Steven Walters
The State of Politics

Gogebic Mine Dies Without a Whimper

After all the controversy, it’s been killed, with barely a word from partisans on either side. Why?

By - Mar 9th, 2015 11:07 am
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During the height of the controversy Gogebic Taconite  had armed guards protecting the site of the proposed mine. Courtesy of Rob Ganson.

During the height of the controversy Gogebic Taconite had armed guards protecting the site of the proposed mine. Courtesy of Rob Ganson.

That tree in the forest that fell, and didn’t make a sound?

A similar thing just happened in Wisconsin: A controversial plan for a 1,000-foot-deep, 4-mile-long open pit iron mine died, and Capitol politicians paused, said little or nothing and returned to their partisan sniping on other issues.

Let’s make one thing clear: This is not – not! – an argument for developing the huge Gogebic Taconite mine in Iron and Ashland counties. Instead, it’s a political autopsy for a controversy that once rivaled the 2011 fight over Act 10, yet now has disappeared with barely a word spoken about it.

In a Friday, Feb. 27, late-afternoon statement, Gogebic Taconite President Bill Williams said the company was dropping the mine proposal. “Our extensive environmental investigation and analysis of the site has revealed wetland issues that make major continued investment unfeasible at this time,” said Williams, who did not respond to a request for an interview last week.

The statement also cited uncertainty in the wake of a U.S. Environmental Protection Agency restriction on the proposed Pebble gold and copper mine in southern Alaska. It was unclear how that EPA decision cast a scientific shadow over Gogebic’s proposed Wisconsin mine.

Gogebic’s shelving of the mine means hundreds of jobs won’t be created in northwest Wisconsin, which desperately needs them. It also means no Gogebic mine sales by Milwaukee-area manufacturers of that equipment.

Dozens of special-interest groups, and federal, state and local agencies and governments, had a stake in the Gogebic mine. The legal fights over it would have lasted for years.

Regulators, for example, included the state Department of Natural Resources, which allowed test borings last year and would have had to issue a formal mine permit; the U.S. Army Corps of Engineers, which would have conducted its own review, and the Bureau of Indian Affairs. The neighboring Bad River Tribe said the mine threatened the headwaters of its water and air quality.County and local government leaders also extensively debated the mine, and whether and how to regulate it. A few months ago, Gogebic deemed Ashland County governments unfriendly and dropped plans to mine there. Candidates for the Iron County Board of Supervisors ran on pro- or anti-mine platforms.

“We’re very, very happy the battle is over,” said Joe Barabe, Mayor Mellen,  who said last week he could see the equipment used to dig the test borings from the vantage point of Mellen City Hall. Barabe expected the mine to did: “I think it was dead a year ago.”

In the Capitol, the fight over a mining deregulation bill — that Gogebic said was needed in order for the company to develop a mine — lasted for years.

One vote – cast by ex-Republican Sen. Dale Schultz – first killed the bill. But it became Senate Bill 1 in the 2013-14 session after Republican Sen. Rick Gudex had ousted a Democrat. Gudex cast the vote that passed it.

When it passed the Legislature, Republican Gov. Scott Walker issued this statement: “On behalf of the unemployed skilled workers in our state who will benefit from the thousands of mining-related jobs over the next few years, I say thank you for passing a way to streamline the process for safe and environmentally sound mining in Wisconsin.”

Two years later, after Gogebic shelved the mine, Walker aide Laurel Patrick issued this statement on behalf of the governor: “It’s unfortunate that the federal requirements for mitigating wetlands make it cost prohibitive for Gogebic to move forward at this time.  We remain committed to working with companies interested in creating quality, family-supporting jobs in Wisconsin.”

Last year, legal documents disclosed that Gogebic Taconite donated $700,000 in 2012 to help Walker and a few Senate Republicans survive recall elections. Mine opponents called the donation, and Walker’s push for the deregulation bill months later, a classic “pay to play” deal.

When asked about Gogebic killing the mine, the two Democratic legislators who represent the site – Sen. Janet Bewley and Rep. Beth Meyers – said the same thing: Let’s move on and find ways to create family-supporting jobs. Iron County’s unemployment rate exceeds 10 percent.

And on March 2, when DNR Secretary Cathy Stepp appeared before the Legislature’s budget committee, she was not asked one question about the Gogebic mine.

In an interview with WisconsinEye last Friday, former DNR Secretary Scott Hassett said he wasn’t surprised that Gogebic shelved the mine project. Hassett, an attorney, said he thought that the Bad River Tribe would have had a strong legal case against the mine, arguing that it threatened reservation water supplies and air quality.

