September 2015 Newsletter
September 11, 2015
Dear WRPC Member,
WRPC’s fundraiser was a partial success. Thanks to many generous contributors, we raised $16,000 toward our $20,000 debt from our Clean Water Act lawsuit against Rio Tinto. We still owe $4000 so if you missed our summer fundraiser, your contribution, in whatever amount, can still make a difference.
GTac is gone but attempts to resurrect mine proposal continue
Gogebic Taconite (GTac) has withdrawn its mine application for its ill-conceived proposal for mountain top removal of the the Penokee Hills but the owners of the mineral rights for the property where the iron ore mine was proposed are trying to find another mining company interested in the site (see http://host.madison.com/news/
Officials of La Pointe Iron Co., one of the owners of the property, met with Iron County officials to discuss the possibility of resurrecting the failed project. There was no attempt to include any of the groups or tribes that had successfully opposed the GTac project.
Penokee Hills iron ore has become a “stranded asset”
With GTac’s abandonment of the Penokee Hills iron mine proposal the owners of the mineral rights are understandably concerned that their investment may become a stranded asset, or an investment that has suffered a serious devaluation because of changing economic and environmental challenges and is no longer able to earn an economic return. Even with the iron mining law, written by GTac and representatives from the governor’s office, which exempted the company from strict environmental regulations, this project faced insurmountable environmental, technical, economic and social challenges.
The extensive wetlands and asbestiform fibers of the Penokee Hills are not going anywhere
Do the officials of La Pointe Iron Co. or Iron County Board members think that the extensive wetlands at the site are going to become less extensive if a new mining proposal is put forward? Do they think the asbestiform fibers discovered in rock samples from the Penokee Hills at the proposed mine site are going to disappear in the near future? According to the latest research by Northland College associate professor of geoscience Tom Fitz, the greatest amounts of hazardous materials have been found near Mellen, the site of the proposed open pit iron mine (“Researcher finds more asbestos-like fibers in Penokee Hills,” by Danielle Kaeding, Wisconsin Public Radio, 8/18/15).
The low-grade, less accessible iron ore of the Penokee Hills is not a profitable investment in a global economy
Do they really believe that the cost of extracting low grade ores from a steeply dipping deposit is going to be profitable when higher grade and more accessible ores in Minnesota are being shut down? U.S. Steel has announced 680 layoffs at its Minntac plant, the biggest iron mine on Minnesota’s Iron Range. Another 400 workers have been laid off from U.S. Steel’s Keetac plant in nearby Keewatin.
Beginning in 2014, iron ore prices fell from $135 per metric ton to $72/mt. This price decline coincides with increased production in the industry, resulting in a growing surplus of unwanted production. Goldman Sachs predicted that “the mountain of excess ore is likely to grow from 43 million metric tons in 2013 to 260 million metric tons in 2018, while Morgan Stanley forecasts that the glut may grow to be even higher – as much as 437 million metric tons in three years.”
(“Market Slump Slows Africa’s Iron Ore Project Growth,” Engineering and Mining Journal, August 2015). The world iron ore market will be characterized by oversupply for at least 1-2 years to come. “Prices will probably not increase by much over the present level for the next few years considering that new projects will further add capacity to an industry already in oversupply.” (“Iron Ore Market Review 2014: Prospects Persist for Oversupply and Weak Prices” Engineering and Mining Journal, November 2014).
If and when iron ore prices recover, the world’s best deposits of iron are located in a zone that stretches across west and central Africa encompassing Guinea, Cameroon, the Central African Republic and the Ivory Coast. Penokee iron ore cannot be mined at a lower production cost than African, Australian, Brazilian, Chinese and Indian iron deposits.
The mountain top removal of the Penokee Hills will never receive a social license to operate
Despite large campaign contributions to Governor Scott Walker and key Republican legislators, GTac could not persuade local citizens, county boards, environmental organizations and the state’s Indian tribes that their proposed mine could be done without unacceptable harm to the water, natural resources, tribal cultures and the sustainable economy of the Bad River watershed and Lake Superior.
During the spring 2015 hearings of the Wisconsin Conservation Congress, the majority of citizens in 13 of 14 counties voted in support of resolutions to repeal the Iron Mining Law (2013 Act 1), the legislation written by GTac and representatives from the governor’s office, that gutted many of the state’s environmental protections for mining. The vote count was 685 in favor and 190 against or 78% approval.
Time to renew your membership?
If the date on your mailing label is anytime before 09/15, it means your annual membership is due ($15 for regular or $5 for senior/low income). When you renew your membership, please consider an additional donation for WRPC’s court costs. Thanks for your support in our effort to protect our precious waters.
Stay tuned,
Al Gedicks, Executive Secretary
