A metals coin flip: Company might win some, lose some.

Michigan State Roundup

Published March 1, 2008  | March 2008 issue

In recent years, it appeared that the Upper Peninsula was leaving behind its identity as a mining region, turning its economic eye instead to tourism, with varying results.

Now, the U.P. is divided over the likely revival of its mining sector. As of December, Kennecott Minerals had received the necessary permits from the Michigan Department of Environmental Quality to open a mine that is expected to produce 16,000 tons of nickel a year, along with sizable amounts of copper, cobalt, platinum and palladium. Kennecott's parent company (mining giant Rio Tinto) committed $300 million to the development of the mine, which is expected to start up sometime next year.

That the company expects to bring 120 or more high-paying jobs to the region, not to mention potentially $300 million in local and state tax revenue, is not good news to everyone. Environmentalists have vehemently opposed the mine on the grounds that it is likely to do irreparable ecological harm; for example, the mine will bore beneath. Salmon Trout River, home to the rare coaster brook trout.

The problem is that the metal is encased in sulfide rock, which produces sulfuric acid when exposed to air and water. Historically, mines have had difficulty keeping both the metals and the acid from leaching into water tables or nearby surface water. But methods and technology have changed, and Kennecott officials say they can and will prevent ecological harm. The public apparently is not convinced. A public hearing on the mine last year reportedly attracted more than 1,000 people.

The mine would be the country's lone nickel mine. The kicker is that, if approved, this mine could be followed by others. Kennecott has mineral rights to roughly a half-million acres of land in the Upper Peninsula, according to newspaper reports. Kennecott is also not the only prospector in the region. According to news reports, at least four other mining interests have either uncovered metal deposits in the U.P. or are looking for them.

In January, the project was delayed for further review by the state Department of Natural Resources, because the mining site and surface buildings are expected to be on state land. Final decisions on these DNR land permits are not expected until at least March.

Ronald A. Wirtz