Our view: ‘Eyes wide open’ on metals miningA guest speaker in Duluth yesterday long has been a dark cloud over any prediction of economic benefit related to the coming mining of precious metals in northern Minnesota.
A guest speaker in Duluth yesterday long has been a dark cloud over any prediction of economic benefit related to the coming mining of precious metals in northern Minnesota. And he was brought here by Friends of the Boundary Waters Wilderness, a Minneapolis-based anti-mining nonprofit.
So the expectation, naturally, was for a mining-is-evil message.
And that’s just what Thomas Power, a Princeton-educated economics professor of 40 years at the University of Montana, delivered. But at least he did so with a history lesson rather than with half-truth propaganda or with picket-sign catch phrases that too often have been the weak tools of the doom-and-gloom, anti-mining crowd.
“My message is to go in with eyes wide open,” Power told the News Tribune Opinion page before speaking over the lunch hour Tuesday at Clyde Iron. “I’ve been doing economic research and teaching courses on Montana’s and on the western states’ economies for 45 years. … It wasn’t possible to study the Montana economy without paying attention to the mining part of it.”
Power always found it puzzling, he said, that throughout the 20th century, miners typically made good money and treasure literally was being extracted from the Earth, yet mining communities rarely showed signs of prosperity. That’s because, he learned, the vast bulk of wealth left mining communities in the pockets of out-of-town owners, investors and corporate executives. But that was only part of it.
“It isn’t just owners ripping everyone off. They put a lot of money in and they expect to get the money out,” he said. “The problem is twofold.”
The first is that prices for copper in the national and international markets fluctuate wildly. “So the profitability was always uncertain and the level of production was uncertain and the level of employment was uncertain,” Power said. “During hard times, when copper prices were low, companies had to lay people off (to stay competitive and in business). That’s not a time to go on strike, so the unions waited until copper prices were high and then they went on strike.”
So mining wages may be pretty decent, but mining income isn’t when you’re laid off or on strike and not working.
The second is innovation. Like every other industry, mining companies tapped the latest technology to run as efficiently as possible. In 1974 it took 35 workers to produce 1,000 tons of copper ore in a year. In 2003 seven workers could accomplish the same output. The result of modern equipment was fewer workers, higher unemployment in mining communities and few signs of prosperity.
“It’s based on wishful thinking to believe that this time will be different, that a century of this pattern — stretching right up to 2008 and 2009 when copper prices took a dive and copper workers were laid off — will be broken,” Power concluded. “It’s an exciting and interesting history. … Know what you’re getting into.”
His is only one opinion, of course.
A University of Minnesota Duluth report this year found that existing iron ore mining has a $3.2 billion annual impact on Minnesota’s economy and is responsible for 11,500 jobs. The study — produced by business and economics academics and others with credentials to rival those of Power’s — further found that if a wave of new copper mines and the expansion of traditional taconite mining planned in Northeastern Minnesota come to fruition, the numbers could more than double to $7.7 billion and 27,000 jobs. And that doesn’t even include temporary construction jobs to build the projects like the proposed PolyMet open-pit copper mine near Hoyt Lakes, the massive underground Twin Metals mine proposed near Ely and the new Essar Steel taconite plant under construction in Nashwauk, among others.
What actually will happen probably will fall somewhere between the dark clouds cast by those on the mining-will-destroy-us side and the rosy riches forecast by the mining industry and its supporters. And that’s all the more reason to keep our eyes wide open — to all information, all opinions, all research and all opportunities related to metals mining becoming reality in Northeastern Minnesota.