State Mineral Leasing, Exploration, and Development
Frequently Asked Questions and Answers
The information provided on this webpage is current as of March 7, 2012.
What are the State's obligations under the constitution? Answer
- State law, State policy, & fiduciary obligations to Trusts (school and tax forfeit) Link
Why do we need minerals? Answer
What types of minerals does the State lease? Answer
Where does the State offer metallic mineral leases and what companies currently hold leases? Answer
- Geographic distribution of State metallic mineral leasing Link
- List of companies holding of State metallic mineral leasing Link
What is mineral exploration and development? Answer
What are the State's ownership rights related to surface and minerals? Answer
What are the State's regulations and reclamation rules related to mineral exploration and development? Answer
Why Minnesota and what are the benefits to the Trusts? Answer
What are the State's obligations under the constitution?
State law, State policy, & fiduciary obligations to Trusts (school and tax forfeit)
The Legislature enacted Minnesota Statutes, section 93.001 
setting forth state policy to “provide for the diversification of the state's mineral economy through long-term support of mineral exploration, evaluation, environmental research, development, production, and commercialization.”
A portion of the state’s mineral economy is derived from nonferrous metallic mineral exploration and development. Minnesota Rules, Chapter 6132 states that the purpose and policy concerning nonferrous metallic minerals is to “control possible adverse environmental effects … to preserve natural resources … while promoting orderly development of … mining” so that mining is “conducted in a manner that will reduce impacts to the extent practicable, mitigate unavoidable impacts and ensure that the mining area is left in a condition that protects natural resources.”
School Trust lands and the Permanent School Trust Fund
Minnesota Constitution, Article XI , Section 8;
The permanent school fund of the state consists of the original USA grants to schools in each township (sections 16 and 36, historically), the swamp lands granted to the state, and the indemnity and internal improvement lands granted to the state. Minerals have generated 80% of the historical total revenue to the Permanent School Trust Fund.
Minnesota Statutes, section 84.027 , subd. 18
The commissioner of natural resources has the authority and responsibility for the administration of school trust lands. Currently, the DNR administers approximately 2.5 million acres of school trust surface and mineral interests and an additional 1 million of acres of severed school trust mineral interests.
Minnesota Statutes, section 127A.31
The legislature intends that it is the goal of the permanent school fund to secure the maximum long-term economic return from the school trust lands consistent with the fiduciary responsibilities imposed by the trust relationship established in the Minnesota Constitution, with sound natural resource conservation and management principles, and with other specific policy provided in state law.
Other State-owned lands
Minnesota Statutes, section 93.15
The commissioner of natural resources may designate any lands belonging to the state and the beds of any waters belonging to the state or any lands in which the state has an interest as mining units and may rearrange or modify the mining units from time to time, subject to the limitations of this section.
State policy for reclamation of mine sites
Minnesota Statutes, Section 93.44.
In recognition of the effects of mining upon the environment, it is hereby declared to be the policy of this state to provide for the reclamation of certain lands hereafter subjected to the mining of metallic minerals or peat where such reclamation is necessary, both in the interest of the general welfare and as an exercise of the police power of the state, to control possible adverse environmental effects of mining, to preserve the natural resources, and to encourage the planning of future land utilization, while at the same time promoting the orderly development of mining, the encouragement of good mining practices, and the recognition and identification of the beneficial aspects of mining.
For information on the MN DNR's role in environmental review, permitting of mines, inspections, and reclamation rules and standards please visit the MN DNR's Mineland Reclamation webpage
If you have additional questions on this topic please contact:
Susan Damon, Transaction Manager
MN DNR - Division of Lands and Minerals
500 Lafayette Road
St. Paul, Minnesota 55155-4045
tel. 651-259-5961
fax 651-296-5939
susan.damon@state.mn.us
Why do we need minerals?
Mineral uses
Minerals for everyday use
We use and rely on dozens of minerals in the products we use everyday —such as toothpaste, light bulbs , windows, sidewalks, cars , and cell phones . A common description is that if the material has not been grown on a farm, field, or forest, then it has come from a mine. And if the material was grown, it was likely fertilized with minerals and harvested and processed with machinery made from minerals. It is estimated that every year, the mineral content of products purchased in the US would be an average of more than 38,000 pounds of minerals per person per year. The Mineral Information Institute has a lot of information about the use of minerals.
Minerals for green energy
There is a goal in the U.S. to find more sources of “green” energy. Most of these alternative energy sources require a substantial amount of mineral resources. For example, the mineral resources required for the Taconite Ridge 10 turbine wind farm that Minnesota Power built near Virginia, MN included 84,000 feet of underground power cable (copper and/or aluminum), 3 miles of new road (construction aggregates), 370 cubic yards of concrete for turbine foundations, 10 steel towers 265 feet high for the turbines, 400,000 long tons of taconite tailings for site preparation, and 170 semi-truck loads of component parts.