Maybe one veteran lobbyist, who did not work on the mine bill but whose cottage is a few miles from the site, summarized the controversy best: “It never was real.”

Steven Walters is a senior producer for the nonprofit WisconsinEye public affairs channel. Contact him at stevenscwalters@gmail.com

8 thoughts on “The State of Politics: Gogebic Mine Dies Without a Whimper”

  1. Rich says:

    It’s unfortunate that the federal requirements for mitigating wetlands make it cost prohibitive for Gogebic to move forward at this time.

    Oh, so this is why Walker is running for president…So he can decimate the EPA (and anything else responsible for those pesky environmental laws).

    Oh, and by the way, world iron prices collapsed too and another proposed mine in Canada wasn’t built either.

  2. PMD says:

    What is the cost?

  3. Bill Kurtz says:

    What is the cost? We sold out our environmental laws for $700,000 to get the mine and jobs. Now no mine, no jobs, and no integrity either.

  4. PMD says:

    I am curious about the cost because this is a company that drops $700,000 on a donation and presumably has hundreds of millions if not billions in revenue, so I wonder exactly how they define cost prohibitive.

  5. burroak says:

    GTac isn’t officially gone until it withdraws its intent to apply for a mining permit and that fact has tempered the response somewhat. GTac treated the proposal as a junior mining company, spending only what was necessary and doing only a little work to make it appear feasible to outside investment and/or purchase. GTac and legislative supporters were up front about the need for investors during the runup to the passage of GTac’s pet law, 2013 Act 1; they needed the “certainty” in the law to attract outside $. GTac also faced tens to hundreds of-millions in costs for study and analysis to support the mining permit this year. Federal permitting would have taken much longer than the new state process – something the Army Corps of Engineers was clear about during debate over Act 1. All that along with overwhelming public opposition, a low-quality iron deposit and a poor steel market at least a decade in the future lead to the timing of the departure.

  6. Robert R says:

    The writing has been on the wall for awhile. GTAC really came across as amateurs. Amateurs with some political levers and money to throw around, but they seemed ill prepared to come to Wisconsin. The jokers were actually surprised about the extent of wetlands, that there might be asbestos in the rocks, and that even the most supportive legislator would object to closing off tens of thousands of acres of forest land from hunters.

    And, of course, iron ore futures have tumbled over $100/ton and there’s a surplus of iron ore on the market.

    They never did the exploration necessary to be taken seriously. And they quit doing monitoring last summer, apparently fall in Wisconsin was too extreme for them, which for anybody who’s ever worked construction or hunted, which obviously didn’t include journalists at MJS or WSJ, would know that’s a lame excuse. You can’t work during the driest and most temperate time of year? Who are you fooling?

    I don’t know what GTAC’s game was, but iron mining didn’t seem to be something they had a clue about.

    And, let’s face it, if the iron ore in the Penokees was easy to get at, it would have been mined long ago. The fact that it hasn’t been mined should tell everyone that it’s a difficult proposition for the best and most experienced of firms. It’s certainly not going to get mined during a glut of ore and plummeting prices.

  7. Kent Mueller says:

    The nature of the beast. I knew they weren’t completely committed when they spent only 3 million on lobbying and buying politicians. The commodity price of iron has dropped a lot during the last few years. A project like this is always subject to a balance of demand, supply and commodity price. A new, more profitable field in South America, Asia or Australia could have as easily knocked it off the table and maybe did.
    It’s ironic (heh) that mineral wealth guys are so geared to short term profit when the business involves pulling together the planning, equipment and facilities with 5-10 years lead time before you turn a shovel. The regulations are just something that gives your lawyers something to do in the mean time. Doesn’t help that techs like engineers are trained to design for maximum profit with minimal regulatory compliance. Best practices would go a long way to solve all their problems, they could get ahead of regulation and make good money doing it, but it would go against their nature.

  8. Mcarey says:

    It seems whenever things don’t work out for Walker and the republicans they blame someone else, in this case the federal government. Walker took their money did his best to loosen the rules to accomodate whatever they wanted in regards to gutting environmetal law for them and they still didn’t produce. Perhaps Walker should have thought this through better in the beginning and avoide all the disagreements it caused. Of course he wouldn’t have gotten the $270,000 donation which he simply couldn’t pass up so doing what was right in the first place was not an option. Seems like he lied to the mine operators in that regard, and probably the citizens of the affected counties that jobs would ome from this,, limited though they would be for the area. Lot’s of skilled miners nationalyy. I’m guessing not so many in Wisconsin, which hasn’t had a strong mining industry for some time. Good paying jobs were probably going to out of statee workers for the most part.

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