All Clear for the Mining Boom in Michigan’s UP, Unclear What That Portends

Just before the holidays I wrote a short post about the one-two punch that Michigan legislators delivered during the 2012 lame duck session. They rushed through legislation to make Michigan a “right to work” state despite widespread protests and they passed Emergency Manager Legislation in defiance of voters.

Most of the news coverage of these bills focused on the action in Lansing and effects this legislation might have in the Detroit auto industry. I wondered aloud (or at least on Twitter) what implications these bills might carry for towns and working people in the Upper Peninsula.

There’s a new mining boom underway in the region, with global giants like Rio Tinto and Orvana exploring, leasing, and re-opening old mines.

This map [pdf], put together by the Lake Superior ad hoc Mining Committee, shows all mines, mineral exploration and mineral leases in the Lake Superior Watershed as of 2010.

Mining-Activity-Lake-Superior-2011

The map merits some careful study. As you can see, there is already significant activity in the Upper Peninsula. On the Canadian side, especially around Thunder Bay and further north, there’s been a leasing boom. Lots of gold on the eastern shore; copper and nickel as you move further west. They’re also exploring for uranium in at least two places.

The new mining is going to put enormous pressure on the Lake Superior basin. There are the usual environmental hazards associated with mining — subsidence, toxic runoff, acid mine drainage. Mining puts the waterways – the Lake and the streams and rivers that feed it – at risk. And then there is the infrastructure that’s going to be built to support all those mines. Access roads and haul roads, like the proposed CR 595 in Big Bay, roads to get to those roads, gas stations to fuel the vehicles that run along those roads, housing to shelter the people who drive on those roads to get to work and haul the ore from the mines, and so on.

Governor Snyder and his cronies in the Michigan legislature are doing everything they can to encourage this new activity. Just before the holidays, the Governor signed a third lame-duck bill, addressing the taxes that mining companies operating in Michigan will pay. The new bill, brought by outgoing Republican representative Matt Huuki, relieves mining companies of up front costs.  Indeed, they will pay no taxes at all until they start pulling minerals from the ground. Even then, companies will pay only 2.75 percent on gross value of the minerals they extract. So a million dollar sale of Michigan’s mineral wealth on the copper exchange will yield the state a paltry $27,500 in taxes.

35 percent of these so-called severance taxes will go to a “rural development fund to support long-term economic development opportunities.”

A number of things aren’t clear to me. What, exactly, is meant by “economic development” here? What’s the best course of development for a rural region, and for the Lake Superior region? How will fueling the boom benefit the region over the long term? How much if any of this money will go to alleviating the environmental impact that all this new mining is bound to have? How is it possible to talk about rural development without taking responsible stewardship of the environment into account?

It’s also unclear what sort of working conditions in the new mines the “right to work” legislation might allow, and whether the Emergency Manager bill could be used to limit community oversight.

For now, at least, it looks like the big mining companies are running the show in the UP, and the vague promise of economic development — whatever that means — has trumped all else.

8 thoughts on “All Clear for the Mining Boom in Michigan’s UP, Unclear What That Portends

  1. Michael Miles

    Whether we like it or not, we can only look at the U.P. as hinterland, and giants like Rio Tinto as gateways to the market. Even though these two spheres can provide benefits to each other, there is no guarantee that an unscrupulous market will act as anything more than a colonial power. In a rational society, the governed — led by their elected officials — would examine the past record of resource extraction and realize that the destruction of oak and pine forests throughout the eastern half of the United States, the devastation of bison herds, and the cataclysm of coal mining should not be repeated. But the legacy of our society is one of consumption, not conservation, so Michigan will sell itself short.

    It does set up an interesting opportunity for Wisconsin, Illinois, and Indiana to sue over diminished water rights, but that assumes damage to one of the world’s largest freshwater reserves.

    Reply
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  8. barbarasimila

    Haul roads from the lumber companies are bad enough, and they’ve destroyed our brookie habitat in many places where I used to fish years ago. Now, let’s leave it to the Company to decide our future. Not this time.

    Reply

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