In addition to those mineral resources, wind power requires a duplicate electrical generation facility be built, often using natural gas as the energy source, because when the wind stops this facility must be started up within a very short timeframe to continue to supply electricity to the power grid. The sum is that green energy requires increased demand from the mines that supply the minerals.
Minerals for United States economic and defense interests
The federal government has defined certain minerals that are classified as strategic and critical to the economic and defense interests of this country. Copper, nickel, cobalt, platinum, palladium, titanium, and manganese are strategic minerals that occur in MN. Production of these minerals would improve the economic and defense interests of the United States.
New mines
Many metals are bought and sold as part of the global economy. Mines get depleted over time, typically over a time period of 10 to 100 years. New mineral deposits need to be discovered, and new mines need to be started to replace the mines that get depleted. In addition, on a global basis, the consumption of metals continues to increase each year, primarily as a result of a growing world population and a growing standard of living in many countries. Metals that are put into a building, such as copper wiring in a house, will not be available again for recycling for decades into the future. The result is that as our cities and communities continue to grow, the world demand for metals continues to increase.
A cluster of related mines is called a mining district, and mining districts may be active over a period of decades or centuries. The Mesabi Iron Range is a mining district composed of many iron mines in northeast Minnesota. Iron mining started in 1892 and there are known iron ore reserves that make it likely to continue for many decades into the future. The Biwabik Iron Formation is the geologic unit that has supported iron mining on the Mesabi Iron Range. This mining district has played an important role in the economic development of the United States. There have been many individual new mines in this district over the years.
If you have additional questions on this topic please contact:
Dennis Martin, Mineral Potential Manager
MN DNR - Division of Lands and Minerals
500 Lafayette Road
St. Paul, Minnesota 55155-4045
tel. 651-259-5405
fax 651-296-5939
dennis.martin@state.mn.us
What types of minerals does the State lease?
Figure 1: Minnesota Mines and Mineral Projects
Click to enlarge
There are five general categories of minerals for MN state leases; iron ores, metallic minerals, industrial minerals, peat, and construction aggregates. These materials have been mined or are being explored for in Minnesota.
Figures 1 displays the distribution active mines and mineral exploration projects and Figure 2 displays active and historic state mineral leasing.
There is a different type of state lease, a different set of state laws and different environmental review and reclamation rules for each of these categories of minerals.
Iron ore
The iron ores include such materials as high grade iron ores, magnetic taconites, non-magnetic taconites, iron ore tailings, and manganese-bearing iron ores. High grade iron ores, also called natural iron ores, contain 45 to 65 weight % iron, magnetic taconites that are low grade and contain 25 to 30 weight % iron, iron ore tailings that are the crushed waste from old (pre-1970) iron ore processing plants. There are also stockpiles of waste (or non-economic) rock from mining of high grade iron ores. Some of those waste rock stockpiles contain 40 weight % iron, and will be economically mineable some day in the future. The ore minerals are usually magnetite, hematite, goethite, and limonite. The waste minerals are primarily chert, along with carbonates of iron, calcium, and magnesium and various silicates.
Figure 2: State Mineral Leasing
Click to enlarge
Metallic minerals
The metallic minerals state lease category includes elements such as copper, nickel, platinum, palladium, gold, silver, cobalt, chromium, titanium, zinc, lead, bismuth, tin, tungsten, tantalum, niobium, or rare earth elements. Some of these ores contain native gold or native copper, or oxides of chromium or titanium, but the common trait in this category is that most of the ore deposits contain sulfide minerals. The language for state leases, environmental review and permits are all specifically designed to mitigate the environmental impacts of exploration and/or mining of sulfide minerals.
Industrial minerals
The industrial minerals state lease category includes such products mined in Minnesota as dimension stone, silica sand, and kaolin clay, along with a list of potential future mineral discoveries such as diamonds. There has been dimension stone mining in Minnesota for more than 150 years.
Peat minerals
Peat is an accumulation of organic residues from partial decomposition of plant debris under damp anaerobic conditions. Peat continues to accumulate annually in large areas of northern Minnesota. Peat is used primarily as a valuable soil amendment and potting media. There are 10 active state-owned peat leases as of January, 2012.
Construction aggregates
Construction aggregates include sand, gravel, and crushed stone. Construction aggregates are used to build our roads, homes, and cities. For additional information, such as maps of construction aggregates or additional reference information see the MN DNR's Aggregate Resource Mapping Program. There are 57 active state-owned earth material leases as of January, 2012. A MN DNR webpage focused on earth material leases on state school trust lands shows locations of current and past earth material leased sites, as well as future leasing opportunities.
