The company that promised a huge mine in northern Wisconsin announced Friday that it was dropping the controversial project because it is not feasible.
“We don’t want to throw out false hope,” Gogebic Taconite president Bill Williams told the State Journal. “Our parent company felt there wasn’t enough certainty to it.”
State Republicans crusaded for the mine starting in 2011, saying it would create thousands of jobs in an economically distressed area, but scientists warned of possible environmental degradation, and skeptics have cited falling iron prices to back up predictions that nothing would materialize.
“I have four words: We told you so,” said Bob Jauch, a former Democratic state senator who fought against the 2013 mine deregulation law that Gogebic Taconite insisted it needed. “This company manipulated the public, bought the Legislature and co-opted them into participating in one of the biggest scams in Wisconsin history.”
Jauch accused Gov. Scott Walker and Republican lawmakers of “genuflecting” to the company, and said they did damage by pitting neighbors against each other over the project. “They owe the citizens of Iron County an apology,” he said.
A spokeswoman for Walker, a Republican whose stock has been rising as a potential 2016 presidential candidate, echoed Williams by blaming the pullout on the possibility that federal wetland regulations would be a problem.
“It’s unfortunate that the federal requirements for mitigating wetlands make it cost prohibitive for Gogebic to move forward at this time,” spokeswoman Laurel Patrick said. “We remain committed to working with companies interested in creating quality, family-supporting jobs in Wisconsin.”
The mine project has been politically significant for Walker, Marquette Law School Poll director Charles Franklin said.
“It was a calling card for his support of big business development over regulation,” Franklin said.
The 2013 law constrained the amount of time state regulators could review the environmental impact of an iron mine application, conceded that some wetlands would be lost, and set a limit on how much new wetland the company would need to create for each acre the project eliminated.
Williams said the lack of a similar federal wetland mitigation limit and U.S. Environmental Protection Agency action last year in Alaska contributed heavily to his company’s decision.
Williams said the EPA had done nothing directly to slow down the Gogebic Taconite mine, but he said the agency’s stance in Alaska raised too many doubts.
In July, the EPA told the Pebble Limited Partnership that its plan to dig a mile-deep gold and copper mine would do irreversible damage to one of the world’s last intact salmon habitats.
Mining of metals runs the risk of exposing waste rock that can create rivers of acidic material that destroys wildlife.
Number of wetlandssurprised company
Williams said the potential cost of replacing wetlands on the Wisconsin site was a pivotal issue.
Last fall, a Gogebic Taconite spokesman said the company was surprised by how many wetlands consultants had found on the site’s 3,000 acres in Iron and Ashland counties.
Then-spokesman Bob Seitz said the company was concerned about the cost of replacing wetlands under the state limit of 1.5 acres of new wetlands for every acre removed.
Late last month, Seitz said the company was “taking a breather” from the project and trying to reconfigure its footprint, in part to avoid wetlands.
The cost of replacing the sensitive areas could reach $60,000 an acre in some cases, he said. Seitz said he couldn’t estimate how many acres would be ruined. Walker recently appointed Seitz to a top post with the state Public Services Commission.
The mine has stirred major controversy since 2011 when Republicans took over the state Legislature and the governor’s office and began pushing for deregulation on the company’s behalf.
The company promised jobs and $1.5 billion in investment. Environmentalists said the mine ran too great a risk of ruining the many lakes, streams and wetlands that dot the Penokee Hills, 30 miles from Lake Superior.
Iron County officials said last month they were worried that the company might be pulling out after Williams balked at a relatively small payment for extending a land lease option.
Sen. Tom Tiffany, R-Hazelhurst, who was a leading proponent of mine deregulation, said Williams called him Friday afternoon with the news.
“Certainly it’s disappointing that they won’t be going forward,” Tiffany said, adding that he believed someday someone would mine iron from the site.
He said when the Legislature loosened regulations on iron mining, he didn’t foresee the EPA as an insurmountable obstacle.
Tiffany said EPA regulation of the Pebble mine proposal, President Barack Obama’s veto of the Keystone XL oil pipeline legislation and U.S. Forest Service regulation of logging are other examples of “crazy” measures that have prevented extraction of natural resources.
Former Republican state senator Dale Schultz, a moderate who helped block a 2011 mine deregulation bill, said the state should reinstate previous standards to protect water and other resources.
“In Wisconsin, we have dramatically lessened environmental protections and we haven’t created any jobs,” Schultz said.
Company pledges to repair drilled areas
Williams said the company would continue to “investigate” a possible mine, but declined to say whether there was much chance of the project being revived.
“They’ll still take a gander, but we don’t intend on putting out false hopes for anyone,” Williams said.
“Our extensive environmental investigation and analysis of the site has revealed wetland issues that make major continued investment unfeasible at this time from both a cost perspective and given the uncertainty of recent U.S. EPA actions, such as the events concerning the Alaskan Pebble Mine,” Williams said in a statement.
Gogebic Taconite is owned by Florida-based Cline Resource Development.
Williams said in the statement the remaining employees in the company office were offered severance payments.
He said the company would repair areas where the company drilled exploratory holes and scraped away rocks for testing.
“We are very thankful to our many supporters in the community, the region and the state of Wisconsin,” Williams said in the release. “They, along with our employees and contractors have become valued friends.”
Court records released during a campaign finance investigation showed that Walker personally solicited millions of dollars in contributions for a conservative group during the 2011 and 2012 recalls, which prosecutors cited as evidence the governor and his campaign violated state campaign finance laws.
Among the groups that donated money to Wisconsin Club for Growth during that time was Gogebic Taconite, which contributed $700,000, according to the records.
State Journal reporter Mary Spicuzza contributed to this report.