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New leases just another Trump corporate give-away

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New mineral leases issued to Twin Metals by the Trump administration in June were supposed to be the third and final renewal of two separate leases that the U.S. government originally granted to the International Nickel Company (INCO) in 1966. But the actual leases issued by the administration provide a potentially far more lucrative outcome for Twin Metals and its Chilean-based parent company, Antofagasta, granting nearly perpetual rights to potentially tens of billions of dollars-worth of low-grade sulfide deposits containing copper, nickel, and a variety of precious metals. Those deposits are found in a line nearly parallel to the South Kawishiwi River, a major watershed that flows directly into the 1.1 million-acre Boundary Waters Canoe Area Wilderness, near Ely.
It’s a sweetheart deal for Antofagasta, one that has become typical of the Trump administration, which appears intent on handing over millions of acres of public lands to private industry under the most favorable terms possible.
Handing Antofagasta potentially perpetual rights to minerals in the Superior National Forest is one of several significant alterations to the leases that appear to be highly advantageous to Antofagasta, one of the world’s largest copper producers, and several of the changes were written into the leases after the administration released draft versions for public comment late last year. That means the public never had the opportunity to weigh in on the changes, virtually all of which were designed to benefit Antofagasta, during the shortened public process completed last winter.
Those changes include:
Dropping the 1966 requirement that the lessee comply with the terms of the Shipstead-Newton-Nolan Act, which limits logging or other disturbance within 400 feet of a shoreline on lands in the Superior National Forest.
• Eliminating the 1966 requirement to prohibit land disturbance within 200 feet of an existing building. This was a provision designed to protect adjacent recreational property owners from excessive disturbance.
• Dropping the 1966 prohibition on caving or subsidence of national forest lands as a result of mining operations. Critics of the Twin Metals project believe this change may reflect planned changes in mining methods, including the possible use of caving, which could increase the risk of collapse.
• Dropping a 180-day time frame for removal of all mining equipment upon the completion of operations. The new lease requires a reclamation plan be submitted within 90 days but provides no time frame for how long reclamation could take.
• Removing the 1966 prohibition on the construction and operation of a smelter.
• Reducing the required bond from the $10,000 required in 1966, to $5,000. This change was originally granted in a 2004 lease renewal granted by the George W. Bush administration.
• Granting Antofag-asta exclusive access to unidentified areas within the leased property. The 1966 lease did not grant exclusivity, which allowed the public continued access to the public lands in question.
• Dropping the 1966 requirement that any minerals mined at the site, or an equivalent amount, be sold for use within the United States. So much for the argument that these are strategic minerals that are critical for the national security. Unless Antofagasta opts to process its metals locally, which would create an entirely new set of environmental concerns, it’s almost certain to process its concentrates in other countries, where the end products will simply become part of the global commodity flow. Let’s be clear on this point: We’re potentially putting our region’s water quality at risk to provide the raw materials to make copper, nickel, and palladium primarily for our Asian economic competitors.
And that’s assuming that Antofagasta doesn’t have an entirely different motivation in mind. It’s no secret that the big players in the metal markets reap the largest profits not from putting new production on line, but from limiting the sources of supply, thereby pushing prices higher. For a truly massive copper producer, like Antofagasta, the question at any point in time is whether the copper located along the Duluth Complex is worth more in the ground or in the pipeline. A company like Antofagasta certainly has the financial wherewithal to develop the Twin Metals mine, should that suit their bottom line. Likewise, it has the financial wherewithal to sit on the asset, potentially for decades, waiting for metal prices or new technology to make it worthwhile to mine.
While the leases issued to Twin Metals by the Trump administration do contain a requirement to construct a mine within the first ten-year lease term, the lease contains so many loopholes that Antofagasta could easily maintain the leases indefinitely while doing little or nothing to actually open a mine. For example, the leases allow the company to seek suspension of the clock whenever market conditions are such that a mine could only operate at a loss. That would be the case today. While we haven’t seen Twin Metals’ final mine plan, if it assumes metal prices at current levels, it’s highly unlikely to project profitability, unless it does so with smoke and mirrors.
Even if a future administration were to hold the company’s feet to the fire, the lease sets a minimum annual production level at a paltry $206,196 of copper, nickel or associated metals. Antofagasta could meet that level of production with five guys using pickaxes.
The bottom line is, if the federal courts find that the new leases are legitimate, and not an unlawful reversal of a final agency decision by a prior administration, a foreign corporation will have successfully locked up valuable federally-owned resources for as long as they suit the company’s interests. And the public either gets next to nothing for it, or a significant environmental threat to the Boundary Waters. Either way, it’s a bad deal for Minnesota, and the country. Unfortunately, that’s known as “business as usual” for the Trump administration.

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