If you have additional questions on this topic please contact:
Susan Damon, Transaction Manager
MN DNR - Division of Lands and Minerals
500 Lafayette Road
St. Paul, Minnesota 55155-4045
tel. 651-259-5961
fax 651-296-5939
susan.damon@state.mn.us
Where does the State offer metallic mineral leases and what companies currently hold leases?
The information provided for this question is current as of March 7, 2012. For further information on this question and topic you can preview or download the PowerPoint presentation titled 'Metallic Mineral Exploration and State Mineral Leasing in Minnesota' (file .pdf, 1.7 MB).
This PDF includes embedded 'speaker notes' with additional information for select slides. The speaker notes can be viewed in Adobe Reader or Acrobat, and within the following internet browsers; Internet Explorer, Mozilla Firefox, & Safari. Google Chrome does not display the speaker notes.
Geographic distribution of state metallic mineral leasing
Explorers invest in locations where they believe the geologic conditions are prospective to contain undiscovered mineral deposits, based upon known mine locations with similar geologic conditions in other parts of the world. The state has offered (see figure 3 for 'ever offered for mm lease') state leases for metallic minerals on the state mineral rights in the following 21 counties at some time since 1966: Aitkin, Beltrami, Carlton, Cass, Cook, Crow Wing, Itasca, Kanabec, Koochiching, Lake, Lake of the Woods, Marshall, Mille Lacs, Morrison, Norman, Ottertail Pine, Roseau, St. Louis, Todd, and Wilkin Counties.
Figure 3: Active State Metallic Minerals Leases
Click to see full image
Figure 3 displays a map of active state mineral leases (as of August 13, 2012) in 7 counties: Aitkin, Carlton, Itasca, Koochiching, Lake, Mille Lacs, and St. Louis. Note that the map is so small that it cannot accurately show the details of the size (acreage) and shape (parcel shape and number of parcels) of each state mineral lease. That information is available in a document called the State Mining Unit Book.
There has been active iron mining on the Mesabi Range for more than 100 years. The geologic feature being mined is the bedrock layer called the Biwabik Iron Formation, which can be thought of as the shoreline for an ancient sea from about 2 billion years ago. The layer is continuous for approximately 90 miles from Grand Rapids to Hoyt Lakes. At the current rate of mining, the ore reserves will sustain future mining for decades, and much beyond that depending upon the future economic conditions.
There has been exploration for copper and nickel deposits in the bedrock unit called the Duluth Complex in St. Louis and Lake Counties, since the discovery of copper and nickel mineralization there in 1948. Platinum and palladium were discovered in the Duluth Complex in 1986. Subsequent geologic research indicates that the copper and nickel and platinum and palladium tend to occur together in the known deposits in the Duluth Complex. But platinum and palladium could be found in separate deposits from the copper and nickel, based upon examples around the world. See the geologic map for the location of Duluth Complex and related bedrock units associated with the Midcontinent Rift, a feature formed when tectonic forces pulled the continent apart. In addition, explorers are looking to determine if buried intrusions from the Midcontinent Rift also occur in Mille Lacs county.
There are private mineral leases in virtually all the same areas as the active state mineral leases. These are on privately owned lands, so the state does not have locations for them, except where a company discloses the lease in a public way such as on a website. There is also copper and nickel exploration on private (not state) mineral leases in southern MN.
There has also been gold exploration in many areas of Minnesota for more than 100 years. There are many bedrock locations that contain economic quantities of gold, but so far only small tonnages have been found. One example is near the cities of Virginia and Gilbert, just north of the iron mines. Currently there is gold exploration occurring in St. Louis, Itasca, and Koochiching counties.
List of companies holding of State metallic mineral leasing (as of August 13, 2012)
- 608457 B.C. Ltd.
- Agate Lake Resources, LLC
- DMC USA LLC
- Encampment Minerals, Inc.
- Franconia Mineral Corp.
- HTX Minerals Corp.
- Kennecott Exploration Company
- Lehmann Exploration Management, Inc.
- Minerals Processing Corporation
- Prime Meridian Resources, Inc.
- Teck American, Inc.
- Twin Metals Minnesota, LLC
- Vermillion Gold, LLC
If you have additional questions on this topic please contact:
Dennis Martin, Mineral Potential Manager
MN DNR - Division of Lands and Minerals
500 Lafayette Road
St. Paul, Minnesota 55155-4045
tel. 651-259-5405
fax 651-296-5939
dennis.martin@state.mn.us
What is mineral exploration and development?
