On the Iron Range, new hopes and new anxieties

HOYT LAKES, Minn. – For years, residents of this struggling mining town have clung to the hope that their old way of life would return. But even so, when state regulators finally approved permits late last month for Minnesota's first copper-nickel mine, the news hit like a thunderbolt.

"You could feel it," said Toni Thuringer, co-owner of the Haven Bar and Grill, who described a buzz that ran through patrons dining in the restaurant and elbowing up to the bar.

"It's just so cool because it's been so long since we've had that feeling around here."

In Iron Range towns left for dead by the mining industry's last bust in the 1980s, the sudden realization that, after years of contentious debate, PolyMet Mining Corp. might actually open its $1 billion mine has fueled rousing talk.

"It's like the whole town breathed a sigh of relief," said Babbitt Mayor Andrea Zupancich. " 'Finally!' "

The ripples began flowing on Oct. 31, when the state Department of Natural Resources announced approval of six critical permits, including PolyMet's permit to mine and approval of a $1 billion "financial assurance" plan to protect against future pollution problems. The mine is still not quite a done deal: Some water, wetland and air permits are still outstanding, and there are pending legal challenges by environmental groups, with more likely to come.

But PolyMet officials said the permit announcement already has caused interest from potential investors to perk up. Chief Executive Jon Cherry said the project is full steam ahead and that construction would likely begin next spring.

"It is a victory for Iron Range families who have steadfastly supported us and who depend on and will benefit from the hundreds of jobs that construction and operations will create and support for years to come," Cherry said in a statement.

And while one mine does not make a whole new industry, it's a milestone, said Frank Ongaro, executive director of Mining Minnesota.

"It demonstrates that a company can make an investment in Minnesota and know that at the end, if they meet all Minnesota and federal [environmental] standards, it can end up with a permit to mine," he said. "That is significant."

In the small towns that dot Minnesota's Iron Range, where mining culture runs as deep as the massive open pit mines, the announcement sparked talk of redemption.

In Babbitt, most of the city's main buildings, and many of the houses, were built by a mining company during a 1950s campaign to attract workers. The road into Babbitt winds past a proud display of massive mining machinery, including a truck as large as a house.

But global competition, some brutal economic swings and rising technological efficiencies have taken their toll: Mining employment has declined from a peak of 13,000 in 1979 to about 4,000 now.

Today, Babbitt has just one school for all students in kindergarten through 12th grade, and the city's population has fallen from a peak of about 3,000 to less than 1,500. The centers of many Iron Range towns are marked by empty storefronts and boarded-up houses that remind people of what life used to be like.

A new mine "means families with young children will move back here," said Babbitt Clerk-Treasurer Cathy Bissonette.

Across the Range, signs reading, "We support mining" hang in business windows and stand like sentinels on front lawns.

But they mask a deep and stubborn divide.

PolyMet would tap a geological formation called the Duluth Complex, which stretches just north of Duluth in an arc along the Iron Range up to the Boundary Waters Canoe Area Wilderness and national forest lands. It is one of world's largest untapped deposits of copper and nickel. But those minerals are trapped inside sulfide-bearing rock which, when exposed to air and water, generates acid that leaches heavy metals out of the rock. And that, many residents here warn, could contaminate treasured lakes and streams in a watershed that drains to Lake Superior.

Similar "hard rock mines" have caused billions of dollars in pollution damage in other parts of the country, with the cost often falling on taxpayers after the mines closed or went bankrupt. In fact, Minnesota regulators extracted a promise from PolyMet to build a water treatment plant that may need to operate for hundreds of years after the mine has closed.

As a result, the region's mining culture has run up against one of Minnesota's other touchstones — clean water.

"Anybody that cares about clean water is going to be our ally," said Bob Tammen, a former mining company employee from Soudan who now advocates for stronger environmental protections.

Those allies include the influential Chippewa tribes that hold hunting and fishing treaty rights around the St. Louis River, which has long been degraded by mining pollutants. Game fish are already highly contaminated with mercury, which tribal environmental leaders fear will never improve if mining expands.

Nancy Schuldt, environmental director of the Fond du Lac Band of Lake Superior Chippewa, said she worries, for example, that more pollution in the St. Louis River might sabotage the tribe's efforts to bring back native sturgeon and wild rice.

PolyMet's open pit will also take out thousands of acres of what is now national forest and wetlands, she said. And while the permits require much of that to be replaced, Schuldt questions whether it will be an equal trade. If the mine "operates the way we believe it will … it will end up further diminishing the quality and quantity of resources in our watershed," she said.

For Minnesota's leading environmental groups, approval of PolyMet's permits also means a new chapter: Making sure that the state enforces and improves its environmental safeguards.

PolyMet is, after all, just the first of many companies seeking to exploit the metals buried deep in the ground. The next, even more contentious fight will likely concern Twin Metals' proposed copper-nickel mine on the edge of the Boundary Waters. That is already the subject of multiple federal law suits and a battle over permitting mining anywhere near the pristine wilderness and Voyageurs National Park.

DNR officials say they're confident that their permit provisions will prevent environmental damage and that PolyMet's financial assurance package will protect the public's stake. For its part, PolyMet says it will honor all state and federal environmental safeguards, and the company says the latest mining technology will allow it to operate while protecting Minnesota's natural resources.

Nonetheless, environmental advocates have long pressed state regulators to take a tougher approach, and they say the state's laws are not up to the job at hand. The state's laws governing copper-nickel mining were established in the 1990s and have never been tested, said Kathryn Hoffman, executive director of the Minnesota Center for Environmental Advocacy,.

"We've taken these laws that are 25 years old and tried to put them in a permit," she said. For example, the laws governing PolyMet's tailings storage basin were designed for water dams on rivers, not an artificial basin constructed in the 1950s that holds contaminated mine waste.

Now, with the first copper-nickel mine nearly a reality, and with new DFL clout on its way to the Capitol, environmental groups plan to try to change that during the next legislative session, she said.

On the Range, some elected leaders are walking a careful line between the two emotional camps.

"In town we all get along, shake hands, have coffee," said Ely Mayor Chuck Novak.

But, he added, "If the process shows that it can't work, then we don't want it, because we don't want to ruin our environment."