Buried Treasure

The numbers are unmistakably impressive: The Duluth Complex as a whole accounts for 95 percent of the country's known nickel supply, a third of its identified copper, and over three-quarters of its discovered platinum. With the prices of these metals increasing more than five-fold in the past few years—copper sold for 70 cents a pound in 2002; now it's at nearly $4—the bounty is potentially worth hundreds of billions of dollars to the five companies that have claimed a stake in it.

The mining could also be a windfall for the state, promising to provide more than $1 billion in education funding, millions of dollars annually in state and local taxes, and a few billion dollars more in new equipment and infrastructure investment.

And already, the would-be mining boom has created some new work. In addition to hiring geologists, the companies have contracted with several dozen workers to operate drills in three-man teams around the clock. Among them is Noah Ruhinen, a cocksure 25-year-old who gave up his managerial duties at a Herbert and Gerbert's restaurant in Fargo last year for a job on the rig. He's already worked his way up from a lowly helper to a full-fledged driller making more than $40,000 a year. "They just handed me a career," he says, knocking back a beer.

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The future of the mining depends on the fortunes of one company: PolyMet, which sits atop the biggest trove yet discovered: a proposed 2.5-mile-long open pit expected to yield 700 million tons of minerals.

The Vancouver-based company acquired the rights to its site in 1998, as metal prices rebounded. In 2004, the company bought a mothballed taconite processing plant for $500,000 and a million shares of company stock.

The move put PolyMet front and center. Suddenly, it had not just a mine site, but also a processing plant with the heavy rock-crushing equipment it would need to turn the minerals into cash.

Four years later, PolyMet leads the pack of sulfide mining companies poised to finally capitalize on the Duluth Complex. But first it will need approval from regulators.

For PolyMet, making its case to the authorities hasn't come cheap. To date, it has spent at least $13 million on everything from testing samples of leftover waste rock to shrinking the mine's footprint to producing lengthy reports pored over by the state's Department of Natural Resources and Pollution Control Agency and the U.S. Army Corps of Engineers.

The company claims that new technologies will enable it to extract the minerals with little damage to the environment. Instead of smelting the ore, PolyMet plans a multi-step process featuring an autoclave—essentially an industrial-size pressure cooker—which can separate the metals from the remaining ore with no air or water pollution. The company plans to store its most sulfuric and metal-rich waste rock on liners while the mine is running, then put some of it back in the water-filled hole, keeping it from contact with the air, while covering the rest with soil and trees. PolyMet hopes to start cutting down the spruce and draining the marsh atop its site early next year.

But after four years of negotiating with the regulators, PolyMet is already more than two years behind its original schedule. "Sometimes it's a frustrating process," concedes LaTisha Gietzen, PolyMet's vice president for environmental, government, and public affairs. "It would be nice if it was a bit more efficient."

Not everyone is so restrained. Jim Watson, a millwright who lost his job in 2001 when LTV Steel shut down and who now works part-time for PolyMet, speaks for many in the region. "It's gotten ridiculous," he says. "The government needs to let this thing get started. We've run out of patience."

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BY THE TIME BILLIE and Mike Rouse arrived in Babbitt in the early 1990s, the town was a shell of its old self. Built to house workers for Reserve Mining's huge taconite pit in the late 1950s, Babbitt was transformed by the company's closure three decades later into a crumbling hamlet bereft of hope and jobs—an outpost for retirees. The Rouses, who own a motel that has been partially rented out for months by drillers working in the nearby forest, hope that new mines could bring prosperity back to the town.

"There'd be younger people with children moving in," Mike Rouse says. "That's what people's memory of the mine is: a town full of life and children."

The Rouses live just north of Babbitt, on the western shore of Birch Lake. Close to the southern edge of the Boundary Waters, the lake is serenaded by loons and has a bountiful supply of walleye. But with three companies drilling scores of core samples within spitting distance of the eastern shore, it has also become ground zero for sulfide prospecting in Minnesota.

While Duluth Metals, Franconia, and upstart Encampment Minerals all plan underground mines, which would chop down less forest and unearth smaller quantities of sulfuric waste rock than would PolyMet's open pit a few miles to the south, Billie Rouse worries about the potential for acid mine drainage.