Tag Archives: reverse osmosis

Northern Exposure

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Investor Bill Foote says he’s “looking at Lundin Mining for exposure to nickel ore,” because he thinks that Vladimir Putin might restrict the supply of nickel to the world. The standoff over the Crimea may send ripples across Lake Superior, where Lundin’s Eagle Mine is scheduled to go into copper and nickel production by the end of 2014. Eagle will be the only nickel mine operating in the United States, at least until the mining boom around Lake Superior really gets underway.

Foote and those considering his advice on nickel exposure should take note that the Eagle project may be on schedule, but still faces a number of obstacles. First, Lundin has not yet managed to build a haul road from mine to mill, and won’t until Marquette County seizes the Hingst property using eminent domain. That could get messy. In the meantime, Lundin will haul its ore around and through the city of Marquette. That will, at the very least, test the patience of its citizens. Oddly enough, Lundin CEO Paul Conibear touted the good roads and transportation routes around the mine from the moment Lundin acquired the Eagle Mine from Rio Tinto. Was he misled by the mining giant? Did he and his team fail to perform due diligence before making the largest acquisition in Lundin’s history? I doubt he would deliberately mislead investors.

It would be worth asking what due diligence was performed when it comes to the technology in place at the Eagle Mine as well. Debasish Mukhopadhyay, a Palo Alto based inventor who has licensed water purification technologies to General Electric, Intel and Aquatech, has brought a lawsuit against Lundin for “willful” infringement of his patented method of reverse osmosis. The trouble goes back to 2011, when Rio Tinto’s Kennecott Minerals awarded Veolia Water Solutions and Technologies a contract for building a wastewater treatment plant at Eagle Mine. Veolia installed its Opus reverse osmosis technology, which Mukhopadhyay claims infringes his patented process. No matter how the dispute will be settled — and the last news story I saw suggested that Debasish Mukhopadhyay wants a jury trial — there is a question whether this was looked into (and, if so, why it was not resolved) before Lundin purchased Eagle from Rio Tinto.

It’s not as if the reverse osmosis process is just some obscure, behind-the-scenes machinery, the stuff that only mining engineers and wastewater treatment geeks worry about. Most people living around Lake Superior have probably heard of reverse osmosis by now. At Eagle and in discussions of the Polymet project in Minnesota, reverse osmosis has been repeatedly promoted as a twenty-first century solution to the risks of sulfide mining. It’s central to what Steve Timmer calls the “miracle of immaculate extraction” and to the mining companies’ claims that they are going to mine responsibly and sustainably — whatever “sustainable” means when it comes to extracting ore from the ground. You’d think someone would have asked some hard questions about the high-profile technology and intellectual property Rio Tinto was selling along with Eagle, or tracked down Mukhopadhyay, who is hardly unknown in water treatment technology circles, if only to solicit his expert opinion on the reverse osmosis process used at the mine. Apparently no one did.

When uranium was detected in the water at Eagle last year, Kristen Mariuzza expressed her confidence “in the system and the methods being used to ensure that only clean water is released back into the environment”; and the Rio Tinto press release in which she was quoted held up reverse osmosis as one of the “two methods are recommended by the EPA for removal of uranium from drinking water.” (Elsewhere, reverse osmosis has been likened to the benign process used to produce bottled water.) There’s no doubt Mariuzza knows her stuff when it comes to reverse osmosis; and it’s surprising she was not familiar with the shady provenance of the Opus technology: after all, she was the Michigan DEQ official who reviewed and signed off on Rio Tinto’s wastewater treatment plans — before she stepped through a revolving door and went to work for Rio Tinto.

There will continue to be litigation around Eagle Mine’s groundwater discharge permit, which comes up for renewal this year. Four plaintiffs — Yellow Dog Watershed Preserve, National Wildlife Federation, Keweenaw Bay Indian Community, and the Huron Mountain Club — have charged that in 2007 the MDEQ approved an application that did not satisfy Part 632 of the Michigan Non-Ferrous Metallic Mining Law. As Mindy Otto cannily notes over at her blog, “it is clear that the 2007 groundwater permit standards set by the MDEQ are not suitable to regulate groundwater quality, and Eagle Mine LLC would likely agree”: that’s why they’ve asked the DEQ, this time around, to relax the water quality standards of the original permit, to accommodate or excuse their exceedances.

Of course it’s possible that Lundin went into this project with eyes wide open, fully aware of the permit litigation it was signing on to, ready to prevail against the patent-holder of its reverse osmosis technology or cover whatever costs a Mukhopadhyay lawsuit might entail, and confident that the Marquette County Road Commission would eventually bend and give the mining company its haul road. Maybe that’s just the cost and the risk of doing business. It’s at least equally possible, of course, that these are unforeseen complications, in which case they suggest a troubling pattern. Investors like Foote might wish to do a little due diligence of their own, lest their investment in Lake Superior mining expose them to a lot more than the ups and downs of the global nickel market.

Update 8 April 2014: Yesterday the US Supreme Court declined to intervene in the dispute over the permitting process, rejecting the Huron Mountain Club’s appeal of a decision by the 6th U.S. Circuit Court of Appeals.

Update 9 April 2014: Debasish Mukhopadhyay has voluntarily withdrawn his patent-infringement lawsuit. “Court documents did not indicate why the suit was dismissed.” In the past week alone, Lundin has cleared two significant legal hurdles. My more general question about due diligence stands.

Update 4 June 2014: Eagle Mine has not yet overcome all legal hurdles. The Michigan Court of Appeals yesterday heard oral arguments over the permitting process in National Wildlife Federation v. Michigan Department of Environmental Quality.  An Eagle Mine press release made all the predictable statements and reassurances, and the local news station, ABC10, dutifully ran it without question or comment. The trial also brought over 500 members of the Keweenaw Bay Indian Community to Lansing — the most attendees ever recorded at a Michigan Court of Appeals hearing, according to Yellow Dog Watershed Preserve.

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.