Tag Archives: boom and bust

Social License in a Less Exuberant Climate

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The things I’ve written on the new mining around Lake Superior — most of which are gathered here — might amount to nothing more than a series of postscripts to my film 1913 Massacre. P.S., then P.P.S, and so on, a long envoi or send off, I suppose, or maybe a recognition that the story we told in our film never really ended, or is about to be repeated — first time tragedy, second time: it’s still too early to say. In any case, I’ve often been struck by the ways that the new mining appeals to the very history (or what people in the UP call their mining “heritage”) Ken and I encountered while making our film, in order to claim social license.

While I’ve focused on developments around Eagle Mine, which is situated on the Yellow Dog Plains just outside the city of Marquette, Michigan, I’ve also been trying to keep track of mining activity all around the lake — the Polymet and Twin Metals projects in Minnesota, the failed Gogebic Taconite project in Wisconsin, uranium exploration on the Eastern shore, and so on; and I’ve tried to emphasize here and when talking about the subject that Eagle along with those other projects constitute the first phase of a Lake Superior mining boom.

With no effective international oversight of the lake — one of the largest bodies of freshwater in the world — the mining companies have moved in, facing down what opposition local groups can muster, promising jobs and economic development, exploiting loopholes in state laws, and buying state politicians (as Gogebic bought Scott Walker) or enlisting the services of other lackeys and lickspittles in local and regional government (as, e.g., Eagle seems to have enlisted the services of the Marquette County Road Commission).

A larger commodities boom (or pricing bubble) ushered in this Lake Superior mining boom, and that bigger boom has started to go bust, as Chinese demand for stainless steel, copper and other metals — one of the main drivers of the boom — slows. So the story ripples out way beyond the lake, to developing economies on the other side of the world, and to a larger arena of commodity markets, over which huge commodity traders like Glencore and Trafigura preside, and where the metals mined around Lake Superior are not actually used to make things the world needs (as mining companies want us to believe), but warehoused by the London Metal Exchange and financialized in complex instruments like ETFs or simply as collateral.

It’s unlikely we’ll witness the great unraveling of this global complex that some doomsayers predicted, but the slowdown has already left some miners stranded and made some projects founder or at least become riskier to undertake. Shareholders are already feeling the pain and pressures on companies to streamline operations, discard assets or service their debt will continue to mount. On the ground, these troubles should occasion some reflection on just how closely mining, global financial markets and development are now intertwined; and that volatile combination is likely to make the future for communities around the Lake even more uncertain. How committed are these companies? Whose interests do they really represent, and to whom do they answer? How resilient are they? What happens when things fall apart?

Maybe in this less exuberant climate, all the confident assertions about future prosperity, tributes to mining heritage, promises of responsible stewardship, and bids for social license to undertake mining projects will receive closer scrutiny.

Postscript: after a response from Eagle Mine’s Dan Blondeau, I’ve updated this post with a link to our exchange over my remarks here on the Marquette County Road Commission. The Michigan DNR’s green-lighting on Thursday of Graymont’s proposal to develop 10,000 acres of public forest lands into an open pit and underground limestone quarry is yet another example of Michigan public officials eagerly serving mining companies — or doing their bidding, sometimes without having been explicitly bidden.

A Mining Renaissance?

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On the Almanac program I discussed in yesterday’s post, Kathryn Hoffman cited “42 exceedances of water quality standards” at Eagle Mine to make the point that reverse-osmosis technology isn’t as effective as mining proponents in Minnesota make it out to be. I was expecting some rundown of those exceedances in Codi Kozacek’s January 8th article about Eagle Mine on Circle of Blue; but Kozacek focuses, instead, on the Eagle Mine water-monitoring agreement Rio Tinto struck with Superior Watershed Partnership and Land Trust two years ago.

It’s not hard to see why. Kozacek seems to have traveled from Hawaii (where she’s based) to the UP to do some interviews and take some photographs: it appears she was there in summertime. But so far as I can tell she’s based her article on a “case study” jointly commissioned by Rio Tinto and the Superior Watershed Partnership, a piece of bespoke research entitled Unity of Place: Giving Birth to Community Environmental Monitoring.

