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WMC Testifies in Support of Iron Mining Reform

TO:  Members, Senate Committee on Workforce Development, Forestry, Mining & Revenue
         Members, Assembly Committee on Jobs, Economy & Mining
FROM:  Scott Manley, Vice President of Government Relations 
DATE:  January 23, 2013
RE:  Support for Senate Bill 1 and Assembly Bill 1 Iron Mining Reform Legislation
Wisconsin Manufacturers & Commerce (WMC) appreciates the opportunity to testify in support of Senate Bill 1 and Assembly Bill 1, both of which propose comprehensive reforms to the iron mining permitting process.  We believe this legislation is the single most important economic development legislation the Legislature can enact this session.
WMC isWisconsin’s largest general business trade association, with roughly one-fourth of the state’s private sector workforce employed by a WMC member company.  We represent businesses in the manufacturing, banking, energy, health care, retail, insurance, agricultural and service sectors of our economy.  WMC recently celebrated its one-hundredth anniversary of advocacy dedicated to making Wisconsin the most competitive state in the nation to do business.
Reforming Wisconsin’s mining laws will create jobs and economic opportunity
Wisconsinis home to one of the largest remaining iron ore deposits inNorth America.  Roughly two billion tons of iron ore are located on privately-owned property inAshlandandIronCounties– enough to sustain more than one-hundred years of mining.  If mining is allowed to occur,Northern Wisconsincould transform into an economic engine for generations to come, and provide thousands of jobs in an area of the state that desperately needs them. 
The project would involve an enormous investment of capital to construct the mine.  At roughly $1.5 billion, it would be one of the largest private development projects in state history.  An economic impact study by NorthStar Economics found that construction of the mine would result in more than 2,000 construction jobs to build the mine. Once it is operational, there would be approximately 700 workers employed full-time at the mine, with 2,100 other jobs created to support the mining activity.  The mining jobs are expected to pay roughly $60,000 per year, plus $22,000 in benefits.  To place that level of income into perspective, the Census Bureau’s data shows median household income in Iron and Ashland Counties of $34,201 and $37,555 respectively.  The income from high-paying mining jobs would literally change the standard of living for this area. 
Wisconsin’s Current mining laws discourage investment in mining jobs
Despite having significant metallic ore deposits located in our state, only one mine has ever been permitted throughout the history of Wisconsin’s metallic mining law (the Flambeau Mine in Ladysmith).  Because of the mining moratorium enacted in 1998, it is unlikely that the Flambeau Mine could be permitted today.  A recent survey of 500 mining companies throughout the world by the Fraser Institute (attached) found alarming evidence that Wisconsin’s environmental regulations and regulatory framework discourage investment in mining jobs.
For example, of the 79 states and countries analyzed in the survey, Wisconsin’s environmental regulations ranked the worst in the world for mining investment.  Eighty-five percent of the respondents characterized Wisconsin’s environmental laws as either a “strong deterrent to investment” or “would not invest due to this factor.” 
The Fraser Institute survey diagnoses a significant problem with Wisconsin’s mining laws.  We cannot expect to attract investment in family-supporting mining jobs if mining companies continue to view our state as having some of the most hostile mining regulations in the world.  Bold, sweeping reforms like those proposed in Senate Bill 1 and Assembly Bill 1 are needed to change Wisconsin’s reputation as a state hostile to mining if we hope to attract mining investment to our state.  By contrast, minimal reforms that largely preserve the status quo will not result in an investment or the creation of mining jobs in Wisconsin.
The reforms in senate bill 1 and assembly bill 1 will create a clear and predictable permitting process for iron mining
The comprehensive mining reforms proposed in the legislation before you will help create thousands of jobs and billions of dollars in economic impacts from mining, while maintaining robust environmental protections.  The legislation directly addresses many of the key deficiencies in our current law, including the following:

