State board spurns mineral leases

Talk about it

Minnesota’s Executive Council, the state’s top elected officials, kicked 77 mineral exploration leases back to the Department of Natural Resources on Wednesday, saying the agency hadn’t gone far enough to notify landowners of possible mining interest under their land.

The council voted 5-0 to postpone the lease agreements between the DNR and mining companies.

Several members of the council expressed concern that the DNR hadn’t fully explained to all potential landowners that they don’t own the mineral rights below their land and that mining companies could be exploring there soon.

It’s the first time since 1982 that the Executive Council hasn’t approved a DNR lease package, DNR officials said, and is another flare-up in the state’s debate over mining expansion.

A half-dozen citizens, including some affected landowners, testified at the council’s meeting at the Capitol, many saying that mineral exploration is expanding into new areas of the state’s north woods, far beyond the traditional Iron Range, and surprising people who never expected to own land where mining might occur.

Ron Brodigan of Isabella has been one outspoken critic of the DNR’s notification policies, saying despite not owning mining rights, surface owners should get the courtesy of knowing when the state is selling possible minerals below them.

“The DNR seemed rattled,” Brodigan said of the discussion he witnessed.

“The council sent us back to take another look at better notifying people with split estates, severed mineral rights from private surface ownership,” said Aaron Vande Linde, transactions manager for the DNR’s Division of Lands and Minerals.

The Executive Council — composed of Gov. Mark Dayton, Lt. Gov. Yvonne Prettner Solon, Attorney General Lori Swanson, Secretary of State Mark Ritchie and Auditor Rebecca Otto, all DFLers — meets quarterly to make decisions on state real estate and investment actions.

Some members of the council suggested at first that specific parcels where landowners complained be withdrawn from the lease. But Dayton said that was unfair, and that any action would have to include all private landowners or none.

Ritchie said later that he would like to see the DNR revisit the entire system of rules and regulations used in the minerals lease effort to “bring them into a more modern format and encourage better communication earlier in the process.”

“The state’s real benefit from these leases comes (from royalties paid) when we see large projects reach fruition,” Ritchie said. “And what the process seems to be doing now is stirring up a hornet’s nest, or a den of cougars as someone said today, against all types of mining,”

The move was at least a temporary win for owners of land under which the state was offering to lease mineral rights, including Brodigan, owner of the Great Lakes School of Log Building near Isabella.

“I see this definitely as a reprieve if not a little victory. We have them thinking about what they are doing to people who own land up here,’’ Brodigan said. “They are starting to re-think these mining laws that were written 100 years ago that are totally skewed to the mining company’s favor.’’

Vande Linde said the DNR could bring all, some or none of the leases back for a special council meeting this summer or to the council’s next meeting in September.

In April, four mining companies bid on 77 mining units over about 22,000 acres under which the state owns the mineral rights, much of it in Lake County, around Isabella, an area thought to be promising for copper-nickel deposits.

The DNR had offered 652 mining units across 226,000 acres in Lake, St. Louis and Koochiching counties in April, but many areas did not receive bids. About 20 percent of the units offered were below private land.

Mining supporters — and official state policy — say the leases are a critical first step to tapping the state’s vast mineral wealth, leading to new types of mining, hundreds of jobs, increased taxes and huge royalties for the state to pay for schools, roads and more.

But opponents say the system is stacked against landowners, some of whom didn’t realize they don’t own what’s under their own land. And others say the state is allowing too much prospecting too fast.

The DNR auctions are held annually and have been drawing increased interest from mining companies as new discoveries of valuable metals have been found. Those discoveries happened at the same time prices for those metals jumped to new highs.

The winning bidder gets exclusive rights to the minerals for 50 years in exchange for a small lease fee and a commitment to pay royalties if mining ever occurs.

The state has held similar auctions in various forms for 150 years, and Minnesota tax coffers have realized millions of dollars from iron ore and taconite mining operations on land where the state owns the minerals leases. Now, the official state policy is that Minnesota wants to see the same kind of royalties from copper, nickel and gold mining. Estimates skyrocket into the billions of dollars for the state if all known mineral deposits on land with state mineral rights are eventually mined.

So far, no such mining has been done here. But the rush toward a new era of mining has some landowners and environmental groups concerned. Last year, six mining companies bid on 123 mineral-rights parcels when the state offered 458,040 acres of state mineral interests across parts of St. Louis, Carlton, Itasca, Aitkin, Pine, Benton and Morrison counties, including large tracts just outside Duluth. No bids came for parcels in Pine, Benton or Morrison counties.

Brodigan offered talking points for land owners planning to address the council, either by letter or in person, including:

• “It may be legal to sell the land beneath us, but the applicable laws were made 100 years ago by and for the legislative lobbyists of the mineral companies. It’s definitely not the right thing to do.”

• “Let them know why you don’t want these sales to be approved – your plans for your property (if you’re a property-owner or even a nearby resident. Mention also that you will have to continue paying property taxes on the land no matter what happens.”

• “Mention that their whole initiative to lease for 50 years the mineral rights beneath private lands – without proper notice, or a public discussion – is about as undemocratic as anything the state could ever do to their citizens.”

With the reprieve last week, Brodigan showed some surprise that speaking out became an effective tool. “I was ready to go in there with that quote from Margaret Mead,” he said of the line: “Never believe that a few caring people can't change the world.”

“That’s what just happened,” he said.

Tags: minnesota dnr, mineral lease, minnesota executive council, dnr, news