In fact, the opening of Kozacek’s article documenting – or should I say celebrating? — this “unprecedented” water-monitoring agreement seems to be nothing more than a loose paraphrase of that publication, which tells the story of how the community around Eagle Mine gained “a measure of power over the mine. And it was Rio Tinto that gave it to them.”

Leave aside for the moment the preposterous idea that that power was Rio Tinto’s to give in the first place: the Unity of Place case study simply asks us to accept that business can and will decide the power society has over it, and Kozacek seems untroubled by the notion. That Rio Tinto sold Eagle Mine to Lundin Mining after descending from the heights to strike this unprecedented power-sharing agreement with the little people living around the mine does not give her pause, or raise questions about the mining giant’s good faith or much-touted commitment to the community around Eagle; and Kozacek only gets around to mentioning the sale to Lundin 28 paragraphs into her 34-paragraph story.

For the sake of balance, she includes a couple of interviews with “skeptics,” people who remain, to this day, distrustful of the water monitoring agreement but express the hope that it will have some good effect. She mentions the uranium leakage discovered at Eagle last year, which she offers as proof of the success of the program in alerting “the public to potential water quality threats,” quoting the Superior Watershed Partnership’s Jerry Maynard (who is also featured prominently in Unity of Place): the monitoring program, he says, “is gaining the trust and respect of the community….We want this to get out there—we want other mining communities to say ‘we want this too.’” But she fails to mention any other exceedances or violations – I guess she missed that episode of Almanac before filing her story — and apparently didn’t bother looking into the new water story now unfolding around Eagle Mine: the renewal of the mine’s groundwater discharge permit. (Michele Bourdieu has that story over at Keweenaw Now.)

My guess is that Kozacek is unfazed by any of these questions and complications, because the real story she wants to tell here is the story of a mining “renaissance”: she uses the word a few times in her article, once as a header and then twice in the body:

The Eagle Mine is viewed as either on the leading edge or the troubling future of a mining renaissance in Michigan’s Upper Peninsula, a region that has seen more mining bust than boom in the past 50 years. Just as in the oil and gas industry, improvements in mining technology are making previously overlooked ore bodies economically attractive. Rapidly developing countries, particularly China and Brazil, are driving demand for iron, copper, nickel, silver, and gold.

But many of the once booming mine communities in the U.P. and northern Wisconsin, operating with a fraction of their historical populations and downtowns darkened by empty storefronts, are eager for a mining renaissance.

Not a return of mining. Not a re-opening of the mines. Not a new mineral leasing, exploration and mining boom (which would have to be followed by yet another bust). A mining renaissance. It’s an odd word for someone writing about water issues to choose. I wonder if the ungainly use of the word “birth” in the subtitle of the Rio Tinto-Superior Watershed case study inspired Kozacek here: with the “Birth” of “Community Environmental Monitoring” advertised on the cover and on every recto page of that pamphlet, why not imagine a rebirth – and wouldn’t the word “renaissance” be so much more elegant? – of mining?

MinersAtVillanders

Renaissance miners, in the early 16th-century stained glass window of the Villanders parish church.

It’s at best an ugly parody of historical discourse, but I take it that it’s intended to give the new mining around Lake Superior a historical stature that it would otherwise seem to lack. In the second of the two paragraphs I’ve quoted here, Kozacek even imagines the area longing to emerge from a kind of Dark Age, or at least “darkened” downtowns, into renewed prosperity.

But in the first of those paragraphs, I must admit, she does a pretty good job of spelling things out. New extractive technologies have made it not only possible but “economically attractive” (read: highly profitable) for large multinational players to mine previously neglected or abandoned ore deposits, extract oil from tar sands and drill for natural gas by fracking. Chinese urbanization and rapid development in the BRIC countries continue to drive and raise demand for minerals and fossil fuels, as economic power shifts away from developed, Western economies.

Communities in the Upper Peninsula and all around Lake Superior are now feeling the pressures of these bigger changes. Whether they will bring renewal — or more boom and bust, or just catastrophic demise – is another question altogether.

Labor Day, 2013: Will Big Mining Do Better This Time Around?

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On Labor Day, I’ll be in New York City, so I won’t be able to see the television broadcast premiere of 1913 Massacre on Twin Cities Public Television. How many will tune in? How will the broadcast cut of the film look and play on TV? Above all, I wonder, what connections will the Labor Day TV audience draw between 1913 and 2013? My comments here run this holiday weekend on MinnPost.

