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Mining companies make bids for mining exploration in NE Minnesota

Three mining companies bid on 31 tracts across Northeastern Minnesota during the Department of Natural Resources mineral lease held Wednesday.

The bids are for the right to explore for minerals -- including copper, nickel and gold -- in areas of St. Louis, Lake and Aitkin counties where the DNR owns the mineral rights. They are also areas where geologists suspect large deposits of those minerals are waiting.

Much of the surface land above the mineral exploration areas is owned by the state or counties. But some of it, especially in Lake County, is private property, said Susan Damon, an attorney for the DNR's mineral division.

Damon said the DNR will conduct a detailed analysis of who owns the land above the tracts this week and landowners will be notified quickly that a mining company may be knocking on their door.

It's the first such auction of DNR minerals rights since the issue erupted in controversy last year.

That's when several landowners appealed the lease of state mineral rights under their land. After delaying a decision several times, however, the state's executive council sided with the DNR and approved the 2011 sales in May 2012.

Mineral leases are auctioned off nearly every year by the DNR. The companies pay a small fee to the state for exclusive exploration rights and then, if any minerals are mined, the state gets big royalties.

The issue last year was especially battled by several landowners in Lake County, near Isabella, where there is intense interest by mining companies in copper and other non-iron metal exploration.

The DNR and mining supporters -- as well as official state law and policy -- say that the state mineral exploration leases are a critical first step in pinpointing marketable deposits of minerals and the first step toward creating hundreds of jobs and pumping millions of dollars into state school funds when mining royalties begin flowing into the state as mining begins.

Opponents say the system is stacked against landowners, with little chance to say no to mining companies. They say exploration and drilling will be disruptive to their north woods lifestyle, while mining opponents question whether copper mining can be conducted without environmental damage.

Wednesday's round of mineral leases will likely be sent to the Executive Council for approval at its Dec. 6 meeting. Companies could begin drilling and other exploration as early as next year.

The bids covered mineral rights under about 9,509 acres, including 240 acres in Aitkin County, 4,469 acres in Lake County and 4,800 acres in St. Louis County:

* Twenty-one bids were for tracts under northern St. Louis County forests and made by

Atlanta-based Encampment Minerals Inc.

* Nine bids are under Lake County lands, made by a St. Paul-based company called DMC USA LLC.

* One bid was under Aitkin County land by Colorado-based MMG USA Exploration LLC.