  • Establishes clear and achievable standards for permit issuance.  The bill proposes clear, objective and specific requirements to obtain a mining permit itself, as well as each of the underlying environmental permits (air, water, wetland, etc.).  The bill eliminates the ambiguity that permeates virtually all aspects of our current mining laws, and makes it clear to applicants what they must demonstrate in order to secure an approval from environmental regulators. 
  • Establishes a predictable permit process.  The bill establishes a robust pre-application period that requires a mining company to engage state and federal regulators at the beginning stages of the process to establish clear expectations about the information necessary to submit a complete permit, and when an application will be deemed complete.
  • Specifies a defined timeframe for DNR’s permit review.  To avoid a repeat of the open-ended permitting debacle associated with the Crandon mine, the legislation establishes a reasonable 420-day permitting deadline, with the opportunity for one 60-day extension. 
  • Recognizes that iron mining is different.  Current mining laws in Chapter 293 are more geared toward sulfide-based mining operations.  Because the process of iron mining is vastly different, the bill correctly regulates iron mining in a separate chapter of regulation – as does Minnesota and Michigan.
  • Limit opportunities for costly and time-consuming litigation.  Everyone deserves their day in court, and iron mining should be no different.  However, Wisconsin’s current mining permit process involves two mandatory contested case lawsuits during the permit process itself.  The bill allows a contested case lawsuit after the DNR makes a decision on the proposed permit – the same approach for other DNR permitting activities. 

It is important for lawmakers to remember that enacting these mining reforms would merely create a permitting framework – it is not a mining permit approval.  Passage of this legislation will simply create a regulatory process that enables the Wisconsin DNR to make a judgment about whether a proposed iron mine can be operated in a responsible manner.  Any applicant would still be required to demonstrate compliance with all state requirements, as well as considerable federal permitting requirements from the US EPA and US Army Corps of Engineers. 
Senate Bill 1 and Assembly Bill 1 establish a rigorous environmental review process
The legislation before you would establish a robust environmental review framework for iron mining that ensures a permit will not be granted unless the environment is protected.  For example, there are many specific regulatory requirements proposed in the bill that protect both water quality and water quantity, many of which are identical to current law.  WMC has provided a brief summary of selected environmental protections in the bill (attached), including the following protections: 

  • The bill maintains Wisconsin’s existing air quality, water quality and groundwater quality standards without changing them.
  • The bill protects rivers, lakes and streams from significant impacts, including specifying that the DNR cannot approve a navigable water permit unless there are no significant impacts on public rights, water quality, stream flow, or riparian property owner rights.
  • The bill protects surface water quality by maintaining the same water quality standards as we have under current law Chapter NR 102 of the Wisconsin administrative code.
  • The bill protects groundwater quality by keeping the same groundwater quality standards under current law in Chapter NR 140 of the Wisconsin administrative code, and requiring water quality monitoring before, during and after mining takes place to ensure the standards are met.
  • The bill establishes extensive regulation of mining waste, including soil and rock testing to fully understand the geology and chemistry of the conditions present at the mining site.  The bill also prohibits the DNR from granting a disposal permit unless the applicant can demonstrate compliance with surface water quality, groundwater quality and wetland water quality standards.
  • The bill protects water quantity by specifying that a water withdrawal permit cannot be granted if it would result in a significant impact on the water quality or quantity of the waters of the state.  It also disallows a permit if a withdrawal would significantly impact public rights in navigable waterways, or have a significant adverse impact on the ecosystem of the Great Lakes basin.
  • The bill establishes the Great Lakes Water Resources Compact as the controlling law applicable to iron mining activities. 

WMC believes enactment of the Senate Bill 1 and Assembly Bill 1 iron mining reforms will result in the creation of family-supporting mining jobs in our state.  We believe this legislation strikes the appropriate balance between the need for regulatory clarity and predictability with appropriate environmental protections.  We urge members of both committees and the Legislature as a whole act quickly to pass this important legislation, thereby trigger an enormous investment in family-supporting Wisconsin jobs.
Please feel free to contact me at (608) 258-3400 if you have any questions, or if I can provide you with additional information.
Related Material:
Mining Legislation Resource Center




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