Many people Ken and I met in mining towns around Lake Superior while filming 1913 Massacre urged us to see the positive contributions the mining companies had made to the region. Some insisted that the Woody Guthrie song that had introduced me to the story of the Italian Hall disaster and brought me to Calumet and the Upper Peninsula in the first place had gotten it all wrong. The greedy bosses, company thugs and violent social strife that Woody sang about in “1913 Massacre” did not fit the story they knew. “We all got along just fine,” they protested.

When the mines were running, the towns thrived. The big department stores downtown were open. The churches (and the bars) were packed to capacity. Everybody worked hard and the work was sometimes dangerous, but on Saturday nights, the streets were jammed and the atmosphere festive. The company put a roof over your head then sold you the house at terms you could manage. The copper bosses built libraries, sidewalks and schools, gave land grants for churches, and even furnished luxuries like bathhouses and public swimming pools. The men who ran the mines weren’t just robber barons from Boston; they were public benefactors.

But there were limits to their benevolence. The mining captains regarded the immigrant workers – Finns, Slavs, Italians — as charges placed in their paternal care. They knew what was best for these new arrivals. They discouraged organizing. Faced with strikes on the Iron Range in 1907 or on the Keweenaw in 1913, they adamantly refused to negotiate, brought in scabs to do the work and Waddell and Pinkerton men to deal (often brutally) with the strikers. Even after the tragic events of 1913, Calumet and Hecla Mining Company would not recognize the union for decades.

The Keweenaw miners were on strike again in 1968 when C & H made a calculated business decision to pull out. No more jobs, pensions cut short; the good times were over. They left the waters poisoned and the landscape littered with industrial wreckage and toxic mine tailings.

The companies driving the new mining boom around Lake Superior these days promise to do better. They are dedicated to corporate social responsibility. They practice “sustainable” mining, tout their environmental stewardship and declare their respect for human rights. They have community outreach programs and promise to make substantial, long-term investments in the economic development of the regions where they come to mine. They work closely – some would say too closely – with regulators to create environmental impact statements and plan for responsible closure of their mines. They are eager to gain social license.

For the most part, these big multinationals operate with the support of organized labor and politicians who want to create jobs — and what politician doesn’t want to do that? But the high-paying, highly-technical mining jobs are unlikely to go to local residents; and the new mining is likely to have detrimental effects on local economies, as the economist Thomas M. Power has shown in studies of Michigan and Minnesota. Mining may provide some short-term jobs, but it can also drive away creative professionals and knowledge workers, destroy entrepreneurial culture, diminish quality of life and damage long-term economic vitality.

So promises of good times and plentiful jobs need to be treated with circumspection. Polymet has repeatedly scaled back its job predictions for its huge, open-pit sulfide mining project near Hoyt Lakes, Minnesota, and the company’s own figures suggest that only 90 of the promised 360 jobs – just 25% — will go to local communities. Local is, moreover, a relative term. Mine workers today tend not to live in mining towns; they will commute an hour or more to work. And hiring will always be subject to swings in metals prices, which are now dependent on two new factors: continued Chinese growth (and urbanization) and the entry of big financial firms into metals warehousing and trading.

There are limits to big mining’s benevolence as well. The last time I flew into Marquette airport, a glossy Rio Tinto poster advertised the company’s commitment to “build, operate and close Eagle Mine responsibly.” Nobody had bothered to take the sign down after Rio Tinto had done an about-face and sold Eagle, a few months earlier, to Vancouver-based Lundin Mining for dimes on the dollar. Rio Tinto’s commitments lasted only until it was time to flip their property. Overnight, Eagle Mine had become a “non-core asset” and the surrounding community none of Rio Tinto’s responsibility.

In Wisconsin, Gogebic Taconite has drawn the line between company and community much more starkly, with help from a paramilitary firm called Bulletproof Securities. Black-masked guards, dressed in camouflage and armed with semi-automatic weapons, protect the mining company’s property from trespassers and environmental protesters. Imagine what they might do in the event of a strike.

gogebicguard

Bulletproof Securities patrols Gogebic Taconite’s property in northern Wisconsin.