The information provided for this question is current as of March 7, 2012. For further information on this question and topic you can preview or download the PowerPoint presentation titled 'Metallic Mineral Exploration in Minnesota: Typical Exploration Activities' (file .pdf, 5 MB).
This PDF includes embedded 'speaker notes' with additional information for select slides. The speaker notes can be viewed in Adobe Reader or Acrobat, and within the following internet browsers; Internet Explorer, Mozilla Firefox, & Safari. Google Chrome does not display the speaker notes.
Mineral Exploration Process
The mineral exploration process varies from site to site and also varies based upon the particular mineral being sought. The goal of the mineral exploration process is to discover and delineate a mineral deposit that is sufficiently economic to develop into a mine. There are many subsequent steps required after discovery to determine whether the mineral deposit is economically feasible to mine. The current exploration activity in Minnesota is focused on evaluating the prospects for mining a copper, nickel, and precious metal deposits in the Babbitt-Ely area. There is extensive work involved in the overall process and business of mineral exploration, economic feasibility, and mine development that is beyond the scope of this description. The basic exploration steps, however, are described here to describe the temporary impact upon the surface of the land from the exploration steps.
Figure 4: Depth to Bedrock
Click to enlarge
Minnesota's Geology and Mineral Deposits
The rocks of Minnesota record a long and diverse geological history that spans over 3.6 billion years of Earth history. At various times and in various locations in the Earth's crust, mineral deposits formed. Subsequent deformation and erosion of the crust often caused these deposits to be moved to inaccessible depths or to be eroded away. Those deposits that are preserved in the upper 1-2 kilometers of the Earth's crust and that have a high enough concentration of metal have the potential to be economically retrieved. A particular challenge to finding minerals deposits in Minnesota, besides preservation near the Earth's surface, is that the bedrock surface is largely buried beneath a cover of unconsolidated glacial sediments (drift). Exploration companies are searching for mineral deposits in the bedrock. Figure 4 illustrates the depth (in feet) to bedrock or thickness of glacial drift in Minnesota. In some areas of the state (e.g. northeastern Minnesota, windows through the glacial drift expose "outcrops" of the bedrock surface, which provides clues to the geology of the upper crust. However, to more completely evaluate the bedrock geology and its potential to host mineral deposits, a variety of exploration methods are used to "see through" the drift and into the bedrock.
Developing an Exploration Program
Companies that specialize in exploring for mineral deposits conduct extensive background studies of existing geologic data before starting an exploration program. To identify prospective areas, an exploration company will first conduct a thorough review of geologic maps and reports and study geologic samples or data that are in the public domain. Such information and materials are available from university libraries or state agencies (e.g., Minnesota Geological Survey, MN Dept. of Natural Resources). For example, it is common for exploration companies to sample and analyze existing drill core at the DNR Drill Core Library when evaluating the prospectivity of a particular area. While the drill core library can assist exploration it can also limit future exploration drilling in areas that have been drilled and shown to not have a potential mineral deposit. The explorer will seek out areas that previous geologic mapping, scientific studies, or exploration activities have shown contain the "right kind of rocks" to host particular types of deposits. Before exploration can begin in a prospective area, the owners of the surface and mineral rights must be established and permission must be obtained for the right to access lands of interest. For example, state mineral leases provide the lessee the right to explore on state mineral lands. Once permission is obtained, the exploration company will apply various direct and indirect methods to assess the potential for mineral deposits in the bedrock.
Figure 5: Bedrock Geologic Mapping
Click to enlarge
Direct Exploration Methods - Bedrock Geologic Mapping
Direct evidence of the geology of the bedrock surface exposed in outcrops is hard to come by in many parts of the state since it is buried under glacial drift (Fig. 4). Even in areas of "good outcrop", the area of bedrock exposed at the surface may only be a few percent. Consequently, bedrock geologic maps (Fig. 5), which attempt to portray the picture of the bedrock surface, incorporate indirect geophysical data and are largely interpretive. The factual aspects of bedrock geologic maps are the outcrop locations, which today are digitally rendered by geographic information system (GIS) software. Attribute data associated with each outcrop is also recorded, such as the types of rock exposed, the orientations of structures in the rock (faults, mineral veins, bedding, layering), and the presence of metallic mineralization. Although all of Minnesota is covered by a bedrock geologic map, most published by the Minnesota Geological Survey, the scale (and detail) of the mapping varies widely. Nevertheless, these maps give explorers at least a general idea of the bedrock geology and what areas might be prospective for mineral deposits. If bedrock outcrop exposure allows and previous mapping was at insufficient detail, mineral exploration companies will commonly conduct their own geologic mapping as their first exploratory evaluation of a site. This process may involve using a hammer and chisel to sample a hand-sized piece of a bedrock outcrop which may get sent to lab for chemical analysis. The environmental impacts are negligible.
