St. Louis County added the word Minerals to the title of its Land Department earlier this year and now taxpayers may start to understand why.
The county just received its first mining royalties from taconite iron ore that was mined on state tax-forfeited land managed by the county -- land where the county has de facto mineral rights.
The $900,000, the first big mining royalty check ever for the county, comes as three mining companies begin to expand their mine pits to find new ore and start digging on the county-administered land. Northshore Mining near Babbitt, United Taconite near Eveleth and ArcelorMittal's Minorca new mine operations near Biwabik are now digging on county land, said Kevin Gray, St. Louis County administrator.
The $900,000 is new money for the county just as the County Board sets its 2013 budget. This year's check amounts to nearly 1 percent of the annual county budget, and should help keep taxes down for property owners. But much of the first installments to the county will be invested back into the Lands and Minerals Department, Gray said, helping pay for new survey crews, private contractors and extra legal services needed to define exactly where the county land is.
"It's not really a surprise, but we weren't sure how much was coming and we really won't know because (taconite production) varies so much from year to year," said Linnea Mirsch, deputy county administrator for budget and operations. "This is the first time the state has shared any of this information with anyone, so it's all pretty new."
ADVERTISEMENT
The mining companies pay based on the actual amount of finished taconite produced, not on the tonnage of raw ore dug up. The money flows to the county through the Minnesota Department of Natural Resources.
St. Louis County received some money for mineral leases in the past, fees for exploration on county-administered land. But in the past the total revenue from mining for the county was about $100,000 per year.
The county has about 900,000 acres of tax-forfeited land, which once was in private hands but was given up by the owners by opting to not pay taxes for many years running. Most of it is forested, some of it is urban and some is in the heart of the Iron Range's busiest mining areas. The county also stands to gain financially if the proposed move into copper mining occurs in coming years.
County commissioners were told last winter that the county also is staking a claim on leftover iron ore at old mining operations that are now tax-forfeited. As that ore is recovered and processed, that could mean even more money in county coffers.
The county reaps a similar reward from selling trees to loggers off county-administered forest, earning between $3 million and $5 million each year, and by selling tax-forfeited land to private parties.
