Minnesota mining benefits outlined to Iron committee

HURLEY - Minnesota mining is becoming a model for potential mining in Wisconsin, including its economic impacts.

On Thursday, the Iron County Mining Impact Committee listened to a presentation from James Skurla, director of the Bureau of Business and Economic Research from the University of Minnesota-Duluth, about ferrous and non-ferrous mining impacts in northeastern Minnesota.

Skurla studied 18 different mining companies in the Arrowhead Region of Minnesota, and Douglas County in Wisconsin. He said Douglas County provides a lot of supportive industries for mining in Minnesota.

The study focused on income and employment benefits of both current and potential mining projects, done as a "what-if scenario," Skurla said.

The mining companies studied dealt in copper, nickel, taconite and steel, and according to Skurla, details about each company are kept confidential because the mining business is very competitive.

In 2010, mining made 30 percent of the gross regional product in northeast Minnesota, out of a total GRP of $14.9 billion.

When asked what northeastern Minnesota would look like without mining, Skurla's answer was simple, "We would be in trouble."

Minnesota also has an "elaborate mining tax," with taxes going for a variety of things, including school trust lands and university trust lands. In 2011, ferrous mining companies paid $151.9 million in taxes across the state.

Skurla said the process is a "patchwork of taxes, built over hundreds of years," and is something "often fought about" in the state.

Skurla also spoke about impacts to the community, including direct effect, or the initial spending; indirect effect, or additional inter-industry spending from the direct impact; and induced effect, or the impact of additional household expenditures resulting from the direct and indirect impact.

In 2010, the ferrous mining direct effect included 3,975 employees and value added to the area was $1.13 billion. The total effect, of the direct, indirect and induced effects, included a total of 11,226 employees in 2010 and a value of $1.9 billion.

"These things have huge impacts," Skurla said.

Skurla was asked how the reports are used in communities, and he said many use them to plan for infrastructure changes, like in school districts, for example. When a study finds a potential of 11,000 new jobs in the community, plans are created to make sure it is ready for the influx of people.

Committee chair Leslie Kolesar said a study done in Wisconsin said no indirect jobs would result from Gogebic Taconite's mine in Iron County. Skurla cited many indirect jobs that could result from a mine coming in, including specialized companies dealing with mining equipment, or mining services.

"I disagree with that study's conclusion," Skurla said.

Indirect jobs would result from a line that would be constructed from Ironwood to supply water to the mine. The city reached an agreement to supply water to the mine more than a year ago.

Skurla also spoke to the committee about not "localizing" the project.

"If it helps the region, it will be beneficial," Skurla said.

Other business

Committee member Bob Walesewicz asked the committee if it would be interested as a community into looking to a way to find local talent to help with the potential mine.

Walesewicz recommended a "meet-and-greet" style event with G-Tac, allowing small businesses to discuss potential support services to get the work done locally "as much as possible."

Committee member Kelly Klein, who heads the Iron County Economic Development Corporation, said he would be interested in looking into that option.

"We have a lot of talent that sits here locally," Walesewicz said. "Mr. Skurla said local dollars go round and round, whether with mining, tourism or anything else. Let's see if we can keep it here."