Bill favors GTac, promises new jobs

On December 8, Gov. Scott Walker and the Republican-led legislature proposed a new mining law that would separate some regulations for ferrous (iron) ore from those for non-ferrous (copper, gold and zinc). The bill would streamline the permitting process for companies interested in expanding existing or opening new mines in Wisconsin, including Gogebic Taconite (GTac),  which has proposed a new strip mine in Iron and Ashland counties.

What’s in the bill

There are three major changes, which apply specifically to iron ore mining but don’t affect current non-ferrous regulations. First, the state would impose a strict 360-day limit for the DNR to approve or deny an iron mining permit once a complete application is filed. If there is no decision, the application is given a “presumptive approval.” Currently there is no time limit on the DNR to review mining applications.

Second, the legislation would set a limit of $1.1 million to be paid by the applicant to cover the cost of an environmental impact study for the mine.

Finally, the new law would reduce the amount of citizen input on mining applications from two public hearings and a contested case (where sworn testimony and cross-examinations can be conducted) to one public hearing and no contested cases.

Questions about due process, long-term impact

Proponents of the 360-day time frame say this would give mining companies certainty on their time and monetary investments, allowing them to plan effectively.

Opponents say 360 days is not enough time for the DNR to do the extensive studies and testing needed to ensure water quality, wetland compliance and other environmental regulations. The new state laws would not override federal law, leaving Army Corps of Engineer and EPA standards in place.

Bill proponents see the current 2-3 hearing process as a roadblock to quick decisions on permits, while opponents see the elimination of public input as a way to gloss over potential problems with a permit and limit expert testimony.

And the monetary limit on environmental impact studies leaves the state open to absorbing additional costs, according to opponents. Mining proponents say they are trying to reduce the costs to mining companies to make Wisconsin more attractive to them.

These arguments came to a head last Wednesday in Milwaukee, during a public hearing of the Assembly Committee on Jobs, Economy and Small Business. While the hearing was scheduled to discuss the changes in the law affecting the process of issuing permits for iron mines in Wisconsin, most discussion focused on one project: the Gogebic Taconite mine proposed for the Penoke Range between Hurley and Mellen in Iron and Ashland counties.

The location and speed of the hearing also raised questions with both proponents and opponents of the bill. Why was a hearing about iron mining occurring in Milwaukee, 350 miles away from the nearest ore deposit? And who authored the bill, which was introduced as being written by the committee, but without any input from the Democrat members?

State Rep. Mary Williams (R-Medford) said Milwaukee was a logical location for the hearing, since southeastern Wisconsin is home to two major mining equipment manufacturers. She added that the bill was written by “the committee” with input from the DNR and mining experts.

But Glen Stoddard, an attorney for the Bad River Band of Lake Superior Chippewas, asserted that an initial draft of the bill was authored by Gogebic Taconite and Cline Group, the owners of the mining concern. Williams said there had been numerous changes from that initial draft before the final bill was presented.

Gogebic Taconite (GTac) plans to use strip mining to extract 800 million tons of iron ore from a deposit stretching southwest of Hurley to Mellen. GTac officials said they will use new mining techniques, including magnets, to extract the iron from the ground, but sulfides and copper are also present in the deposit, which could cause damage to the watershed and ground water.

Hope for a job-hungry region

Williams said the new legislation will help create jobs – 300 to construct the mine, 700 to operate the mine and another 1,500 in support industries and increased businesses in the 12-county region surrounding the site. Additionally, jobs could be created in Milwaukee at Caterpillar and Joy Global, both makers of mining equipment and shovels.

Jobs and the potential economic benefits of the GTac mine were the focus of proponents for adopting the new legislation. David Ward, president of Madison-based NorthStar Economics, Inc., presented an economic impact study paid for by GTac. He said that in addition to the jobs created, the mine would provide $604 million in total annual economic impact in the 12-county region and generate $17.5 million in annual state and local tax revenue over the 50-year life of the mine.

In the short term, according to Ward, the 2-year construction period would add $2 billion in economic impact to the region and $20.6 million in additional taxes.

