Less than a month after its final authorization by state regulators, a sulfide mine in Michigan's Upper Peninsula faces a promised legal challenge from environmental groups and a proposed ballot initiative that could make its operation illegal.
The $300 million Eagle Project mine, about 25 miles northwest of Marquette, is the first to be permitted since Michigan strengthened its mining laws in 2004 and would be the only primary nickel mine in the United States when production begins in late 2013.
Kennecott Eagle Minerals Co., a subsidiary of London-based Rio Tinto PLC, expects to produce about 300 million pounds of nickel, a crucial component to stainless steel, hybrid-electric vehicles and advanced medical equipment, as well as 250 million pounds of copper essential to revamping the country's aging transmission system.
But opponents of the underground mine say the project could also drain acid into the Salmon Trout River -- one of the last mainland U.S. rivers used as spawning grounds by the coaster brook trout -- and will restrict access to a site considered sacred to tribal groups.
Michelle Halley, an attorney for the National Wildlife Federation, said the group is preparing to challenge the state decision in circuit court and is continuing a separate lawsuit challenging the state's decision to lease land that includes Eagle Point, a rocky outcrop considered sacred by the Anishinabe people.
"We have a right to appeal to Michigan's circuit court," Halley said. "We fully intend to utilize that right."�
Other groups planning to join the NWF appeal include the Huron Mountain Club, Keweenaw Bay Indian Community and Yellow Dog Watershed Preserve.
Meanwhile, a Detroit-based group is halfway through a 180-day petition campaign aimed at putting additional mining reforms on the state ballot this November. If passed, the reforms would make mines like Kennecott's illegal.
Ballot provisions sought by the Michigan Save Our Water Committee would prohibit mining proposals within 2,000 feet of a water body and require mining developers to identify similar mines in the United States or Canada that have operated without violating environmental standards.
"This is a classic David versus Goliath fight," wrote Duncan Campbell, the MSOWC chairman, on the group's Web site. "Once on the ballot, an environmental ballot initiative has never lost in Michigan."
Subsidence fears
Chief among critics' concerns is the stability of a rock pillar designed to support the mine's roof and prevent the overlying river and wetlands from collapsing into the mine, Halley said.
"The analysis techniques used to assess the Eagle crown pillar stability do not reflect industry best-practice," said a May 2006 report by David Sainsbury and commissioned by the state's Department of Environmental Quality. Subsequently, conclusions made in Kennecott's application to regulators about the crown pillar subsidence are not "defensible."
"The biggest issue has been and continues to be the stability of the crown pillar supporting the roof of the mine," Halley said.
Opponents have also criticized the timing of the mine's final authorization, which happened two days before DEQ became part of the Department of Natural Resources and Environment and a week after its director stepped down.
"There were a lot of procedural irregularities throughout the whole thing," Halley said.
For example, final approval from DEQ Director Jim Sygo -- who replaced Steven Chester and led the agency through its final 12 days -- was granted before the department received a response Chester requested in November from a state administrative judge that would have clarified the agency's responsibility for places of worship.
"Any final decision on this mine and the fate of the Great Lakes is a long way off," said Cynthia Pryor of YDWP, a local group opposing the mine. "We will fight this project, because it is unsafe and because the process has been perverted, for as long as we can."
Stringent safeguards
Kennecott was required to submit plans for all phases of mining development, including transportation, storage and processing of ore, said Robert McCann, a spokesman for the Department of Natural Resources and Environment.
"We certainly would not have moved forward if we didn't feel the permit had safeguards in place" to prevent threats such as acid mine drainage, said McCann.
An estimated 400,000 tons of waste rock to be removed to make way for the mine would be placed on a lined storage pad and covered to protect the rock from wind and precipitation, said Deborah Muchmore, a Kennecott spokeswoman. Mined ore would likely be trucked to a shuttered mill Kennecott hopes to renovate about 25 miles from the project site, Muchmore said.
A final permit for the $80 million Humboldt Mill project could be issued as soon as next week, said McCann of DNRE. Crushed and concentrated nickel and copper would be sent out of state by rail, likely to existing smelting plants in Ontario, Muchmore said.
In 2010, Kennecott workers expect to clear and grade the 120-acre site and build a $10 million treatment plant to purify mining wastewater to standards exceeding Michigan's drinking water standards, Muchmore said. Up to 504,000 gallons of wastewater will be discharged daily into surrounding groundwater that leads to the Salmon Trout River, which empties into Lake Superior about 10 miles downstream, according to the company's discharge permit.
"The water treatment will be the first of its kind in Michigan to meet the state's new mercury anti-degradation standards," Muchmore said.
Kennecott has also agreed to post about $20 million in insurance bonds to protect against environmental contamination, Muchmore added.
And unlike mines on federal lands, Kennecott will pay between 2 percent and 5 percent in royalties on the minerals it extracts from state-owned land, Muchmore said. Those royalties, which would be deposited in Michigan's Natural Resources Trust Fund, could run from $25 million to $80 million depending on the prices of nickel and copper.
Retooling Michigan's economy
With Michigan's unemployment running at a national high of 14.6 percent in December, state lawmakers and business leaders have stressed the need for bringing mining jobs back to the Upper Peninsula.
If built, the Kennecott mine would become the first new hardrock mine in the Upper Peninsula in more than 50 years and would generate up to 700 jobs in one of the most economically depressed parts of the state.
Once opened, the Eagle Project mine would employ about 200 full-time workers, many of which would make well above the area's median income of about $36,600 and a majority of which would be local, according to the company. Future jobs that could be created with the development of Kennecott's nearby Humboldt Mill could create additional jobs for Mackinac and Baraga counties, which have unemployment rates of 10.6 percent and 25 percent respectively.
"Michigan's mining industry has long played an important role in our state's economy, especially in the Upper Peninsula," said Rich Studley, CEO of the Michigan Chamber of Commerce. "Getting Michigan moving forward again means we must be a state that grows things and makes things. Making things in Michigan means mining and manufacturing."
Other mining proposals are expected to be submitted soon, said McCann of DNRE.
Kennecott, Aquila Mining Systems Ltd. and Orvana Minerals Corp. are currently exploring deposits of zinc, silver, gold and copper in the Upper Peninsula, McCann said. One or two additional mining development proposals are expected over the coming year, he added.
But the ballot initiative by MSOWC threatens to derail those projects and virtually any other mining proposals in the Upper Peninsula, the chamber warned.
"This anti-jobs petition drive sends a terrible message that Michigan is closed for business," said Doug Roberts Jr., the chamber's director of environmental and energy policy.
"Michigan's employers need a consistent regulatory environment to make multimillion-dollar investments over multi-year periods," Roberts said. "Almost everywhere in Michigan is within 2,000 feet of a water body, so this would essentially ban all new mining in Michigan."
This article was authored by Phil Taylor and is posted courtesy of E&E News Publishing, LLC/Land Letter. To access the Land Letter web site, go here.