Penokee Mountain Tour 2006

Another North Woods Mine?

Friday, 07 April 2006 00:00

Last Updated Wednesday, 05 March 2008 00:07

Written by Administrator

Wisconsin State Senators and Local Government Officials Tour Penokee Mountains with La Pointe Iron Company Vice President

By Deanna Erickson

Saturday felt nearly like spring along Highway 77 in southern Ashland County. Tall trees stood thick amid the snow where the largest open-pit mine Wisconsin has ever seen – 21 miles long, 500 feet deep- could be built in a soon as seven years. La Pointe Iron Company, a subsidiary of U S Steel whose national mineral rights were recently purchased by the Texas-based RGGS Land & Minerals Ltd., is in the process of seeking financial and political backing for the project. 

David Meineke, vice president of La Pointe, spent the afternoon presenting the proposed site to such state leaders as Senator Dale Shultz (R-District 17), Senator Dave Zien (R-District 23), and local leadership, including Mayor of Montreal Robert Morzenti, Ashland City Planner and Zoning Administrator Brea Lemke and Ashland City Administrator Brian Knapp, as well as local union and industry representatives. The meeting was not announced publicly, though a few community members did manage to attend.

After a parking lot tailgate presentation on the mines location and geology, discussion turned to political support for the potential mine. “We haven't met with the governor yet but we met with... his aide and we got a rather favorable response,” Meineke said. Senator Shultz added “I think both political parties are way up to our project.” The office of Governor Doyle has made no formal public comment on the project thus far.

The tour continued to a point along Highway 13, just south of Mellen and a few hundred feet north of Foley Road, where the ore body juts from the ground, and then on to the Penokee Mountain Lookout in the Chequamegon-Nicolet National Forest, overlooking the Bad River gorge. Iron ore is oxidized 1000 feet from either side of the river and does not have marketable value, but valuable deposits continue for three to four miles to the west. The tour concluded in the town of Upson, where the eastern end of the ore body lies just a quarter mile south of Highway 77.

“You know, we're looking around the world, talking to all the big companies” said Meineke. The company is seeking anywhere from a half billion and to over a billion dollars in financial backing.

Once such backing is secure, the company expects a minimum three year period before formally submitting a proposal to the Wisconsin Department of Natural Resources. The acceptance or denial of a metallic mine proposal submitted to the WDNR typically takes at least 4 years.

Transcript of the Mining Presentation

David G. Meineke, VP LaPointe Iron Company: You know we're looking around the world, talking to all the big companies. You know development here on some sort of reasonable scale, you're talking at least a half billion dollars. We're looking to probably make some sort of a deal that'll be over a billion dollars. These major developers, we're talking to these people. Syndney Australia, already, they say "Where is this mine?" and when we say Wisconsin, they say "well I haven't heard anything good about Wisconsin as far as mining goes." People around the world consider Wisconsin to be a difficult place to develop mining. So we have to convince them (too much background noise)... This does not qualify. This is not [inaudible] iron. We have these mines operating in Minnesota and Michigan and we don't have major challenges there. Minnesota has strong environmental regulations.

I guess that's all I really have as a presentation.

*folks dispersing*

Senator Dave Zien: I think the best thing that's going here is there was a... smart growth project, there's a desire to have a strong [inaudible]... We all drove here in cars, cars gotta come from somewhere. If we can't mine environmentally here, who else is gonna do it? We're better off doing it here where we can do a good job.

Someone Else: If we don't do it here, it's probably gonna go to Brazil.

Dave Zien: Wisconsin has the best example of an environmentally safe mine in the history of this planet. That was the Flambeau mine and they mined it for four years and filled it back in and that was a sulfide mine that was more threatening to the environmental. Then you've got this... and you said the emissions on this are almost non-existent.

David Meineke: Well the emissions on the technology we're talking about are much reduced compared to conventional technology. Like that picture I showed you, what we're proposing is not Gary, Indiana.

Dale Shultz: (Can't hear a lot here and Dale speaks quietly) Well I think the most important thing out of here is this is not gonna be...we need to combat the inevitable... I think both political parties are way up to our project. I'm a Republican but... there's no reason why we can't mine if we can do it responsibly.

David Meineke: We haven't met with the governor yet but we met with Hendrickson his aide and we got a rather favorable response.

Dave Zien: We talked to Shawn Dilwig (sp?) last week, one of our liasons to the governor’s office. Absolutely one hundred percent wanting to help out in any way he can.

