Wisconsin DNR Grants Exploratory Permit for Iron Ore Mine

Published August 8, 2013

The Wisconsin Department of Natural Resources has opened the regulatory door for a proposed iron ore mine in Iron and Ashland counties by approving a permit for preliminary drilling in the Penokee Range.

DNR’s action comes four months after Gov. Scott Walker (R) signed a bill making it easier for iron mining companies to clear the state’s regulatory hurdles.

Economic Benefits Predicted
At issue is a $1.5 billion mine to be developed by Gogebic Taconite (GTAC), a division of Florida-based Cline Resources and Development, which operates coal mines in Appalachia and southern Illinois. The open-pit mine is projected to be in operation for at least 35 years, cover an area of about four miles in northwestern Wisconsin near Lake Superior, and provide 700 direct jobs and an additional 2,800 jobs in trucking, housing, and other industries.

The entrance to the proposed mine is in Ashland County, but actual mining operations will be in Iron County. According to the U.S. Bureau of Labor Statistics, the unemployment rates in Ashland and Iron counties are 10.0 and 14.1, respectively.

Gov. Walker and other supporters of the mine have gone to great lengths to tout the economic benefits. After signing the iron mining bill in March at a manufacturing plant in Rhinelander, Walker traveled to Milwaukee to P&H Mining Equipment Co. to stress the importance of the mine for job creation throughout the state.

Iron ore is the raw material used to make pig iron, which is essential to the making of steel. Approximately 98 percent of mined iron ore is used to make steel.

Satisfying Environmental Concerns
The Department of Natural Resources (DNR) permit will allow GTAC to drill eight exploratory holes. The company originally sought to drill 13 holes but scaled back its plans after officials with DNR and the U.S. Army Corp of Engineers visited the site in May. The DNR and Army Corps officials raised concerns that drilling 13 holes would require the company to put heavy equipment on logging roads, posing a threat to adjacent wetlands.

As is common in mining proposals, environmental activists raised concerns about water and mining waste, known as tailings.

GTAC’s exploratory wells will provide valuable data on the amount of pyrite in the rock.  When exposed to air or water, pyrite, or waste rock, can cause acid mine damage and potentially harm local surface and groundwater. GTAC officials believe pyrite won’t be a problem at the proposed site and its engineers can effectively manage whatever pyrite-related problems may arise.
Years of Environmental Red Tape
The GTAC permit represents only the first step in what promises to be a long gantlet of regulatory obstacles the company will have to run. Mining operations are not expected to get underway for several more years. In addition to the permitting process, environmental activists groups are expected to file lawsuits in the hope of quashing the project. 

GTAC will also have to take into account the water quality standards of the Bad River Band of the Lake Superior Chippewa tribe, whose reservation is downstream from the proposed mine.

Further slowing GTAC’s mining efforts, anti-mining activists struck the site in June, vandalizing property and damaging a drilling rig. 

Wisconsin Residents Support Mine
Wisconsin residents hope the mine will add to the state’s economic rebound under Walker.

“When MacIver interviewed the residents of Hurley, Wisconsin a year ago for our mini-documentary, ‘Mineshaft,’ it was clear that they desperately want this mine and the family-supporting, generational-changing jobs that go with it,” said Brett Healy, president of the Madison, Wisconsin-based MacIver Institute for Public Policy. “This is an opportunity to dramatically improve the economic fortunes of a downtrodden region for decades to come.

“It is disappointing that extremist environmentalists continue to oppose this job-laden project, and it is even more disgusting that some in their movement will resort to thuggish harassment, theft, and destruction of private property in their attempt to block progress,” Healy added. “Let’s hope that common sense prevails in the Great North Woods and that GTAC continues to move forward despite the ugliness of the environmental extremists.  Wisconsin needs these jobs.” 

Bonner R. Cohen, Ph. D. ([email protected]), is a senior fellow at the National Center for Public Policy Research.