Highland Still Pushing for $50 Million Copperwood Grant

Highland Copper Co., Inc., which plans to build a copper mine in the western Upper Peninsula, is still looking to secure a $50 million infrastructure grant that stalled in the state Senate last year.

 “We’re doing our best to continue to talk about the merits,” said Highland Copper CEO Barry O’Shea, in a Feb. 2 interview on a Marquette, Michigan, television station (link below).

The grant from the Michigan Economic Development Corp. (MEDC) would fund road improvements, power upgrades and telecommunications, O’Shea said. It would not directly fund construction of the mine.

 “This is really a community infrastructure grant,” O’Shea said.

 The grant was approved by the MEDC and a committee of the state House of Representatives, but a Senate committee twice declined to pass the funding request last year.

 The current state budget cycle extends through Sept. 30, so mine supporters say the grant can still be taken up by the legislature, without being reintroduced.

 “That grant will be important when we think about the financing process” to build the mine, O’Shea said. “It’s also a nice vote of confidence from the state of Michigan. It would be a really nice piece for us.”

Grant Would Make Copperwood Project More Attractive to Investors

In the past, O’Shea has indicated that the grant would be more than just "nice." He's described it as a critical boost to Highland’s efforts to fund the Copperwood project.

"We are advanced, but we don't have firm commitments (for funding)," O'Shea said in discussions with The Michigan Strategic Fund board last year (reported in the Detroit News). "I can tell you with certainty that an award of this nature will move the needle significantly in terms of (how) our debt providers and our equity investors look at our company. It's not only a large financial boost for the project, but it is a true endorsement."

Highland Copper needs to raise an estimated $425 million to build the Copperwood mine, which has received all the required permits from the state of Michigan 

Mine Could Operate for 20 Years or More

The permits anticipate an 11-year mine life, but O’Shea said there’s probably enough copper to keep the project going “for 15 to 20 years plus.” 

The Copperwood underground mine and processing facility would be located in Gogebic County north of Wakefield, Michigan, on the southern boundary of the Porcupine Mountains Wilderness State Park (the "Porkies"), and less than a mile from Lake Superior.

“Mining, and our project, poll consistently in the 80- to 85% range,” O’Shea said in the Feb. 2 interview on WLUC-TV (link below), adding that 22 local units of government have passed resolutions supporting the mine, all of which passed unanimously.

The survey data have not been released to the public, so it’s not possible to confirm O’Shea’s claims of local support for the mine.

Should Outsiders Have a “Vote?”

O’Shea downplayed an online resolution opposing the mine, which has more than 461,000 signatures.

“That’s considerably greater than the number of people in the western Upper Peninsula,” O’Shea said. “What that tells you is those people aren’t from the western U.P.”

"It doesn't matter if many opponents to the mine come from outside the immediate area," responded Tom Grotewohl of Protect the Porkies, in an email, "because those $50 million taxpayer dollars (to fund the proposed MEDC grant) also come from outside the immediate area." 

"Folks from around Michigan should have a say in how their taxpayer dollars are spent," Grotewohl said. "Moreover, the Porkies are the largest mixed coniferous deciduous forest in the Midwest, and Lake Superior is the largest, cleanest freshwater sea on Earth -- the wellbeing of these entities is of concern to folks from around the world."

“Misinformation in the Market”

During his television appearance, O’Shea also addressed what he called “misinformation in the market” from mine opponents.

“When the opposition looks at our project, they often point to the fact that it’s two percent copper content,” O’Shea said. “The average U.S. mine operating today is less than one percent copper content, so we’re actually a high-grade mine.”

Protect the Porkies, an environmental advocacy group, has stated that Copperwood's ore grade is 1.45%, “meaning that for every ton of extract, only 30 pounds would be copper and 1,970 pounds would be waste.”

“And then there's another, I'd say, sensational content around impacts to Lake Superior,” O’Shea said. “And we think those are quite unfair, because that kind of misinformation is is really designed to stoke fear. This is not a project to be fearful of.”

Protect the Porkies has warned that the Copperwood mine would “store 30-plus million tons of toxic waste on topography sloping towards Lake Superior.”

O’Shea said waste rock from the mine “doesn't produce acid, so it's literally incapable of leaching any metals into the groundwater” or, presumably, into the lake.

"Our environmental qualms with the mine are largely unrelated to acid mine drainage (AMD)," said Grotwohl of Protect the Porkies.

"With or without AMD, rolling out the power grid will open the floodgates for more industry in this area forever; the habitat destruction and habitat fragmentation right in the middle of the North Country Trail, the Porkies, Lake Superior, and the Black River will reduce the ecological vitality in all surrounding areas," Grotewohl said.

"Noise, light, water and air contamination, subterranean blasting, and industrial traffic will further reduce the ecological vitality of these areas," Grotewohl said.

O’Shea said the Copperwood mine is “designed from opening to closing aligned to all regulation” enacted by the state of Michigan in 2004.

The Nonferrous Metallic Mineral Mining statute was “voted in unanimously on a bipartisan basis of both the House and the Senate, and they were supported by key environmental groups,” O’Shea said. “So what that's telling you is that those environmental groups have signed off. They said, ‘If a mine is capable of getting through this stringent process, then indeed, it can be operated responsibly,’ and certainly we think that's the case for Copperwood.”

 Highland Copper was given the opportunity to comment on this report.