Eagle, Earnings and Eminent Domain

Lundin Mining CEO Paul Conibear seems to have expected questions about the Eagle Mine on this morning’s Q4 2013 earnings call. At the outset, he announced that Senior Vice President Paul McRae was on hand to answer any questions about Eagle analysts might have. But to my surprise there was not a single question about Eagle. Analysts seemed content to rely on the company’s guidance.

Conibear sounded an optimistic note. Despite a “brutal winter,” he said, Eagle is fully on track for production of nickel and copper concentrates by the end of 2014. Underground drilling at the mine proceeds apace, and the mill is “a beehive of activity.”

Neither he nor McRae were called upon to address transportation at the mine, which is still unresolved and may soon run into new legal challenges.

At the start of this week, the Marquette County Road Commission announced that they “can” – or at least they “plan” — to use eminent domain to seize property for County Road AAA. This came as a surprise to some people at the hearing and to the owners of a piece of land along the AAA route known as the Hingst property. The Hingst are not interested in selling. So whether the Road Commission can do what it plans to do may be left for the courts to decide.

The analysts on this morning’s call seemed either unaware or unconcerned that Eagle’s haul road might be delayed by litigation – or that the route between the mine and the beehive of activity at the mill is approaching a legal crossroads. Of course, Lundin Mining has deep pockets and can continue to fight legal challenges as they arise; but eminent domain controversies are not always easily or speedily resolved and the county may not have the stomach for protracted litigation over property rights and the divisiveness it can create.

You wouldn’t imagine that anything can stand in the mining company’s way from local news coverage of the AAA road. Interviewed by Molly Smerika of ABC10 News, Marquette County Road Commission Engineer Manager Jim Iwanicki tried to tout the public benefits of the AAA, advancing the disingenuous argument that the haul road will be a “public road, for everybody”; and Smerika didn’t bother to ask what he meant by that, or just how the Eagle Mine trucking route will serve the public good.

Smerika even gave Iwanicki a pass on the specious claim that the local “tourism industry” will benefit from the 55 MPH haul road. What could be more relaxing than a high-speed drive in heavy truck traffic? Spectacular roadkill the whole family can enjoy.

In that same interview, Iwanicki mistakenly calls the mining industry a “benefactor” of the AAA road. He clearly meant “beneficiary,” but it’s a telling slip. Lundin has taken over where Rio Tinto left off, as the chief if not the sole driver of infrastructure development and, it appears, public policy in Marquette County. After the CR 595 fiasco, the Road Commission seems determined to deliver for the mining company; but until the county takes the Hingst property, there is still room for doubt whether the confident guidance on the Eagle project we heard this morning is fully warranted.

One thought on “Eagle, Earnings and Eminent Domain

  1. Pingback: Northern Exposure | lvgaldieri

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