By Kathleen Foody
Gannett Wisconsin Investigative Team
April 1, 2013

Iron mines are enormous operations. The pits can stretch for miles, and they’re surrounded by tailings piles, where waste rock is dumped, and processing plants where taconite, the hard rock containing traces of iron, is broken down.

But, before a taconite pellet can be produced in Wisconsin, a company considering mining the largely forested areas of Ashland and Iron counties will need access to large-scale electrical power, transportation by rail or road and well-trained workers.

Beyond that, getting a permit for an iron mine can take years, even in Minnesota and Michigan, where companies have mined for more than 100 years. People whose livelihoods and culture are wrapped up in those states’ active iron mines say building the infrastructure surrounding a mine is an essential step if companies want to get into the high-risk, high-reward industry.

Development of those support structures is unlikely until a company files for a mining permit with Wisconsin’s Department of Natural Resources. That request would trigger a review by state and federal agencies lasting about two years. And it would launch an earnest exploration about how the mine will be powered, how taconite pellets will be transported and how workers will be trained.

“If they want to start making contact with those agencies, they could start tomorrow,” said Ann Coakley, director of the agency’s waste and materials management program. “It’s just that I know they don’t have a plan for a mine yet.”

Without a mining plan, it’s difficult to estimate how long those support structures will take to build or how much it would cost a mining company, the state or nearby communities.

An iron mine in northern Wisconsin also faces a near-certain legal fight over the legislation to encourage construction of a mine, which Gov. Scott Walker signed on March 11.

Gogebic Taconite, the mining firm that expressed interest in a mine in northern Iron and Ashland counties in 2011, has filed a letter of intent with the DNR and likely will begin exploratory drilling when the weather warms up, Coakley said.

A message left at the company’s office in Hurley wasn’t returned. Coakley said an application for a mining permit is at least two years away.

Advance notice required

For now, Wisconsin agencies and major players in the iron mine industry are waiting for Gogebic Taconite — or another company — to take that first step. Though officials in Iron and Ashland counties are asking questions about the work needed if a mine comes, those issues haven’t played a large role in the statewide debate over mining that began two years ago in Madison.

Coakley said Gogebic Taconite must give at least 12 months notice before applying for a mining permit, but the company can begin sharing plans with state agencies and others at any time.

The company likely will need at least a year to explore the area, take drill samples and come up with a business and design plan for a mine before it begins the permit process, she said.

The land containing iron ore in Ashland and Iron counties isn’t entirely undeveloped. Old logging roads cut between the forested area about 15 miles south of the city of Hurley, and scattered homes interrupt the dense green trees.

But the infrastructure needed to operate a mine will have to be installed or upgraded — a process that is nearly as daunting as obtaining a permit to operate a mine, said Tony Sertich, commissioner of Minnesota’s Iron Range Resources and Rehabilitation Board.

The agency collects state taxes from mining companies, doles out shares to local communities to compensate for the effect of mining and works on construction projects in the northern Minnesota cities and towns surrounded by active mines.

Sertich said transportation and power are two of the biggest obstacles in siting a new mine. “I think the challenge that Wisconsin has is not even on the environmental side,” he said.

Highways and roads leading to operating mines in Minnesota and Michigan are lined with high-voltage power lines to handle the demand.

Two iron mines in Upper Michigan are the largest electric customers of Wisconsin Energy Corp. The mines accounted for about 6.6 percent of the utility’s total electric sales in 2012 and 7.1 percent in 2011, according to filings with the Securities and Exchange Commission.

The power company for much of northern Wisconsin, Xcel Energy in Eau Claire, keeps an eye on future development and adapts to customers’ needs, said David Donovan, the utility’s manager of regulatory policy. Xcel can’t determine what infrastructure changes would be needed until a mining company has a plan ready for review, he said.

“They have to go back out and explore and better define the deposit,” Donovan said. “Once they get that information, they can come back to us and we’ll sit down like we would with any customer and talk about their needs.”

Transportation is another key factor for iron mining, said Tom Beekman, the planning chief for the Wisconsin DOT’s northwest region. He expects an iron mine to have little effect on highways or roads, because moving taconite pellets by truck would be too expensive.

The DOT won’t make any changes to highways unless a company’s transportation plan will require heavy use of a state highway, Beekman said.

“You can chase a lot of proverbial ghosts in this business by what may happen,” he said. “We tend to wait until something’s in motion, and if nobody files for a permit we are chasing ghosts.”

CN Rail has a rail line close to the likely mining site that runs north through the city of Mellen, to Ashland and Ironwood, Mich. Patrick Waldron, a spokesman for the company, said that line is “well-suited” to serve an iron mine. Details on adding to the existing line to reach a mining site would be discussed with a company building a mine, Waldron said.

Training a workforce

The long time frame for permitting and building a mine could make it easier for Wisconsin’s technical colleges to develop training programs and start working with students. But the challenge is finding qualified instructors, said Jim Mackey, the Wisconsin Technical College System’s education director for manufacturing and engineering programs.

Wisconsin’s technical colleges don’t have programs similar to the mining programs in surrounding states, and it usually takes about five months to develop and approve a new statewide program, Mackey said.

“It can be difficult, especially when you’ve discontinued an industry and brought it back after 20-some years,” he said. “We really want people with (working) experience during the last five years.”

Technical colleges in Minnesota and Michigan have their pick of experienced instructors. At Mesabi Range Community and Technical College in Eveleth, Minn., located an hour from seven active iron mines, instructors have a combined 175 years of experience in the mining industry. They teach students how to weld, train them to use large equipment at the mines and answer questions about everyday work.

In both neighboring states, education administrators, state agencies and representatives of mining companies have worked for decades to lay a path for encouraging younger workers — from courses in high schools, technical colleges, and summer work programs at mines. That system, Minnesota officials said, has become more essential as older employees retire and mining companies search for well-trained people to take the retirees’ places.

“It used to be you could come out of high school and get a job at the mines, especially if your dad worked there,” said Carol Helland, dean of academic affairs at Mesabi Range Community and Technical College in northern Minnesota. “Now, you have to have that two-year program.”

Tom Kesanen started at a U.S. Steel mine in Minnesota as an apprentice and worked his way up to a laborer. He changed jobs within the mine two times before becoming an instructor at Mesabi Range this year. He said he’s been impressed by the cooperation between the college and mining companies in the area, including regular meetings to brainstorm curriculum changes.

“If we see something we want to do, we bring it up,” Kesanen said. “Anytime they want to see something change, they bring it up.”