Lake Superior Mining News

By Gabriel Caplett

One would be hard-pressed to find a major mining region that has left area residents and the local economy with accumulated wealth and economic stability. Consider mining regions such as the Ozarks lead district, Idaho’s Silver Valley, Arizona and Montana copper towns, New Mexico’s uranium district, Minnesota’s Iron Range and the Michigan Upper Peninsula iron and copper ranges. All remain relatively economically-depressed areas.

The idea that a mining economy is sustainable and important to the Upper Peninsula’s economic future ignores several facts about the metals industry: i), sophisticated technology has been replacing the ordinary worker, resulting in fewer jobs per mine; ii), ore deposits get depleted, resulting in zero long-term jobs; and iii), mining production is closely linked with market prices and demand for the finished materials eventually produced, causing whip-sawing boom and bust cycles.

According to the U.S. Department of Labor, the mining industry will continue to increase output long term, but expansion will be “met by new technologies and extraction techniques that increase productivity and require fewer workers.”

In 1985, the Marquette Mining Journal editorial board expressed concerns regarding the area’s  overdependence on mining:

“Because of this area’s heavy dependence on the iron ore mining industry, [iron mine] shut-downs. . .can seriously affect the local economy. . .Unfortunately, the health of the county’s economy is directly linked to the health of the domestic iron ore industry. When the industry is experiencing tough times, the economy as a whole will suffer as well. . .We hope our local government and civic leaders use the occasion to renew their push for economic diversification. . . Much remains to be done if Marquette County ever hopes to significantly reduce its dependence on the iron ore industry.”

Wishing Well

Nonetheless, many politicians, civic leaders, local media and mining industry representatives still believe the mining industry is the answer to economic hardship.

In February 2008, a more nostalgic Mining Journal editorial board wrote: “This area was built on mining and logging. A new mine would not damage the tourism aspect of the region’s economy. Local residents should remember that if it were not for mining, many Upper Peninsula communities, including Marquette, would not exist.”

In December 2007, after the Michigan Department of Environmental Quality (DEQ) approved Rio Tinto/ Kennecott’s Eagle Mine application, civic leaders piped in. The Lake Superior Community Partnership’s CEO, Amy Clickner, said, “Our proud mining heritage in Marquette County has existed in harmony with our natural beauty and recreation for over 165 years, providing the opportunity for citizens and businesses to prosper.”

Besides ignoring the obvious environmental (and resulting economic) damage caused to Deer Lake, Torch Lake, Goose Lake, the Iron River, the Escanaba River and other areas of the U.P., Clickner’s comment also ignores current reality in the U.P. and Marquette County’s economy: Our economy is not built around mining any more. Nor is it in Minnesota’s Iron Range. According to economist Thomas M. Power, “some citizens and leaders” in Minnesota’s Iron Range also believe that metal mining remains key to the local and state economy:

“This belief in the importance of metal mining [to the economy] is partially tied to the historical role that industry played in the European settlement of northeastern Minnesota.  But economic history is not usually a good guide to the economic present or future. Trying to explain current day Pittsburgh, Chicago, Denver, or Portland, for instance, in terms of steel, meat packing, ranching, or timber, respectively, would not be very useful.”

Fractions of Fractions

The change from mining dependency of the past to a more diversified economy of today has been dramatic both in Minnesota and the U.P. Only one in every 500 non-farm workers in the U.S. is employed in a metal mine. A little over one-half of 1% of all non-farm U.S. workers is employed with any type of mining, including the industry’s support services and contractors.

According to the Michigan Department of Labor and Economic Growth, in December 2008 less than two-tenths of 1% of the Michigan economy directly employed workers in “Natural Resources and Mining” (meaning mining and logging).

By Rio Tinto/Kennecott’s own projections, roughly 120 permanent jobs would be created at the mine and 50 at the Humboldt Mill. The company projects roughly 300 temporary construction jobs at the mine (most of it through foreign firms specializing in underground mine construction) and 100 at the mill, and  estimates 300-500 “indirect jobs” from the sale of snacks, fuel, tires and other services. These figures do not factor the approximate number of jobs and amount of tax revenue that would be lost in other current and future sectors as a result of the proposed mine.

Counting all of the “permanent” jobs, including the maximum for 500 “indirect” positions, Rio Tinto/Kennecott claims it could produce a total of 670 jobs. This may be true, or not. Yet, even this potentially inflated figure would provide not even 2% of Marquette County’s employment.  Additionally, Rio Tinto/Kennecott claims the 170 “permanent” jobs would be 75% “local.” So, about 130 people are projected to get “direct” Rio Tinto mining jobs.  That’s not quite four-tenths of 1% of Marquette County’s current labor base (counting the unemployed) and about three-thousandths of 1% of Michigan’s labor base. Even if all 170 jobs would be local, only roughly one in every 26,300 available workers in Michigan would

have a “permanent” job at Rio Tinto’s Eagle Mine or Humboldt Mill.  Counting the companies “indirect” figures, one in every 6,690 to 9,540 Michigan workers would have a job somewhat related to Rio Tinto’s projects.

The Quest for a Greener Planet

How does less than 1 in every 250 Marquette County workers have such influence that state and local government is able to prioritize the mine and mill project over other considerations such as long-term economic health, clean water, public health and world-class recreation?

That’s where the public relations machine of one of the world’s largest mining companies comes in. Rio Tinto/Kennecott sparked the Global Mining Initiative in the mid-1990s, and since then the mining industry has transformed its image into a “sustainable” industry where priority number one is protecting the environment and local economies.  (See Kennecott’s website, “Promoting harmony and preserving balance between people and nature” or Platinex: “the quest for a greener planet” for a couple of the more obvious examples)

Environmental Vitality

Many economists are urging a transition from industrial, extractive-based economic systems to sustainable models based upon clean water and land resources. According to Thomas Power, degradation of the environment has and will have dire consequences for future economic vitality. “Environmental quality is not just a matter of…aesthetic preferences; it is a central part of any region’s economic base and its potential for economic vitality.”

A recent Michigan State University economic study revealed that Pictured Rocks, alone, contributes at least $20 million, annually, to the local economy. A 2007 Brookings Institute and University of Michigan report has concluded that a $26 billion dollar investment in Great Lakes restoration would yield at least $50 billion in regional long-term economic benefits and an additional $30 billion to $50 billion in short-term economic activity.

Recently, Michigan has maintained a hold on the nation’s worst unemployment rate, which may be evidence enough that the state must swap its natural resource based economy for a “greener” alternative. In order to prosper again the state needs to focus on sectors that, according to the Michigan Economic Development Corporation, are actually growing, even in tough times:  health care, information technology and alternative energy – all of which offer good jobs, not “burgerflipping” jobs.

According to Power, part of an intelligent economic strategy is recognizing that protection of the environment is a central component of an area’s “economic development strategy.”  Sacrificing the natural environment to nostalgia for a perceived past “may actually be undermining the economic future of a region.”

This entry was posted on Wednesday, February 25th, 2009 at 10:24 pm and is filed under Eagle Mine, economy, Kennecott-Rio Tinto, Michigan. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.