Figure 6: Airborne Geophysical Survey
Click to enlarge
Indirect Exploration Methods - Geophysical Surveys
Just as doctors may use x-ray machines, CAT scans, and magnetic resonance imagery (MRI), the explorer uses remote sensing called geophysics. The explorer takes advantage of the variable physical properties of rock formations, such as magnetism, electrical conductivity and density, to narrow down the search for a target ore deposit. These properties can be measured at specific locations on the Earth's surface or continuously recorded from a helicopter or plane flying over an area (Fig. 6). Geophysical surveys are ideally suited for areas like Minnesota where most of the bedrock surface is buried beneath glacial drift. Because the glacial drift is composed of a homogeneous mix of different rock types, its geophysical properties are largely uniform. Therefore, any variations in measured geophysical properties (anomalies) likely reflect changes in the buried bedrock. While the geophysical anomaly maps created from such surveys tell us the geophysical attributes of the bedrock, they do not tell us what specific rocks and minerals are creating the anomalies. Fortunately, many mineral deposits have distinctive geophysical characteristics. For example, copper sulfide minerals conduct electricity much more than common rock forming minerals, and metal-bearing minerals typically have higher densities than common rock forming minerals. Because there are so many conditions that create false anomalies that mimic metal deposits, such as the presence of graphite (carbon) or pyrite and pyrrhotite (common iron sulfide minerals) that are far more common than copper or nickel minerals, this approach by itself is not always sufficient. The Geologic Survey of Finland did detailed exploration for gold and base metals in Finland in the 1970's and 80's, and estimated that they found one economic metal deposit by testing roughly 10,000 of the geophysical anomalies. The environmental impacts from airborne geophysical surveys are negligible.
A ground based geophysical survey is another indirect exploration method that is focused on a small location generally based upon the general indications of the airborne geophysical survey. This survey is done walking on the ground and often involves backpack-sized instruments. Measurements are often taken along a pre-selected grid of locations. To allow the workers to perform this safely and efficiently while carrying instruments, the explorer may seek permission to cut the brush along the lines. This act is the same as deer hunters do for their shooting lanes. The objective of this survey is often to determine if an exploratory boring is warranted, and if so, where exactly it should be located. The environmental impacts are minor and temporary.
Figure 7: Geochemical Survey Samples
Click to enlarge
Indirect Exploration Methods - Geochemical Surveys
Another common method to explore for a buried ore deposit is to analyze the chemistry of a systematic array of rock, soil, glacial drift, plant material, lake and stream sediment, or water samples collected at or near the Earth's surface (Fig. 7). Geochemical anomalies are created in these surface materials by the dispersal of metals away from a buried metal deposit. This dispersal can be caused by a variety of geologic processes including the natural chemical weathering of a mineral deposit, the flow of groundwater through a mineral deposit, the uptake of buried metals into the roots of plants and trees, and the dispersal of ore minerals by mechanical erosion and transport by streams and glaciers. The elements that are analyzed in such surveys include not only the metals of interest, but also other "indicator elements" that may be more mobile and diagnostic of a particular type of mineral deposit. Interpreting the anomalies created by geochemical surveys requires knowledge of not only the chemistry of the mineral deposits being sought, but also of the way such deposits are affected by surficial geologic processes, and the likely direction that dispersal took place. The environmental impacts of this exploration method are negligible.
Figure 8: Drill Rig to Obtain Bedrock Core Samples
Click to enlarge
Sampling the Targets - Core Drilling
After acquisition and interpretation of bedrock outcrop data from geologic mapping and geophysical and geochemical surveys, subsurface targets with potential for mineralization are identified and tested by diamond core drilling. The diamond core drill bit is composed of industrial diamonds that allow it to cut through rock and collect a continuous cylinder of rock core, 2-5 inches in diameter. Core drilling is done later in the exploration process in part because it is an expensive operation that can cost up to $100 per linear foot and involve multiple holes. Historically speaking the average depth of an exploration drill hole targeting non-ferrous metallic minerals is approximately 1,100 feet with a general range between ~100 feet up to ~5000 feet which is dependent on the geography of the mineral deposit being targeted. Typically, exploration companies will hire a contractor who specializes in exploratory core drilling. Before drilling can take place, the exploration company must get permission from the surface owner to allow the drill rig to access the location that is to be drilled. There are also state regulations in place throughout the exploration drilling process. In Minnesota, drilling is commonly done in the winter when the ground is frozen and the surface impact is limited as seen in figure 8. An exploration hole that is 1,000 feet deep can be completed in less than two weeks of drilling time. The site preparation, sealing of the boring, and site reclamation typically occurs over another two week time-period. After drilling is completed the drill cuttings are covered by local soil materials at the site. The environmental impacts are temporary. The rock recovered in the core is then described in detail and chemically assayed to quantify the abundance of metals in the rock. If signs of mineralization are favorable, further drilling will likely follow in order to more thoroughly evaluate the extent and grade of mineralization.