Dale Shultz: And I think the idea of inviting a lot of people to the... is a good way to begin to talk about the subject, without focusing on any one area. Then within that frame work to begin to talk about this more.

David M: And we plan to be open that's the only way it works these days. But this whole image of Wisconsin and the people we're trying to deal with in the financial market and the mining industry, we hope to be able to convince them that Wisconsin is interested in seeing this kind of development and if we can get support from you folks and the governor that this can be done here, then that's going to help us to be able to bring in the big money.

Dale Shultz: There’s a lot of issues that need to be worked out with local people and they need to see it's an advantage to them. The environmental part particularly in Northern Wisconsin is always very tough, but I guess it's getting better.

Dave Meineke: Well I appreciate everybody coming today. Sorry about my cold lecture.

(Gas station attendant comes out to ask if they will move their cars. Zien says we're leaving anyway. Everyone loads up in cars. We drive south on Hwy. 13 and turn around to face north and pull over just north of Foley Road. Here the iron vein intersects the road and is visible at the surface.)

Meineke explains that the mine would run to within 1000 feet or so of the Bad River, since the iron is oxidized there and there are probably regulations that specify how close they can be to the river anyway. We then drove to the Penokee Mountain lookout. Looking over the Bad River gorge, Meineke said the company owns another 3-4 miles of property of commercial ore that's magnetic and mine-able to the west of that lookout. We then stopped at the intersection of 122 and 77.

David M: So about here is where the magnetic taconite does not exist any more. It becomes oxidized non-magnetic and to the east of here is the National Ore mine property as many of you know. So there was no real mining of any consequence in this area, except that Berkshire Mine over near Mellon. That was about sixty years before it's time. That was in the twenties.

So this is about the extent that we would... perhaps maybe another half mile to the east of this city is the magnetic taconite and then that's it. And we then you know look at this 21 mile strike... here.

Well this is kind of a quick tour and a quick run down here. If anyone is interested in learning more, we can sit down in a warm room some place. Our presentation is usually about an hour long, so if any body wants to hear it we're always available to do that, you've got my card.

Dave Zien: And I'd like another one. Well I was a geology/geography major in college, so... (He then discusses glaciers in Lake Superior and makes a demo with snow...this is long and irrelevant)

Some guy: How far is that red line (representing the ore body on the map) from the road?

DM: Right here we're about a quarter mile away from it. Coming over here we were like a mile, mile and a half.

Guy: So that's not going to impact the road?

DM: I don't think it'll impact the highway or the city, city of Mellon, any of it.

Dave Zien: When you mine will you have any underground mine or will it be all open pit?

DM: It'll be all open pit.

DZ: This mine was an underground mine. Were there any miners killed.

Mayor of Montreal: Yeah there were lots of guys killed.

DZ: They had lots of em killed?! Oh...

One of the Union guys: If you've got solid rock, 10 cubic yards, how much tailings will you have after you extract your ore?

DM: We'll wind up for every ton of iron ore, 2 and a quarter tons of tailings.

Union guy: What I'm getting at is in relation to the solid rock, if you've got 10 cubic yards of solid rock, what will the tailings be?

DM: Tailings could be deposited back in the hole. 2/3rds of it roughly.

Union: Once you fracture it, it expands.

DM: It certainly does, that's right. But it still wouldn't quite fill the hole. We are doing some in pit tailings in Minnesota up by the Taconite area, but here you might be able to go deeper in the future. Depending on the availability of iron ore around the world, iron ore in the United states and that and the economics of all usually don't want to then put waste material on top of the ore. In fact in Minnesota, what we do is we take the water out of the pits and go back in a mine. And that could happen here too, you know that is way out in the future of course but that could happen.

Montreal Mayor: How does that compare for the foundries? How does that compare in price to the pig iron they bring out of Brazil now?

DM: I think we could out compete Brazil.

Dave Zien: We bring in Iron from Brazil right now?

Montreal Mayor: The foundry in Rice Lake. They used to get it from Russia. We're not allowed to clean it up anymore but they use different air over there, so they're allowed to boil all the impurities out of it. They buy pig iron this big and this big (showing with hands) from Brazil.

DZ: And look at how we're destroying the atmosphere.