Ward said there is an increased demand for iron ore worldwide, but offered no opinion on the bill or the environmental impacts of the mine. He said his task was to determine the economic impact of a new mine on the region and not if mining was the best driver for economic growth.

“If you’re looking for the next Microsoft to start up in Hurley, you will be waiting a long time,” Ward said. “Wisconsin’s educational attainment is 75% high school graduates, who need economic opportunities that are more blue collar. Wisconsin tries to get into high tech industries, but we’re really a state that produces things.”

Unemployment in the area is higher than the state and national averages (8.4-percent in Ashland, 9.2-percent in Iron), with few jobs outside the service and tourism industries, and an aging population. So the potential of 1,000 new jobs, new tax dollars and new life for a dying region is welcome.

John Senda, chairman of the Iron County Republican Party, said this issue is not partisan, adding that he and his Democratic counterpart signed a declaration in support of the mine. Instead it is all about jobs.

“In Mercer, where I live, we have 10- to 14% unemployment. The average per capita income is $19,000, well below the poverty level. Sixty percent of the jobs are in tourism but those are minimum wage, which leads people to obtain government assistance,” Senda said. “This is the state of my community.”

“We have a rich iron ore deposit in our county and we can’t touch it. Why?” Senda asked. “The DNR protects our environment. We believe in that too, but we need a compromise between industry and the environment.”

Shirl LaBarre, a Hayward plumbing and well-drilling business owner and leader of an effort to recall State Sen. Bob Jauch for his cautiousness on the mine, told the committee that mining has occurred in the region for over 100 years and “the water is clean and the trout don’t glow.”

“We want to make a living and we want you to make good decisions,” she said. “We tired of struggling.”

Environmental impact

But the environment and perceived lack of protections in the new bill are a concern for Democrats on the committee, as well as DNR and Army Corp of Engineers personnel and the tribal nations located within the watershed of the proposed mine.

State Rep. Penny Benard Schaber (D-Appleton) was the leading voice in favor of maintaining the current, unlimited time frame for DNR review of mining permits and a full slate of public hearings.

Army Corp of Engineers representative Rebecca Graysert agreed with Benard Schaber’s position, saying she found many flaws in the proposed legislation.

She said the ACOE typically takes two to four years to review a mining application, with some taking longer when more information is required from mine operators. Graysert said the $1.1 million limit on the applicants cost to conduct an environmental impact study (EIS) is unrealistic. In Minnesota, she said, EIS’s have cost anywhere from $300,000 to $14 million, depending on the size of the proposed mine.

For a mine the size of the GTac operation, Graysert estimated an EIS would cost $2-3 million. Whatever was left covered by the $1.1 million paid by the permit applicant could come out of the state’s general purpose fund, according to some committee members.

Graysert asserted that even if Wisconsin made changes to its mining permit process, it would not override federal requirements or tribal intervention.

“Plus the idea of presumptive approval is not included in the federal requirements, or in Minnesota or Michigan,” she said, asserting that if no Wisconsin mine could open under the proposed guidelines without violating federal laws.

Bad River Band of the Lake Superior Tribe of Chippewa Indians Chairman Michael Wiggins, Jr. told the committee that the policy in the proposed bill to place economic or public interests above those of the waters and environment was unreasonable.

“It is a giveaway of the natural resources of Wisconsin,” Wiggins said.

He reminded the committee that at an informational hearing in Hurley on the subject of mining (held in October, two months before the bill was introduced), citizens “wanted the mine but they also wanted a balance with the environment.  This legislation hardly resembles balance.”

“Wisconsin has been the leader in environmental protections and stewardship,” Higgins said. “But today we heard the DNR defer to the Federal regulations because the state laws will be loosened. That is not leadership.”

Red Cliff Band of Lake Superior Chippewa Vice Chairman Marvin Defoe questioned the importance of placing industrialization above humanity. He said the need for jobs is great within his tribe, which has a 60 percent unemployment rate, but the need for clean water, fresh air, fish and birds is more important.

“We would rather have clean water than jobs,” he said.