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Western U.P. mine closes, locals look to keep workers at home

Michigan State Roundup

October 1, 1995

Western U.P. mine closes, locals look to keep workers at home

Two months after enjoying its lowest unemployment rate in 15 years (4.6 percent), Ontonagon County in the Upper Peninsula (U.P.) of Michigan was expected to suffer rates of up to 30 percent in October following the closure of the Copper Range mine in White Pine on Sept 30. However, those high unemployment rates may not linger long as workers are courted by mining and other manufacturing firms throughout the country.

One local official described the mine's last day as a funeral, "only a thousand people died, instead of just one." More than 1,000 employees lost their jobs, meaning the region will lose over $30 million in annual payroll; the company says the mine also generated another $30 million in annual purchases. In total, the White Pine mine was reported to account for 40 percent of Ontonagon County's economic activity.

"It's a tough one," says Glen Anderson of the White Pine Economic Action Team. "This is the biggest challenge we'll face in the Upper Peninsula, at least until the iron mines close." Anderson's group, along with other local and state organizations, are working to aid workers who lost jobs and to create new opportunities for employment in the region. Within weeks of the announcement, mining and other firms from Western states inquired about hiring laid-off Copper Range workers.

Copper Range Co. announced the mine closure this summer, just months after planning to expand the mine's activity by adding a $200 million state-of-the-art smelter. It was hoped that the smelter would help ensure the mine's viability for years to come, but increasing costs, declining ore grade and the recent discovery that the remaining ore body is in worse shape than expected, all have led to the mine's closure, according to company statements. The smelter may still be built in conjunction with the company's efforts to use solution mining to retrieve ore from previously mined caverns, but even at its peak, solution mining is expected to employ under 200.

Displaced workers will receive unemployment benefits for up to a year after normal compensation has ended, under the Transitional Adjustment Assistance program managed by the Department of Labor, which was created to aid workers impacted by the North American Free Trade Agreement. Gov. John Engler announced a plan that includes a $2,000 voucher from the Governor's Discretionary Fund for each Copper Range worker for approved training and relocation, if requested. The governor's plan also includes funds for emergency services, establishes a commission to study long-term economic strategy and creates a coordinated effort by various state agencies.

Dorothy Bussiere, administrative secretary for the Ontonagon Economic Development Corp, says there has been "a lot of local initiative" in area communities, but much of that effort has been to help displaced workers in the short term. Some mines from Western states, like Nevada and Arizona, have contacted local officials about hiring the displaced workers, and tunneling firms in California and Oregon have also expressed interest in the workers. One job fair that featured employers from around the country drew hundreds of former miners.

Other employment opportunities have arisen closer to the U.P., but most will move workers out of the area, and while new employment at any location may benefit workers, local officials are concerned about the long-range impact on the western U.P. economy. White Pine's Anderson says local development efforts will likely include identifying firms in nearby states that may be looking to expand and need a skilled workforce. He says there is also the possibility of attracting a new state prison and of creating a Renaissance Zone, which Anderson describes as a "super tax-free zone" now under consideration in the state Legislature. The Renaissance plan, if approved by the Legislature, would establish eight zones throughout the state, up to 5,000 contiguous acres, that would provide 15 years of tax abatement on local property and sales taxes, income taxes and state business taxes-11 years tax free and four years of phased-in taxes.

Unfortunately for the western U.P., a closed mine does not offer much built-in infrastructure for incoming firms, Anderson says, the way a closed manufacturing plant does, or even an air base. There are no available buildings that a new firm can simply move into, and there is little funding available to build on speculation, he says.

David Fettig