Mayor: They got different air over there, you miss the point. (laughing)

DZ: We're bringing in logs for the last decade from Brazil. And every time you deplete the Amazonian rain forest. Forty percent of the world’s atmosphere, of the world’s oxygen goes into the atmosphere from the Amazon. We're bringing logs in for ten years to the state of Wisconsin, we got all these logs here in the Chequamegon-Nicolet National Forest, that we're not even harvesting properly. So I mean, we're destroying our atmosphere, they deplete the rain forest they're destroyed forever. You can't bring back rain forest.

Union guy: That beautiful boardwalk they made in Duluth, that's from Brazil.

Dana: Oh geez

Dave Zien: One other thing. If La Pointe mining company comes in, and this is reality, are you going to be a little bit like Ladysmith? They invested a lot of money. They built the Town Hall, they built the library, they donated money to community projects. To my knowledge it's hard to find anyone that's against that. Even the people who were against it at first, they say "why didn't they stay?" They mined copper, it was the richest copper in the world at that time, richer than Argentina. They threw away four or five percent. People around Ladysmith say why don't they come back and mine what they threw away. My question is, is La Pointe a little bit like that? If there's a community project, like the city administrator in Ashland says hey we need a thousand dollars…

DM: A million dollars!

DZ: A million dollars for Northland College (laughing) or the technical college!

DM: When you have a business like this in the community like this, you just have to support the community. We haven't even thought about that, but that's what you gotta do. When you're part of the community, that's just who you gotta be. You gotta support it so I'm sure that would...

DZ: That's what happened with the Flambeau Mine. They never killed one fish, not killed one tree, and that was sulfide mining. This is not sulfide mining.

DM: That's right.

Dana Churness: Have there been samples taken, core samples?

DM: We have 233 drill holes taken, so we've got the iron information fairly well defined, but there's more would have to be done yet in the coming years here.

Deanna Erickson: Would you be looking at filing a permit with the DNR in the next couple years?

DM: Well as soon as we have a reasonable assurance that we can have financing to do this, we would go ahead and start that process, which we think is gonna take several years, you know, but we're guessing at least three and maybe more.

DZ: And that's probably one of the ulterior motives of that leg council study is we want proponents, opponents, we want mining industry, we want all facets that people can look at it. I even invited the Issac Walton League and the Sierra Club.

DM: Yeah, everybody's got to get involved, that's right...

Union guy: There's nothing secretive about this.

Larry Anderson: I know up on the Iron Range here like Hoight Lake where they proposed the Nugget plant, they had several community meetings and the same thing over in Taconite. I think them are real good because you can bring everybody to the table, everyone can like hands on to see what's...

DZ: Are people pretty supportive up there?

Larry: Yes.

Union guy: Hasn't the biggest problem over there been the permits?

DM: At the Minnesota Steel? I'm the founder of that project, I'm one of the three founders of that project. The permiting’s been going on for quite some time but there really isn't any major hurdles, it's just a process that has to go through. We don't have any incurable problems there. It's been going about two years in earnest now. The permits should be done, the process should be done by the end of this year and the permits will be in hand, that's the expected completion date. And then construction will start early next year.

That project is like the two, well phase one is like a million and a half tons of steel a year, the phase two will bring it up to 2.5 million tons a year. That's a big project. The full phasing including coil steel is about 124 -125 billion dollars. This is all pretty clean technology. That, that'll be the cleanest steel in the world, you know.

If anyone wants us to come and sit down and give a presentation and talk about this, two or three people or 20 people whatever, you know, we're available. Cuz we got nothing to hide. What we do is all community here. We feel there's a demand for steel, we're still driving those things, that we find a clean way to make it that's all.

DZ: We just want to make sure you get some of that steel down to Harley Davidson.


DM: Yeah, we gotta keep those Harley's rollin', yeah. They don't wanna make those out of aluminum right?

Larry: I don't want no Brazilian pig iron in my Harley!

Mayor: You go check with Harley and see where they get it.

DZ: I wonder where do they get it?

Mayor of Montreal: Cheapest place is Brazil, where do you think they get it?

DM: Those Brazilian pig irons imports are on the increase. And they're taking down the forest down there to make it. If people only knew what foreign governments do to the atmosphere compared to the United States of America.

Unknown fellow: Look at all the coal we use to produce electricity. Yet the foundry in Rice Lake had to quit using coal. Because of the life of their melting pot (this goes on and on and is again irrelevant - a discussion about how much coal is used in Wisconsin and how much oil comes through ports in Superior.)

The meeting ends.