Minnesota more appealing than survey suggests

Perceptions may be everything, but perceptions may be erroneous.

The Fraser Institute has again published its “survey” of the technical and political attractiveness of a selection of jurisdictions for mining investment (T.N.M., Dec. 25/00). The perceptions by the “mining executives” that the Fraser Institute says it surveyed are largely incorrect with respect to Minnesota.

Consider the geological facts.

Minnesota encompasses a large, accessible but generally under-explored portion of the Canadian Precambrian Shield. The better-explored greenstone belts of neighbouring Wisconsin are perhaps the most productive and prospective in the world for volcanogenic massive sulphide (VMS) deposits. Other important, greenstone belts are known in areas of nearby Ontario and Manitoba. Minnesota’s VMS, gold and potential sedimentary-exhalative environments are largely unexplored. Minnesota’s Duluth complex, in the Mid-Continent Rift, is probably the best environment in North America for the discovery and development of substantial deposits of platinum group elements (PGEs). Yet the Fraser Institute reports Minnesota’s mineral potential is perceived as vastly inferior to that of neighbouring Ontario and substantially inferior to that of Manitoba.

Next, consider the regulatory and investment attractiveness.

Admittedly, nearby Wisconsin has a cumbersome and difficult regulatory climate, though the persons surveyed seem to forget that Kennecott’s Ladysmith deposit was recently permitted and profitably mined and that Rio Algom’s world-class Crandon Zinc-copper VMS deposit is well on its way to being permitted. Thus we are apparently damned for being situated next to Wisconsin for regulatory reasons, while, at the same time, geologically underestimated, considering our proximity to Ontario and Manitoba.

In fact, Minnesota has a regulatory regime in place for ferrous development, as well as one for dealing with nonferrous developments. Any mining permitting in any reasonable jurisdiction is not without problems these days, but I can personally testify to the fact that Minnesota state agencies and local governments have been consistently supportive in facilitating environmentally responsible nonferrous mineral exploration.

No other state owns more mineral rights within its boundaries than Minnesota. It has a well-organized system of leasing state-owned minerals, and, since federally owned minerals make up a relatively small area of the state, federal agency involvement is less of an issue than it is in the western states. Furthermore, native land issues have been less of a problem than they are in Canada or Australia. As well, our political stability is certainly greater than that of Peru, Mexico, Brazil and Indonesia.

In terms of taxes, last time we looked, the tax man’s bite was less in Minnesota on a potential nonferrous or precious metals operation than it was in Ontario, or even Arizona.

Why, then, the persistently erroneous perception of Minnesota?

First, it would help to know who the Fraser Institute had surveyed. Were lawyers or accountants asked about the mineral potential, and geologists about the investment climate? A survey is only as good as the participants, and its participants are only as qualified as they are knowledgeable.

Next, the exploration community. One wonders about the soundness of attributing the top rating to Nevada, a state where most of the metallic mineral potential is for gold (a metal with a relatively cloudy future). How well-informed can the mining community be when it ignores the extension of the Canadian Shield into the U.S. and the PGE potential of the Mid-Continent Rift? Are we really as well-informed geologically as we think we are?

Minnesotans need to combat the erroneous perception identified by the survey. Obviously we are still not getting the message out about our mining history, our geologic potential, about the tax and regulatory regime and about state agencies and local governments that support environmentally responsible mineral exploration and development. The Minnesota Exploration Association will continue to strive to get the message out, and to ensure that those in the private sector and government do their part.

Ernest Lehmann, President

Minnesota Exploration Association

Minneapolis, Minn.