Minnesota Iron Ore Sustainable Supply
by Jim Sellner, PE, PG Manager of Engineering & Development Division of Lands & Minerals Department of Natural Resources
Laurentian Vision Partnership, Iron Range Resources Rehabilitation, Iron Board
Chisholm, MN January 28, 2015 Division of Lands and Minerals
Promoting and Regulating Mining in Minnesota Topics • Mineral revenue and leasing • Iron Ore & Manganese on the Cuyuna Range
There are 2 basic industries: Agriculture & Mining – everything else is value added John Engesser, P.E. Chemical Engineer Former Assistant Director Lands & Minerals
Hibbing 3 Minnesota State Statute 93.001 Policy for promoting Mineral Development It is the policy of the state to provide for the diversification of the state’s mineral economy through long-term support of mineral exploration, evaluation, environmental research, development, production, and commercialization. Minnesota State Statute127A.31 Goal of the permanent School Fund. The DNR Administers 8.5 million acres of land of which 2.5 million is School Trust. The legislature intends that it is the goal of the permanent school fund to secure the maximum long-term economic return from the school trust lands consistent with the fiduciary responsibilities imposed by the trust relationship established in the Minnesota Constitution, with sound natural resource conservation and management principles, and with other specific policy provided in state law.
Minnesota State Constitution – Article 11 The permanent school fund of the state consists of (a) the proceeds of lands granted by the United States for the use of schools within each township,… No portion of these lands shall be sold otherwise than at public sale, and in the manner provided by law. All funds arising from the sale or other disposition of the lands, or income accruing in any way, shall be credited to the permanent school fund. Within limitations prescribed by law, the fund shall be invested to secure the maximum return consistent with the maintenance of the perpetuity of the fund…. The net interest and dividends arising from the fund shall be distributed to the different school districts of the state in a manner prescribed by law. Types of State Administered Mineral Lands • School Trust Fund
• University Trust Fund
• County Tax Forfeit
• Consolidated Conservation (Con Con)
• Acquired
• Volstead Types of State Minerals Leased
• Taconite/Iron ore • Residue iron ore (stockpiles & tailing basins) • Non ferrous minerals (copper, nickel, zinc, gold, cobalt, titanium, platinum, palladium) • Industrial minerals (Dimension Stone) • Peat • Miscellaneous lease (waste rock stockpiles)
Number of State Mineral Leases
600
500
400 Residue Industrial 300 Peat Other Metallic 200 Iron Ore 100
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 Minnesota Mineral Leases 2012
8 USA Metal Consumption
Steel Aluminum Copper Lead Titanium Zinc Manganese Chromium Nickel Magnesium Other World Iron Ore Production
Sinter Feed Pellets
Source: USGS Annual Iron Ore Commodity Summary. USA and Canada Iron Ore Production
Sinter Feed Pellets
Source: USGS Annual Iron Ore Commodity Summary. Mesabi Range Taconite/Iron Ore Production Current mining industry impact on MN economy is about $4 billion annually 80 Mine Employees Iron Ore 1913 – 16,048 Taconite 70 1979 – 13,267 Current – 3,900 Minnesota produces 80% Why the drop? of US Iron Ore 1) Underground to Open Pit 60 2) Rail haul to truck haul 3) Equipment became larger
4) 35 ton trucks to 350 ton trucks 50 5) Technology (computer control) 6) Resource curse?????
40 Avg. production 37,400,000
30 Long tons (Millions) tons Long
20
10
0
Year 12 State Mineral Revenue Mineral Management Cost for FY2012 = $2,896,000 proportionally taken from the various revenue land types
60
Total Mineral Revenue for the past 10 years (2003 – 2012) = $251,777,375 Total School Trust Mineral revenue for the past 10 years (2003 – 2012) = $154,657,435
50 Total mineral revenue 1890 – 2002 = $261,005,904 School Trust mineral revenue 1890 – 2002 = $170,054,547
2012 – 96.8% revenue from iron ore & taconite, 2.3% revenue nonferrous mineral leases 40
Other Tax Forfeit 30 University School 20
10
0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 13 14 Cuyuna Range
1859 …. Gov’t land surveyors report strong magnetic variations. 1882 …. Test Pits sunk by Henry Pajari. 1903 …. First drilling by Cuyler Adams. Iron ore discovered in 1904. 1910 …. Completion of MPLS, St. Paul & Sault Ste. Marie rail line to Cuyuna. 1911 .... First iron ore shipment from Kennedy Mine – 147,649 tons. 1953 …. Largest annual iron ore shipment – 3,714,684 tons 1984 …. Last iron ore shipment from Algoma Zeno Mine – 60,730 tons. 1911-1984 Total iron ore shipped from Cuyuna – 106,437,863 tons. 1992 .… USBM conducted lab experiments on insitu extraction of manganese. 1994 to present: Cuyuna Country Recreation Area created by Legislature and operated by MN Parks & Trails. 2012 …. Hydraulic fracturing solution mining proposed for manganese ores near Emily, MN (far north portion of the North Cuyuna Range district).
15 Manganese Potential
16 17 18 19 20 Cuyuna Range Mining Companies
45 mines were once active on the Cuyuna North & South Range.
Major players: Hanna Inland Steel Pickands Mather Evergreens Mines Pittsburgh Pacific Zontelli Bros.
21 Cuyuna Range Resources
Unmined Iron Ore Resources – direct shipping and concentrates. Unmined Iron Ore/Manganese Resources – direct shipping and concentrates. Stockpiles & Tailings Basins containing iron ore and manganiferrous iron ores.
6- 9 lbs. of manganese is added to every ton of steel. All ferro-manganese is imported into the U.S. (Africa & South America). Approximately 650,000 – 800,000 LT’s of ferro-manganese is used by the domestic steel industry, annually.
The Cuyuna Range contains the largest identified manganese resources in North America. The DOD recognizes this resource in it’s strategic reserve of critical metals.
MNDNR is authorized to issue temporary use permits for sampling & leases for residual mining (scram) and traditional iron mining on state administered mineral lands.
22 Cuyuna, MN
23 Minnesota Iron Miners
24 Portsmouth
25 Hanna
26 Kennedy
27 Mangan #1
28 Kennedy Head-frame (1959)
29 Kennedy
30 Croft
31 Bonnie Belle 1918 (1st Ore car)
32 Armour #2 (1917)
33 Evergreen 1935
34 On the job (1925)
35 Feigh
36 Pennington (1915)
37 Ferro
38 Mahnomen 1923
39 Louise (1959)
40 Cuyuna-Duluth
41 Ironton 1910
42 Ironton 1917
43 Ironton 1923
44 Ironton 1940
45 Ironton 2007
46 1923
47 Ironton School 1950
48 Ironton Miners
49 Ironton City Hall/Fire Dept. 1923
50 Thank You
51