Minnesota approves mining exploration leases

March 3, 2016

Minnesota’s Executive Council approved mineral lease bids for three mining companies looking to prospect on 43 tracts totaling 16,348 acres of state-owned land. The state Department of Natural Resources holds the mineral rights, on the land.

The Duluth News Tribune reported that the state’s Executive Council voted 4-1 to approve the measure.

The companies submitted bids in November for areas where they believe valuable minerals might be located and where they may (or may not) conduct prospecting, such as seismic testing or even drilling to sample minerals in rock far below the surface.

In exchange for small annual lease payments, the winning bidder for each tract gets exclusive rights to explore on the land for up to 50 years, as long as they keep paying and keep looking. If mining ever occurs, the companies must also pay royalty fees to the state.

The bids were approved earlier by the DNR but also must be approved by the Executive Council, which includes Gov. Mark Dayton, Lt. Gov. Tina Smith, Attorney General Lori Swanson, State Auditor Rebecca Otto and Secretary of State Steve Simon.

Most of the land leased, 11,628 acres, is in Koochiching County where Colorado-based AngloGold Ashanti is looking for gold.

Arizona-based Kennecott, a subsidiary of global mining giant Rio Tinto, bid on three tracts totaling 1,440 acres in Aitkin County near the company’s so-called Tamarack project where geologists have found a deposit of apparently high-quality copper.

Atlanta-based Encampment Minerals bid on seven units in St. Louis County totaling 3,280 acres.

Minneapolis-based Vermilion Gold had bid on four parcels totaling 1,388 acres in Itasca County but pulled its bids and the leases were not awarded.

No bids were made on 130 other tracts the DNR offered last year on an additional 71,000 acres of land in Aitkin, Carlton, Itasca, St. Louis and Kanabec counties.

Several environmental activists testified at the council meeting, focusing on the scope of mining exploration and the lack of public input.

The DNR notes that buying the right to explore for minerals is far from actual mining or even test drilling. Only about 2.4 percent of the mineral lease sites ever see any actual test drilling. So far, none have been mined. Before a state-owned parcel can be mined, the leaseholder must comply with all legal requirements for environmental review and permitting.

Most of the tracts leased for exploration are for mineral rights under state-owned school trust fund or tax-forfeited land, although 31 parcels are owned by private citizens. DNR officials said all of them have been notified of the mining exploration leases.

The DNR says the companies are looking for nonferrous (non-iron) minerals such as copper, nickel, platinum, palladium, gold, silver, cobalt, chromium, zinc, lead, bismuth, tin, tungsten, tantalum and niobium.

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