The Minnesota Department of Natural Resources opened bids Thursday for mineral leases that allow companies to prospect for copper, nickel, gold and other metals across northern Minnesota.
The state offered 621 parcels of land, private and public, for which the state owns the mineral rights across Lake, St. Louis, Itasca and Koochiching counties. The parcels, some suggested by mining companies as possible hotspots, are in areas where mineral deposits are likely to be present but which generally haven't been confirmed.
The land equals 30,000 acres in Lake County, or 47 square miles.
Mining supporters - and official state policy - say the leases are a critical first step to tapping the state's vast mineral wealth, leading to new types of mining, hundreds of jobs, increased taxes and huge royalties for the state to pay for schools, roads and more.
But opponents say the system is stacked against landowners, some of whom didn't realize they don't own what's under their own land. And others say the state is allowing too much prospecting too fast.
Ron Brodigan started his Great Lakes School of Log Building in 1975 near Isabella because of its remote location. Thursday's DNR auction included state mineral rights under 120 of his 200 acres. While the winning bidder must negotiate with Brodigan for access, state laws generally favor mineral rights over surface rights, meaning Brodigan can't simply say no.
Brodigan said he knew he didn't own his mineral rights, but he never thought it would be an issue where he lives, far from any traditional mining area.
"My neighbors and I are disgusted at the prospect of damage, noise and pollution we will be seeing within a year," Brodigan said. "We are frightened as well about our water wells, which will likely be impacted by exploration under" our land.
Some caught unaware
The DNR auctions are held annually and have been drawing increased interest from mining companies as new discoveries of valuable metals have been found. Those discoveries happened at the same time prices for those metals jumped to new highs.
The winning bidder gets exclusive rights to the minerals for 50 years in exchange for a small lease fee and a commitment to pay royalties if mining ever occurs.
The state has held similar auctions in various forms for 150 years, and Minnesota tax coffers have realized millions of dollars from iron ore and taconite mining operations on land where the state owns the minerals leases.
Now, the official state policy is that Minnesota wants to see the same kind of royalties from copper, nickel and gold mining. Estimates skyrocket into the billions of dollars for the state if all known mineral deposits on land with state mineral rights are ever mined.
"That's the goal as it's written in statute ... that these leases eventually become mining operations and bring in royalties," said Aaron Vande Linde, transactions manager for the DNR's Division of Lands and Minerals.
So far, no such mining has ever been done here. But the rush toward a new era of mining has some landowners and environmental groups concerned, especially as prospecting moves farther from the state's traditional mining areas and spreads across the north woods.
"The sheer volume of public lands being auctioned off to mining interests is alarming," said Todd Ronning, board member of the Save Lake Superior Association.
The association recently received a $3,000 grant from the Indigenous Environmental Network and Western Mining Action Network to accelerate its public awareness campaign on the expansion of mining interest in northern Minnesota and the potential changes in the landscape.
Ronning notes that state policy prevents landowners from buying the mineral rights under their own land and favors mining company access, a situation that critics say prevents any meaningful state regulation of the industry.
In Lake County, 44 of the 122 units being auctioned by the state this week are privately owned land on top of state mineral rights. That varies by county, with no private land among the Koochiching County parcels, Vande Linde said.
Ronning says the process needs to be more upfront.
"While the state has followed all the laws they have created for themselves in regard to notice, I think they fail in following the law of decency," he wrote this week in an email to the News-Chronicle. "We live in a world where its standard practice to notify neighbors of adjoining land use decisions that might impact them, such as zoning variances or changes. It's discouraging the State of Minnesota has chosen to not burden itself with similar formalities."
Brian Kontio purchased land to build a cabin near Isabella last year. He also knew, from his property abstract, that the state held his mineral rights. But he, too, thought he was far enough away from where PolyMet Mining Co. and Twin Metals were finding copper near Babbitt and Ely.
"Now I realize that I am on top of a geological formation called the Greenwood Lake intrusion which possibly contains mineable quantities of platinum group metals. The joke's on me, I guess," Kontio said. He said state notices of the mineral auctions are vague.
"The average Joe who reads this notice is going to think that the state is selling mineral rights under state land, tax-forfeit land, not private land," he said.
"When a few of us who are affected spoke up and asked questions of DNR Lands and Minerals personnel, the responses were thin, empty, misleading and layered with a veiled hostility," Brodigan said. "Their answers on questions about mining under and beside lakes and other waterways were especially patronizing and unhelpful."
Fewer bids coming?
Last year, six mining companies bid on 123 mineral-rights parcels when the state offered 458,040 acres of state mineral interests across parts of St. Louis, Carlton, Itasca, Aitkin, Pine, Benton and Morrison counties, including large tracts just outside Duluth. No bids came for parcels in Pine, Benton or Morrison counties.
Most of the 1,164 parcels offered were not bid on and, on average, prospectors bid on only about 7 percent of the DNR's offerings every year.
Vande Linde said the big prospecting rush, at least on state land, may be slowing as mining companies need to catch up and confirm what's on lands where they already have purchased mineral rights before they bid on more land farther from known deposits.
The bids will be screened to make sure the companies can make the payments as promised. The leases don't become official until the state's Executive Council - the governor, lieutenant governor, secretary of state, state auditor and attorney general - approves them in June.
Thursday's high bidders will pay the state an annual fee during exploration, between $1.50 and $35 per acre. But their bids will be selected mostly based on the highest royalty per ton the company offered the state when any actual mining occurs.
The companies get exclusive rights to prospect on each parcel for 50 years - if they keep paying their lease fees, which ramp up after five years. In most cases, the leases are turned back to the state, either because not enough minerals were found or because the company never bothered to look.
Brodigan wonders if the forests and waters he has lived on become tailing basins and polluted. "What happens to one of the world's most important pure freshwater resources? Who owns the water - the lakes, streams and groundwater? If we let it become corrupted, which we may, our descendants will wonder: What were they thinking?"
Know your land rights
l If you don't know whether you own the mineral rights under your property, check your property abstract. Any severance between surface and mineral rights must be recorded in the abstract. More information is available at http://files.dnr.state. mn.us/lands_minerals/mineral ownership. pdf.