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Kennecott Mine work awaits rebound in nickel market

Date Posted: April 24 2009

LANSING – A mining project is proposed for land located 20 miles north of Marquette, which would create 200-400 construction jobs over a two-year period.

But when construction will start is anyone’s guess. “The economy plays a role in the construction process,” said Kennecott spokesman Matt Johnson, to the Michigan Building and Construction Trades Council delegates, at their April 1-2 Legislative Conference. “The green light could come at the end of the year.”

Or not. Nickel prices, like the market for most other ores and metals, has declined with the rest of the economy. Rio Tinto, Kennecott’s parent company, announced earlier this year that development of the mine has been “deferred until market conditions recover.”

The proposed underground mine “has a high concentration of nickel,” Johnson said, adding that the U.P. mine would be “the only primary nickel mine in the world.”

The mine has its detractors in the environmental community. Johnson said state permits have been granted for the mine, and two of three legal challenges to those permits have been overcome in favor of the mine. The third is pending. Mine owners are also in talks with the Environmental Protection Agency.

If and when the nickel market does bounce back, the Kennecott Eage mine in the U.P.’s Yellow Dog Plains would consist of a two-mile-deep, 28-foot wide access tunnel bored into the earth. The mining would take place “100 percent underground,” Johnson said. The nickel would be removed by 45 trucks making round-trips every day. The site would then be filled in and “100 percent reclaimed” Johnson said.

The project would also consist of the $80 million refurbishment of the 1960s-era Humboldt Mill, which has sat unused since the 1990s. That’s a two-year project that would create 200 construction jobs. And, plans call for the construction of a 22-mile long access road on what is currently an old logging trail.

Beyond that, Rio Tinto owns or has leased the mineral rights to 500,000 acres of land in the U.P. “Geologists are looking for other deposits on that land right now,” Johnson said.