Mineral Development Process
The objective of private mineral exploration is to discover a new and economically-feasible mineral deposit or expand the size of a known deposit. Finding mineralization in a few drill cores, no matter the richness, does not make a mineral deposit. At this point, the site of mineralization would be called a mineral prospect. After initial favorable results, a time-consuming (multi-year) and expensive (millions of dollars) program of follow-up core drilling and assaying must be conducted to prove out the areal extent, thickness, depth below surface, and concentration of metals (grade) before it can qualify as a mineral deposit. Whether this mineral deposit can be economically mined will require that the value of the defined ore body be compared to the labor and infrastructure costs related to building the mine and processing facilities, mining and transporting the ore, crushing and processing the ore, recovering the metals, developing sound environmental mitigation, and planning for mine closure. To properly evaluate these costs, environmental baseline testing must be conducted and a mitigation plan developed. In addition, metallurgical testing must be done to determine whether the metals can be separated from the particular type of rock, and at what cost. A complete economic feasibility study will incorporate all steps needed for the overall plan from the start of mining to the point of product sales to mine closure.
The environmental review process is one step in the overall process. Another significant task is to raise capital for building the mine and facilities, which is usually in the range of hundreds of millions to billions of dollars. There is a long list of possible reasons, such as a drop in the metal price, as to why a mineral deposit discovery may not be developed into a mine.
There appears to be at least eight non-ferrous metallic mineral deposits that currently have; significant economic interest in terms of substantial private capital investment, have had the delineation completed to point that a significant deposit is identified, and have had economic feasibility studies started or completed. Those deposits and associated companies are as followed:
- PolyMet's NorthMet deposit (Duluth Complex)
- Twin Metals' Nokomis, Birch Lake, and Maturi Deposits (Duluth Complex)
- Teck American's Mesaba Deposit (Duluth Complex)
- Cardero's Titac and LongNose titanium deposits (Duluth Complex)
- Rio Tinto's Tamarack Deposit (Tamarack intrusion)
A map displaying the location of these mineral deposits is found here.
The time-frame from discovery to development is measured in decades for the eight Duluth Complex mineral deposits listed above. Copper & nickel mineralization was first discovered in rocks along the South Kawishiwi River in 1948. This sighting led to the discovery and delineation of most of the known Duluth Complex mineral deposits between the years 1950 and 1975. Recent technological advances in hydrometallurgical extraction of metals and increasing global metal prices have brought about new economic feasibility studies. PolyMet has the most advanced project and is currently writing a Draft Supplemental Environmental Impact Statement (SEIS).
If you have additional questions on this topic please contact:
Dennis Martin, Mineral Potential Manager
MN DNR - Division of Lands and Minerals
500 Lafayette Road
St. Paul, Minnesota 55155-4045
tel. 651-259-5405
fax 651-296-5939
dennis.martin@state.mn.us
What are the State's ownership rights related to surface and minerals?
The information provided for this question is current as of March 7, 2012. For further information on this topic you can preview or download the PowerPoint presentation titled 'Minnesota's Mineral Ownership' (file .pdf, 110 KB) and/or the fact sheet from November 2000 titled 'Fact Sheet: Mineral Rights Ownership in Minnesota' (file .pdf, 19 KB)
Mineral estate vs. surface estate
Mineral estate
A mineral interest is an estate in real property that is referred to as the mineral estate. The mineral estate includes, among others, many different metal ores, coal, oil, natural gas, gemstones, and dimension stone. The mineral estate consists of the following:
- the right to use as much of the surface as is reasonably necessary to access the minerals,
- the right to execute any conveyances of mineral rights,
- the right to receive bonus consideration,
- the right to receive rentals, and,
- the right to receive royalty.
The mineral estate owner has the legal right to convey any or all of these five mineral rights.
Surface estate
Like a mineral interest, the surface interest is an estate in real property. Fee simple ownership of the surface estate means that the owner enjoys all the rights that one can hold in the surface. However, the term surface estate can mean a number of different rights in the surface including the right to sell, lease, mortgage, donate, subdivide, or grant easements over the surface and the right to a stream of benefits from agricultural production and natural resource development of the surface. The rights can be granted for a period of years, a day, year, lifetime, or be inheritable.
