Kennecott Exploration Co. has asked the Minnesota Department of Natural Resources for the rights to search under thousands of additional acres for copper-nickel deposits as it zeroes in on a possible mine site in Aitkin and Carlton Counties.
Kennecott already has the rights to 85 different tracts on thousands of acres where the state owns the mineral rights near the tiny town of Tamarack, about 50 miles west of Duluth.
Now the company wants to explore under 6,800 additional acres, mostly south of Minnesota Highway 210.
Kennecott is asking to acquire the new mineral rights without going through the usual public auction process. State law allows the DNR commissioner to lease mineral rights outright to a company, through direct negotiations, if it’s considered “in the best interest of the state,” especially if the company already is actively leasing and exploring on adjacent lands.
The DNR is accepting public comments on the request through Feb. 6. The leases, if the DNR agrees, also must be approved by the state’s Executive Council.
Mining companies pay a small fee for the right to explore on land where the state holds the mineral rights. Then, if any actual mining takes place, the companies pay a per-ton production tax on any ore produced.
In December Kennecott notified the Minnesota Department of Natural Resources that it will drill eight to 20 new holes on land under which the state owns the mineral rights. Kennecott expects to be finished with the test borings by April 1, before the ground thaws. The company has agreements with various property owners to work on the lands.
Kennecott has been closing in on a large deposit of copper-nickel and other valuable metals for the past 15 years with millions of dollars spent, nearly 250 holes already drilled and more than 23 miles of core samples studied.
Kennecott, a subsidiary of global mining giant Rio Tinto, made a major finding of high-grade copper near Tamarack in 2008, but the global recession killed copper prices and virtually halted new exploration for several years. In 2014, fledgling investment firm Talon Metals agreed to buy into the slow-moving Tamarack project, a sort of junior partner to infuse cash to help rekindle exploration.
Kennecott has identified a strip of copper-nickel-platinum group metal deposits deep underground and sprinkled across an area that’s about 12 miles long and nearly 2 miles wide in some spots, although there isn’t necessarily mineralization throughout that entire area. Experts say that, unlike the Duluth Complex where PolyMet is hoping to mine copper, in which large amounts of lower-grade copper are present, the Tamarack area appears to have smaller amounts of very high-grade copper.
Public comments on the proposed new state mineral leases should be sent to: Minnesota DNR, Division of Lands and Minerals, Attn: Negotiated Mineral Leases, 500 Lafayette Rd, St. Paul, MN, 55155-4045 or by email to MMLeaseSale.email@example.com.