process the taconite into iron and market the metal to Wisconsin's foundry industry. "It's nuts for Wisconsin foundries to be importing their pig iron from places like Brazil," Fifield said.
The Cline Group, which is based in Palm Beach Gardens, Fla., is owned by Christopher Cline, who has extensive holdings in coal in Illinois, Ohio, Pennsylvania and West Virginia. Fifield said the company purchased an option in late spring or early summer for an undisclosed sum to lease the mineral rights from a group of companies led by La Pointe Iron Co. of Hibbing, Minn., and RGGS Land & Minerals Ltd. of Houston.
If Gogebic is awarded a
permit, it will exercise its option on the lease, Fifield
La Point, RGGS and
another former owner, U.S. Steel, actively have been marketing
the mineral rights for years, raising both hope and anxiety in
"Big companies have been
looking at this for the entire last century. It's been lying
dormant," Fifield said.
In recent months, Gogebic
has been meeting with local groups, the Bad River Chippewa and
state officials, including Governor-elect Scott Walker.
Walker's transition office confirmed Tuesday that Walker spoke
The factors driving
mining exploration now: rising iron ore prices; growing world
demand, led by China and India; and the company's belief that
a modern mine will have cost advantages over those in
Minnesota and Michigan.
The last proposed mine in
Wisconsin, the Crandon mine, never got off the ground and was
strongly opposed by environmentalists.
The land was sold in 2003
to the Sokaogon band of Chippewa and the Forest County
Potawatomi. At the time, the owner of the mine, Nicolet
Minerals Co., complained about Wisconsin's "hostile political
climate" for metallic mining.
Gogebic's project also is
likely to face significant environmental hurdles.
The Penokee Range is the
headwaters for the Bad River, including Copper Falls State
Park, and Lake Superior's Chequamegon Bay, said Matt Dallman,
director of conservation in northern Wisconsin for the Nature
Fifield met with Dallman
about the mine. Dallman said the Nature Conservancy hasn't
taken a position on it but has had an interest in the region
for two decades.
The Nature Conservancy
was involved in a major land transaction in 2003 when the Bad
River Chippewa bought 23,668 acres in the watershed from
Dallman said the
organization has concerns over the effect mining would have on
pine martens, woodland birds such as the black-throated blue
warbler and on the Kakagon and Bad River sloughs, the largest
such vegetative areas on Lake Superior.
Fifield said taconite
will be crushed on site and water used in the process will be
cleaned in a wastewater treatment system.
Dennis DeRosso, chairman
of the Iron County Board, worked in the Cary mine before it
He thinks environmental
concerns can be addressed.
"The county is 100% in
support of this," he said.