Severed estate
A severed estate occurs when a property owner severs the mineral estate from the surface estate. Doing so, thereby creates two separate ownership interests that can be conveyed separately from one another (e.g. Owner "A" can sever the mineral estate, convey the surface estate to Owner "B" and later convey the mineral estate to Owner "C"). In Minnesota, severed mineral estate owners are required to register their mineral estate by recording a Statement of Severed Mineral Interest (Minnesota Statutes, section 93.52.)
State law requires that the State retain the mineral rights whenever it conveys real property. Thus, a severed mineral estate is created when the State conveys real property. After a conveyance by the State a private party owns the surface estate and the State owns the mineral estate. (Minnesota Statutes, sections 16B.286, 93.01-93.04, 94.14).
State leasing of mineral interests
The State may lease its nonferrous metallic mineral interests for mineral exploration and development (M.S. 93.25, Minnesota Rules 6125.0100 - .0700).
For further information on state metallic minerals leasing you can preview or download the PowerPoint presentation titled 'State Nonferrous Metallic Mineral Leases' (file .pdf, 116 KB).
If you have additional questions on this topic please contact:
Susan Damon, Transaction Manager
MN DNR - Division of Lands and Minerals
500 Lafayette Road
St. Paul, Minnesota 55155-4045
tel. 651-259-5961
fax 651-296-5939
susan.damon@state.mn.us
What are the State's regulations and reclamation rules related to mineral exploration and development?
Exploration drilling
There are many regulations to protect the environment during metallic mineral exploration, which typically has minimal impacts and they are temporary in nature. The Department of Health and Natural Resources are both involved. For example there are many rules in the Water Well Code that protect groundwater during exploratory boring.
These regulations must be followed before a company can do exploratory borings on either public or private land in Minnesota:
- Register the exploration company with the MN DNR,
- Obtain anexplorer’s license from the MN DOH
- Obtain a license for the drilling company with the DOH
- Notify both the MN DNR and the MN DOH at least 10 days prior to commencing an exploratory boring. The DNR will do a drill site inspection during the drilling activity to seek compliance with all relevant laws.
- On a state mineral lease the explorer must submit an exploration plan 20 days prior to the start of activities. The DNR reviews the plan prior to granting the right to proceed.
- Following completion of exploratory borings, the explorer must further comply with state law. They must submit a completed DOH report form to the MN DOH that provides details on how the explorer sealed the boring, which is another way to ensure that the rules for sealing borings was followed.
- The explorer must also submit a portion of the drill core samples to the DNR. These samples become public property, and this helps to limit future environmental impacts (or duplication of effort) by allowing others to view and analyze what was found.
Figure 9: Exploration drilling and water wells
Click to enlarge
To put the exploration drilling activity into perspective, we can compare the small number of exploration borings done to the large number of water wells and other wells done statewide, based on the MN Dept. of Health data for a period of 9 years. There were 1,031 exploratory borings during the timeframe 2000 through 2010 compared to 128,637 domestic water supply wells and other wells (fig. 9). Therefore, exploration drilling was a very small component of drilling in MN, and represented less than of one percent of the total drill holes in the state during the 9 years.
Preview or download the PowerPoint presentation titled 'State Oversight of Metallic Mineral Exploration Activities' (file .pdf, 1.15 MB) for supplemental information on state oversight of metallic mineral exploration activities.
This PDF includes embedded 'speaker notes' with additional information for select slides. The speaker notes can be viewed in Adobe Reader or Acrobat, and within the following internet browsers; Internet Explorer, Mozilla Firefox, & Safari. Google Chrome does not display the speaker notes.
Environmental review, permitting, and reclamation - DNR role
For information on the MN DNR's role in environmental review, permitting of mines, inspections, and reclamation rules and standards please visit the MN DNR's Mineland Reclamation webpage
Why Minnesota and what are the benefits to the Trust?
Mineral potential and infrastructure
Exploration companies have done research as to where mineral deposits are found in other parts of the world, and have concluded that the bedrock geology in Minnesota is prospective for the discovery of new mineral deposits. In other words, there is high potential for undiscovered metallic mineral deposits to exist in parts of Minnesota. Mineral deposits do not exist in an even distribution across the nation or the world. We cannot choose where we want the mineral deposits to be located. This is probably the most important feature that attracts new exploration investment to Minnesota. In addition to the high mineral potential, there are many other business reasons that companies may choose to search for new mineral deposits in Minnesota. There has been iron mining in northeastern Minnesota for more than 100 years. Minnesota has a long list of businesses that supply goods and services to the mining sector. There is electrical power capacity available in the northeast region. There is infrastructure such as a good road system, railroads and Great Lakes ports with the capacity to move bulk commodities. Minnesota offers a safe, conflict-free work environment and a stable democracy with a long history of honoring the rule of law. When compared to many other countries in the world, all these factors add up to produce a positive risk environment for the private investors.
