Copper mine study forecasts 30 years of profits, 850 jobs
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A proposed massive underground copper mine near Ely would operate for 30 years and employ approximately 850 people, according to a draft "pre-feasibility study" released today by Toronto-based Duluth Metals.
The Twin Metals project, a joint effort of Duluth Metals and Chilean mining giant Antofagasta, would be one of the largest underground mines in the United States, targeting a rich deposit of copper, nickel and precious metals on either side of Birch Lake, near the southern edge of the Boundary Waters Canoe Area Wilderness.
The technical report predicts the mine would produce on average 50,000 tons of ore per day during its planned three decades of operation. Twin Metals officials have said the proposed mine would resemble an "undergound city," with features like roads, lights, plumbing, electricity, and air circulation supporting a 24-7 operation over 1,500 feet below ground.
The project is "one of the most compelling greenfield copper-nickel development projects in the world," Duluth Metals President and CEO Kelly Osborne said in a statement announcing the new technical analysis. The study predicts low operating costs, sustained profits and revenues over the first ten years of the mine exceeding $12 billion.
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But it's also a controversial project. Opponents say a mining operation on the edge of the Boundary Waters would devastate more than two dozen resorts and businesses that cater to tourists who come for the solitude and clear lakes in and around the Superior National Forest. The BWCA is the most visited federally designated wilderness area in the country.
They also say potential water pollution, generated when sulfide-bearing ore comes into contact with air and water, could flow into the pristine lakes and rivers of the BWCA. "The study does not relieve our concerns about polluted water flowing into the Boundary Waters," said Aaron Klemz, Communications Director of Friends of the Boundary Waters Wilderness. "Because of the project's location, we've very concerned about it."
In contrast, the proposed PolyMet copper-nickel mine near Hoyt Lakes, which lies in the Lake Superior Watershed, is a smaller project. The PolyMet mine has a proposed 20-year lifespan, would employ about 350 people employees, and produce about 32,000 tons per day. It also is much further along in the regulatory process, with state and federal regulators evaluating public comments to the project's environmental impact statement.
Twin Metals is still nearly two years away from submitting a specific mine plan to begin the environmental review process.
According to a project configuration Twin Metals unveiled earlier this year, employees would enter the mine through two long, sloping declines near the Ely airport, about six miles south of town.
Ore would be crushed underground, and a finished concentrate would be piped about 15 miles south to a new facility outside Babbitt, near the existing North Shore taconite mine.
The company also would ship about 45 percent of its tailings, the waste material left behind after the ore is concentrated, to the site located just across the Laurentian Divide, in the watershed that flows into the St. Louis River and eventually to Lake Superior. The remainder of the tailings would be mixed with cement and fly ash and backfilled into the mine.
Twin Metals officials say it will cost $2.77 billion to build the mine over three years — about 12 million labor hours. It estimates it will earn revenues of $12.11 billion over the first 10 years of the project.
Duluth Metals' stock price tumbled 23 percent to $.33 a share by the end of trading Wednesday. During a conference call to announce the report, investors appeared to have some concerns over the company's ability to raise the capital needed to finance the project. They also raised questions about Antofagasta's decision last month not to increase its ownership stake in Twin Metals.
Osborne, its CEO, said in a conference call with investors that Minnesota is an optimal place to build a new mine because of strong support for the existing iron ore mining industry, an able work force, and access to rail and shipping on the Great Lakes.
"We believe Minnesota is a great place to build what I believe is one of the world's best 21st century mines," he said.
