Ely’s mining history would awaken from a 47-year slumber under Twin Metals Minnesota’s $2.7 billion copper-nickel mining project that would create 850 jobs in the region.
There is no argument the minerals that lie below the Spruce Road will one day be mined and used for everything from cell phones to medical instruments to windmills. The only question is when this will happen.
Determining the when is like trying to win the lottery – there are many factors involved. Here are some of them:
1. Financial. Duluth Metals is now running the show at Twin Metals with a 60 percent ownership. Antofagasta, the big dog, has dropped down to a 40 percent stake and payment obligation. Can Duluth Metals pull together a financing plan to survive short term, and then a giant plan to build a $2.7 billion mining operation? Or is there another major player waiting to step in?
2. Technology/Environment. We have yet to hear anyone say they support this project no matter what the impact is to the environment. The question remains if there is technology available that can meet the state and federal requirements to build and operate the mining operation TMM proposes.
3. Political/Legal. PolyMet is the lead dog in the copper-nickel mining arena since it is closing in on getting permitted. But PolyMet seeks to build an open pit mine that will have no impact on the lightning rod known as the BWCA. Can TMM weather the political storm (most likely followed by multiple lawsuits) and get permitted?
4. Worldwide. The mineral resource Twin Metals seeks to mine is one of the largest in the world. But its value depends upon the price of copper, nickel and other minerals on the worldwide market. When copper prices began to shoot up in 2005, drilling in our area started to increase. Look at a chart of copper prices and you can follow Duluth Metals history. The company started when copper began its climb in 2005. When the price collapsed in 2009, so did Duluth Metals’ stock price. When copper shot back up in 2010, Antofagasta came on board with a $130 million investment in Twin Metals.
Should copper prices drop like a rock in a lake, companies like Duluth Metals will have a difficult time finding financing, especially for $2.7 billion. But if copper and the other minerals here increase in price, everything changes. And here’s a wild card: if the United States needs a certain mineral for defense purposes or for the national economy, all bets are off.
These are interesting times for Ely and its mining history. The Pioneer Mine closed on April 1, 1967 after producing 41 million tons of iron ore that helped to fight two world wars and build a nation. Could Twin Metals supply the needed minerals to fuel the economy of tomorrow?
Interesting times, indeed.
For the original source of this editorial, click here: http://www.elyecho.com/articles/2014/08/24/returning-ely-its-mining-roots