Economic interests
New mines serve as a primary source of raw materials and new wealth for our state and the nation. It is clear that our growing population consumes more metals every year for basic necessities, such as; our buildings, to grow our food, and to manufacture our everyday products. The mining sector also contributes directly to Minnesota’s economy. A 2009 University of MN economic study describes the valuable economic impact of mining upon the economy of northeastern Minnesota.
“From a regional point of view, for the period from 2001 to 2007, compared to other sectors of the economy in Northeast Minnesota, mining has led all other sectors contributing to Gross Regional Product (GRP) by as much as a factor of three. (See the report Executive Summary, page 3)”
This report describes the significant impact that current mining has and the even larger potential future mining impact on total numbers of high paying jobs, the revenue to the state, and revenue to the school and university system. Based upon this report, mining is the industry sector that can improve the standard of living for a significant portion of the population of Northeast Minnesota, as farming does elsewhere in the state.
The Mesabi Iron Range mining district has played an important role in the economic development of the United States, but it has also been important for other reasons. One example was to supply the iron ore needed for World War II. The iron ore produced by MN supplies approximately 2/3 of the iron needed for the blast-furnace steel sector in the United States. Taking a closer look at steel production, the steel produced in the United States generates approximately only half the green-house gas emissions compared to the same quantity of steel produced in China. "Environmental leadership" is possible for the other metallic minerals also. For example, advances in hydrometallurgy, or the ability to extract metals such as copper from mine rock using acids within tanks with processing plants, rather than the older smelting technology that creates more air pollution. But the technology is new, and it will require private capital investment. Minnesota could be contributing to progress in this sector, with its tough environmental laws that limit the impacts and its excellent research facilities to help find solutions to the technical issues.
Benefits to State Trusts
The discovery and delineation of a metallic mineral deposit typically costs tens of millions of dollars and may take a decade or more. In addition, the economic feasibility, environmental review, and development phase may take another decade or more. This is not done with public funding, but rather with private capital that is considered to be a high-risk investment. There is tremendous global competition for that private capital to be spent in other states or countries. DNR has a fiduciary responsibility to administer the land and mineral rights for the Permanent School Trust Fund (PSTF) and other State Trusts. These State Trusts benefit under the current system whereby private capital is spent in Minnesota on or near the PSTF mineral rights. It is the private capital that discovers the mineral deposits on Trust minerals, and delineates the inherent value for the Trusts, and does the mining that pays royalties to the Trusts. This is an essential step in the long process of creating revenue for the Trusts. Without the initial steps, there can be no future mineral revenue to the Trusts, because there will be no discovery and development. Thus we are in competition with other countries for the private capital that funds the private exploration industry.
More than 80% of the revenue in the corpus of the School Trust since it’s creation more than a century ago has come from mineral revenue. The potential new revenue from mineral rights for the Trusts is more than one billion dollars over the next 20 to 40 years, based on existing leases for three known deposits. The existing state mineral leases on three known deposits-- Nokomis, Birch Lake, and Mesaba-- would pay the School Trust more than a billion dollars total over the life of the mines if they obtain environmental permits and are economically feasible. Exact predictions are not possible because they depend upon future metal prices, which vary over time. In another example, if the Eagle mine that is being constructed in Michigan, were found on School Trust mineral rights with a state of Minnesota mineral lease, the royalty from that 40-acre parcel alone would be in the ballpark of one-half billion dollars paid to the School Trust as the total royalty over the 10 year mine life. This is the “best-case” scenario from likely mineral deposits, and this may not happen in Minnesota, but the legal framework is here for it to happen. Which 40-acre parcel is the one that contains the next valuable mineral deposit in Minnesota? We don’t know. Every time a parcel of School Trust mineral rights is not offered for state mineral lease, the odds of a new mineral discovery, and perhaps millions of dollars in royalty revenue to the School Trust is diminished. In other words, there must be land available for exploration in order for a mineral discovery to occur. The School Trust stands to gain more from a mineral discovery than any other means of revenue.
At least three exploration companies here appear to be currently looking for the same type of “Eagle” mineral deposit here in Minnesota. A similar, but smaller deposit with high platinum and palladium values has recently been discovered in the Thunder Bay area in a similar geologic environment to Minnesota. That discovery is currently going through the delineation phase by Magma Metals.
If you have additional questions on this topic please contact:
Dennis Martin, Mineral Potential Manager
MN DNR - Division of Lands and Minerals
500 Lafayette Road
St. Paul, Minnesota 55155-4045
tel. 651-259-5405
fax 651-296-5939
dennis.martin@state.mn.us