Mining Land Grab Threatens Great Lakes Watershed

Gogebic Taconite has come to northern Wisconsin and has started test drilling of what is potentially slated to be a 22sq mile (57sq. Kilometers) open pit mine taking up the southern end of the range of hills called the Penokees. North of that lies the parallel Gogebic range and the Bad River estuary in the Lake Superior watershed. The Great Lakes watershed contains about 21% of the world's freshwater, and 84% of the surface water of the North American continent.

According to the company, the taconite present in the hills represents one of the current largest deposits of taconite [1] left in the US. When Gogebic Taconite announces that the iron reserves in the Penokee Range are among the largest in the US, they don't mention that the US has comparatively little iron ore reserves left and these are located in the Lake Superior basin and are of a low-grade ore. Where the US has an estimated 2.1 billion tons of iron ore remaining: Australia has 17 billion, Brazil has 16 billion, Russia has 14 billion and China has 7.2 billion tons of estimated iron ore reserves. [2]

The costs of the mining activity are borne by future generations while the profits go to a holding company with an address in Florida. Gogebic Taconite, LLC, of course is just the particular entity that carries out the plunder. In Sudbury, Ontario, on the north eastern side of Lake Superior there is a site of a former open pit nickel mine makes the surface of the moon look lush. Through the landscape runs a stream of reddish orange ferrous sulfide-laden pickled water (see picture above).

Evidence from core samples is limited by the location of the sample, one is only getting segments of information that only create a full picture when added to what is known from the overall body of core samples. When the mining companies speak of an ore-body they are speaking of something that may or may not exist to the extent that would make it worth digging. Previous mines in the region simply dug shafts down to extract ore of 60%≈ iron content, of the sort that requires far less processing. To extract one ton of low-grade ore and have it ground down and pelletized into taconite, twenty tons of the sulfide bearing rock would have to be removed.

Gogebic Taconite has permission from the state government to mine the region for seventy years. If, or when, global ore prices drop and suffer from “overcapacity” it is likely that this mine might not be around in seven years, much less in seventy. The costs to extract the ore are the real reason why no major player in the mining business has ever shown any interest in the Penokee region. In the Mesabi Range in nearby Minnesota, all the global mining and metals giants are present; Chilean, Canadian and American capitalists pool their capital together to extract the wealth from the land. That is why the Gogebic Taconite, LLC, a front for the Cline Resource and Development Group is gambling on a quick buck while global iron is at the right price and where operations can be terminated, or restarted as needed.

It was in the 1990s that the Kennecott mine operated in Rusk County. A chorus of news outlets reported company claims that the mine would bring jobs and wealth to the area of Ladysmith in Rusk County. Top state geologists, experts in mining and minerals backed company claims. The Wisconsin Manufacturers and Commerce, a local capitalist guild of sorts, sponsored a study done at the UW Madison School of Business repeating the same mantra, that mining was the future of Rusk County. After seven years of operation the mine was shut down and the land was filled in all except for a tailings pond that is butted up against the Flambeau River. The number of jobs created, the crumbs that fell to the workers tables, was statistically negligible. [3]

The biggest mining giants, Arcelor Mittal, Cliffs Natural Resources and Rio Tinto (who own the largest stake in the Iron Ore Company of Canada-IOC), in the region have shown little interest in this stretch of hills. The ore body is found some 600 feet beneath a layer of pyrite bearing shale and is too costly to develop without a combination of high ore prices and tax breaks to make it profitable. Gogebic Taconite will only pay taxes on their profits and not on their property, along with being given the land for free. If, or rather when the price of taconite ore drops, the $1.4 billion in estimated tax revenues to the state of Wisconsin will evaporate. If Gogebic Taconite isn't having a profitable year the state will simply waive their remaining tax obligations.

The rush for mineral wealth in the region has been underway for some time and is led primarily by frac-sand and taconite. Even the India-based Essar Steel has developed a taconite mining operation in the Mesabi Range in Minnesota. Old taconite mines are being mined for their tailings and waste to extract the ore still present.

Chris Cline, in the media is often called “the New King Coal” because he has established a vertical monopoly from his public relations firm, to mining, to transport and sales of ore, all through a series of partnerships and holding companies. Cline owns a string of coalmines in West Virginia, Illinois and Missouri. At election time his corporate entities buy lawmakers at $5,000 to $10,000 per state legislator, the maximum donations allowable by law for those positions. Cline owns Foresight Energy Partners LP, Hillsboro Energy LLC, Gogebic Taconite LLC and Savatran LLC. He has established a series of Limited Liability Corporations and Limited Partnerships where he controls the majority stake and other financial partners, like the Carlyle Group, are brought in as needed.

The Great Lakes are environmentally distressed lakes, plagued by invasive aquatic species, urban runoff, industrial and agricultural pollution, all related to capitalist commerce and exploitation. Around this body of water there has been a land grab on the part of the major mining companies. The bulk of the mining is still done on the Canadian side of Lake Superior so capitalists, like Cline regard the southern side of the Great Lakes as under-mined.

Meanwhile, frac sand mining is being shipped out of Wisconsin as fast as it can be dug out of the ground and processed. [4] Even the ability to ship it out is constraining the physical capacity to transport it out of the region. It has only it is only just started to peak and slow down as new deposits of glacial sand get exploited in Minnesota and elsewhere and prices drop from their $100 a ton highs. Successful production is consolidating around those areas that have the most ready access to means of transportation as new sources of frac sand are being developed elsewhere.

Extraction of value is the name of the game and few industries illustrate this quite as clearly as mining. The preservation of the environment could only occur without a tectonic shift in the social order that sees the land and its people as nothing more than a source of value. Environmental reforms and even the wholesale industrial collapse of past decades have only succeeded in slowing the degradation of the Great Lakes and its watershed. [5] Such rampant environmental destruction cannot exist apart from exploitation of labor. Capitalism is as incapable of leaving any of its "natural resources" unexploited, just as it is incapable of not waging imperialist wars.



[1] Taconite is basically magnetite ore combined with bentonite clay and pelletized into a rusty red nugget that can be refined into steel.

[2] U.S. Geological Survey, 2014, Mineral commodity summaries 2014: U.S. Geological Survey, p. 84-5

[3] Churchill, Roscoe and Gauger, Laura (Furtman), The Buzzards Have Landed—The Real Story of the Flambeau Mine. Deer Tail Press, 2007. p.1151-6

[4] Chase, Taylor. As rail moves frac sand across Wisconsin landscape, new conflicts emerge. Wisconsin Center for Investigative Journalism. 2014.

[5] The Great Lakes Environmental Assessment and Mapping Project compiles a map of the degradation and environmental stresses in the Great Lakes at:


Tuesday, October 14, 2014


Here is a link to an article from a couple of days ago, about freight delays on the railways potentially causing trouble for the delivery of heating oil this coming winter. This is the result of the entire shale oil extraction industry driving up demand for freight transport. So much sand is going out of the state that the transportation infrastructure can't even keep up with demand.