Sunday, March 10, 2013

Mining For the Truth

UPDATE! March 18th WMC Meeting
Chinese Consul General Zhao Weiping in Madison
"The Capitalists will sell us the ropes to hang them with!"
Comrade Lenin
Updated 3/31/2013 (see photo and caption link)

When the Republicans came out with the new/old mining bill the reaction of Senator Bob Jauch in who's district the Penokee range lies called it a "hoax".  Much was being made over environmental issues, conflicts with tribal rights and Federal regulations but as time moves on a story has been developing that was not entirely made clear in the weeks leading up to the vote.

The first hint we got was a series of rumors that Gogebic Taconite (GTAC) - has no real intention of ever putting a shovel in the ground up there.  That's kind of a stunning claim given all the talk about investment and  high paying jobs.  The assumption many were working off of (including myself) was that it was merely a political stalking horse intended to distract from this Governor's stunningly bad jobs record.  By pumping the sunshine of thousands of jobs that would at best amount to perhaps 1% of the promised 250,000 jobs that have yet to materialize from Walker's worker's paradise it was possible for Republicans to posture themselves into the image job creation warriors.  Political straw men have their value.

Think about it.  In the last election Republicans pounded hard at the bad economy blaming Dems like Jessica King for worker's desperation.  Never mind the mine would have (and still will) take years to even begin.  Imagine the political gold that a passed State bill would yield that was then shot down by the Federal Government (EPA or Army Corp of Engineers) or worse yet - the tribes!  Heaven forbid a white man's fortune should be forbidden by a red one.  The political red meat would feed conservatives interests for a decades or more.  No mine.  No environmental damage.  But real profits none the less.

But, since the bill's passage a different motive has evolved and its a good deal more troubling.  It could well result in real digging and by forces that may well be out of reach of any sort of accountability even at the State level.  The first hint we got of this was from Esquire's politics blog about Walker's seeming winning streak.  It points out some interesting things about the mine...
Last year Walker travelled to Dallas to meet a contingent of Chinese investors, and he is scheduled to travel to China on a trade mission next month.  [...]
Quoting someone named Hansen (Dave?) it states, "China is the world's largest producer of iron ore and as one of the world's largest markets they have the ability to affect supply and prices. China has also recently begun expanding its mining operations outside of its borders, including opening the massive Sino Iron project at Cape Preston, in Western Australia's Pilbara region." 
Read more: Scott Walker Wisconsin Lawsuit Dropped - Wisconsin Gets What It Voted For (Twice) - Esquire
 A single blog does not a conspiracy make.  But there's more!  This showed up on the Minnesota public interest blog ...
Whether it's iron, grain or now airplanes, it's interesting to see how China, India and other emerging nations are shaping the future of northern Minnesota's economy.

India's Essar Steel is a large potential player in Iron Range mining. Chinese steel production and demand is now a central indicator in the global steel industry. One little hiccup and Hibbing Taconite, MinnTac or the others go on temporary shutdown. Or they hire 100 people tomorrow.
See article here

Finally a letter to the editor in the Rhinelander Star Journal points out some important information missing from the discussion to this point.  It seems that the land and mineral rights were previously owned by the biggest iron interest in the country, U.S. Steel which in 2003 had agreed to sell it to the Nature Conservancy which through the Forest Legacy Fund which would have committed the entire area to a logging and recreation in perpetuity.  Only the deal fell through for reasons no one has fully explained which eventually lead to the land falling into the hands of GTAC - a company which is a sub of another company which itself has never mined anything and the parent has never mined iron ore.

The letter asks...
In 2003, one of the largest steel-producing companies in the world was willing to sell a conservation easement for its 16,000 acres on the Penokee Range, knowing that mining would be prohibitive. Yet in 2013, our legislators insist there is profit and jobs to be had in those same hills. Facts suggest otherwise. We have been duped. To what end?
See full article here:

 To what end indeed?  What are we dealing with here?  We know that the quality of the ore in that deposit is low grade.  It is hard to get as because it runs deep,  And, it is close to the largest single body of water in North America and a good deal below its surface.  The amount of water that will have to be pumped daily to keep the pit dry is staggering.  To make a long story short - its expensive iron.

It makes sense that the Chinese could be involved.  They are the kings of cheap.  With no mores for their own environment much less ours its possible to imagine any sort of anti labor practices that would significantly water down the glowing images of prosperity in the north.  One might even wonder if the jobs themselves (certainly top jobs) might end up going to Chinese workers and not Americans. The bill already lays off millions in development costs on local towns that should be picked up by the company.  With the state already teetering on the edge of Right To Work pushed by Walker's owners, management will not have to be Chinese in order to act like it.  Its also open to question whether or not Chinese employees of a Chinese company would even be subject to US (much less State) laws.

In the end it is all about the money.  The interests that have invested heavily in the Republican Party are not fools. They do not part with their cash without expecting a return.  The question is:  Where is the payoff?  Is it in the mining of the ore or of public opinion?  If this is about finding profits in a high cost hole by going cheap then it could be just what it appears to be.  Cut labor, cut taxes and assessment, cut corners and dont worry about the filth.  But it if is a hoax like Jauch charges the real mining has been in political gold refined from the quick silver of false promises and ground from the hard rock of blame for its predestined failure.  That could well be where the real payoff is - in a vein of voter gold.

UPDATE:  3/11/2013 - The Manitowoc Herald Times reporter is today reporting on the pending Chinese trip and potential Chinese investment in the state.
From the article:  "Walker will also be on the hunt for Chinese companies interested in investing in Wisconsin companies, seeking to build on a meeting last fall when he hosted a group of more than 50 investors from Handan, a northern Chinese city. Scott Mosley, foreign direct investment manager at WEDC, said Chinese investors are seeking to invest millions with Wisconsin businesses."
 See full article here!


  1. Update:
    It seems that there is more to the foreign ownership issue than just the mine.
    It turns out that there are big investment interests involved in land speculation as being reported by

    One of the largest farmland sales in state history is fueling new speculation over a proposal in Gov. Scott Walker's budget to make it legal for foreign entities to buy large tracts of land in Wisconsin. Current state law limits foreign ownership, with some exceptions, to 640 acres but Walker wants to waive those rules and end the acreage cap.
    Last November, UBS AgriVest, a unit of the Swiss banking giant UBS. paid $67.5 million or nearly $7,000 per acre for about 9,800 acres in southwest Wisconsin.