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Wisconsin set to clear the way for controversial iron ore mine

Wisconsin Governor Scott Walker addresses the second session of the Republican National Convention in Tampa, Florida August 28, 2012. REUTER
Wisconsin Governor Scott Walker addresses the second session of the Republican National Convention in Tampa, Florida August 28, 2012. REUTER

By Brendan O'Brien

MILWAUKEE (Reuters) - Wisconsin's Republican-controlled legislature is expected to approve on Thursday streamlined environmental regulations to clear the way for a possible $1.5 billion iron ore mine in the far northwest of the state.

Opponents say the measure will allow pollution of lakes, streams and groundwater, and reduce air quality for the sake of jobs and the economy.

The bill, if signed into law, would create an expedited process by setting a 420-day limit for the state's Department of Natural Resources to approve or deny a permit for iron mining.

"We have struck a balance between protecting air and water quality and our overall environment and giving a fair shot to any company that would like to come in and explore our resources and create those jobs," said Republican Assemblyman Scott Suder, who is expected to introduce the bill on the floor of the state House of Representatives on Thursday.

Assembly Republicans, who control the chamber, are expected to easily approve the bill, sending it to the Republican Governor Scott Walker, who supports the legislation.

The catalyst for the metallic mining measure is a plan by mining company Gogebic Taconite for a $1.5 billion mine in portions of Iron and Ashland counties in northwestern Wisconsin.

During its first phase, the Gogebic mining site is expected to be about 5 miles long with a 1,500-acre open pit as much as 1,000 feet deep, according to the state's Legislative Fiscal Bureau. The site could grow to about 20 miles long in later phases, the agency said.

The mine, intended to extract the 2.2 billion tons of iron ore available in the area, would be one of the largest in North America, according to Thomas Evans, assistant director of the Wisconsin Geological and Natural History Survey.

"It makes a significant investment and significant commitment in terms of the extraction of that resource, but whether it happens or not, it will be an economic decision by a company," Evans said.

Officials with Cline Resource and Development Group, Gogebic Taconite's parent company, were not immediately available for comment. Cline Resource and Development Group is a privately-held company owned by billionaire Christopher Cline.

The company has said the project could create 700 mining jobs, more than 3,000 construction jobs, and $604 million of total economic benefits annually.

Supporters of the proposed measure say the state's mining regulations have been constraining and the approval process too elongated, creating uncertainty for mining companies.

"A company needs certainty that when they apply for a permit, they will be given a fair shot and a time certain to get an answer," Suder said. "Without that certainty, no company in the world is going to come here and those job opportunities will be completely lost."

Wisconsin's current regulation of mining, like many other U.S. states', is onerous, according to the National Mining Association.

"The infuriating long permit process in the United States is far longer than in competing regions like Canada or Chile or Australia," said Luke Popovich, a spokesman for the mining association.

The bill also allows a mining company and the state's Department of Natural Resources one 60-day extension during the approval process. The provision allows the department and U.S. Army Corps of Engineers to jointly prepare environmental impact statements while allowing mining companies to make changes to a proposal during the approval process.

Under the new law, mining companies will be able to fill wetlands, lakes smaller than two acres and some streams with waste, more than they are allowed to under current regulations.

"It's extreme, it's one-sided and clearly flawed," said Anne Sayers, program director of the Wisconsin League of Conservation Voters.

She added mining will pose a public health threat by emitting arsenic, lead and mercury, and damage the ground water supply, a source of drinking water for almost 70 percent of Wisconsin citizens.

It also lessens a mining company's environmental liability by removing irrevocable trust requirements, which require mining companies to set aside money to pay for future environmental issues that may arise such as contamination.

The legislation keeps in place the 40 years of long-term care insurance a mining company must carry and a requirement for a reclamation bond to pay to reclaim the mine site.

Senators passed the bill with a 17-16 vote on February 27 after about a dozen public hearings that consisted of more than 70 hours of debate and testimony were held to during the last two years throughout the state.

Senate Republicans failed to pass the bill last year when a Republican lawmaker refused to support the measure.

(Reporting By Brendan O'Brien; Editing by Greg McCune and Nick Zieminski)

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