Opinion editor's note: Star Tribune Opinion publishes a mix of national and local commentaries online and in print each day. (To contribute, click here.) This counterpoint is included among a collection of articles that were submitted in response to, or are otherwise applicable to, Star Tribune Opinion's June 4 call for submissions on the question: "Where does Minnesota go from here?" Read the full collection of responses here.
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The Star Tribune feature "Where does Minnesota go from here?" printed an opinion on June 28 titled "Our future must make room for mining." The article repeated a number of the mining industry's talking points but didn't include much detail on economics, the dismal science. Let's do some economics.
I believe we can make the observation that in its present configuration, hardrock mining is more or less a welfare program for northern Minnesota with little contribution to the financial health of the state as a whole. This observation applies to our existing taconite industry and will probably be true of any copper-nickel development.
Let's start with gross domestic product numbers from the U.S. Department of Commerce. They disclose that Minnesota has a total economy of about $446 billion and that mining contributes a little less than $2.4 billion. Far less than 1%. We should also consider that our much larger manufacturing industry is adding value, while our mining industry is stripping assets and shipping them out of state.
As a frequent mining employee during good times and bad, I can have appreciation for the paychecks without needing to believe they have great economic effect at the state level. According to the Minnesota Department of Revenue Mining Tax Guide, mining has gone from 14,000 employees during the 1970s and early 1980s down to a little over 4,000 last year. Mining promoters like to talk about our "way of life" as if it's all about mining, but we miners shipped the major component of our way of life to the steel mills of Gary, Ind., before most Star Tribune readers were born. The high-grade iron is gone and our copper-nickle might have a few plums, but even though the ore body is massive, it's low-grade, and after the plums are mined out we'll be left with an ore body that's a wetland killer and an energy pig.
As we make decisions about where to allocate our development dollars we would be wise to check out the Minnesota Department of Employment and Economic Development, (DEED) Current Employment Statistics. They measure mining and logging together as 0.2% of Minnesota's employment while manufacturing is over 11%. Subsidizing our mining industry makes material for manufacturing more expensive.
I'm not on an offensive against mining. Recently I was visiting with another old-timer and told him that I helped build Hibbing Taconite in 1974. He said, "Thanks. I worked there for 40 years." His story is important, but it's not enough to tell the story of honest economics. My wife and I go to mining conferences and I've frequently heard fellow miners say that "grade is king." Our other natural resources are more important than our low-grade ore bodies. In a warming world, crushing low-grade ore to the consistency of face powder is suicidal.
Bob Tammen lives in Soudan, Minn.
