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Minnesota Executive Council approves controversial Northland mining leases

Mining companies looking for more copper, nickel, gold and other metals in Northeastern Minnesota will get a chance to prospect on more land after action this morning by the state's Executive Council in St. Paul.

The panel of state officials voted 4-1 to approve so-called mineral leases for exploration under 31 tracts of land across Aitkin, St. Louis and Lake counties where the state hold the mineral rights.

The leases, which award exclusive rights to look for minerals at those sites, had been on hold for one year while opponents challenged the need for an environmental review before the leases could be awarded.

Several Lake County residents had argued that the Minnesota Department of Natural Resources should conduct an environmental review before the leases are put up for bid. But the DNR, and the State Court of Appeals, disagreed, saying any environmental review should come only if and when a mining company decides to begin drilling.

The Lake County residents and their attorney, Paula Maccabee, earlier this month appealed the decision to the state Supreme Court. The high court has not yet decided whether to take the case. On Friday, Maccabee urged the Executive Council to hold off on any decision until the high court rendered a decision.

But the council didn't wait.

The executive council, which approves land sales, leases and other major financial deals of the state, includes Gov. Mark Dayton, Lt. Gov. Yvonne Prettner Solon, Secretary of State Mark Ritchie, Attorney General Lori Swanson and State Auditor Rebecca Otto. Otto was the only no vote on the leases.

"This is good news because it reaffirms that Minnesota has a good process in place for mineral leases," Frank Ongaro, executive director of Mining Minnesota, a copper mining industry group, told the News Tribune. "It also sends a good message to the global investment community that Minnesota is supportive of mining."

Maccabee said that landowners did win a concession when Dayton instructed DNR Commissioner Tom Landwehr to issue a public notice when mining companies file a notice to drill at any of the state mineral rights sites. It's at that point that an environmental review could be requested.

"That's a significant step in the right direction. It gives people an opportunity to find out when drilling will occur so they can, if needed, request an Environmental Assessment Worksheet,'' Maccabee said. "This is the first time people will know when those drill plans are filed."

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 receives royalties. Many of the proposed exploratory drilling sites from the 2012 auction are outside traditional mining areas, in locations where geologists suspect large reserves of copper, nickel, platinum, palladium and other valuable metals are sitting.

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

Opponents say the system mostly avoids environmental review and public scrutiny, and is stacked against landowners, who have little chance to successfully say no to mining companies. They claim exploration and drilling will be disruptive to their north-woods lifestyle, while mining opponents question whether copper mining can be conducted without environmental damage caused from acidic runoff when sulfide-bearing rock is exposed.

The 2012 mineral leases awarded are for exploration below 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 are for tracts under northern St. Louis County forests 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 under Aitkin County land is by Colorado-based MMG USA Exploration LLC.

The DNR has not yet announced whether it plans to conduct a minerals lease auction yet in 2013.