U.S. REPORT Noranda’s Lynne discovery sparks interest in Wisconsin

The recent discovery of a large zinc deposit at Noranda’s (TSE) Lynne project in Oneida Cty. has triggered renewed interest in Wisconsin’s potential to be a base metal producer. According to the state geological survey, the mining industry seems to be taking a curious, if cautious, look at exploration prospects along the Ladysmith-Rhinelander greenstone belt, which hosts at least three major base metal deposits, including Lynne.

“We’ve had several inquiries from other companies,” said Tom Evans, a geologist in charge of mineral resources for the survey. “Noranda started the ball rolling.”

Since the discovery in June, a few companies, including NDU Resources (VSE) and Placer Dome (TSE), have announced plans to explore for base metals in northern Wisconsin. There are indications that several more may join what could be called a modest rush into the area.

Evans points to three other positive developments that have helped to spark exploration interest in the state: the 1981 revision of previously prohibitive tax on mine profits; the lease of land in the highly prospective Oneida Cty.; and the optimism surrounding Kennecott’s bid for a mining permit at the Flambeau copper deposit. “There are some very positive signals being sent to the mining industry, and interest is very high” Evans said. “The People’s Republic of Wisconsin, as they used to call us, has undergone its own revolution.”

Base metals deposits are nothing new to Wisconsin. Until 1979, when the Shullsburg lead-zinc mine closed, the state enjoyed 165 years of mining in the Mississippi Valley- type lead-zinc district in the southwest. During 1976-1980, immediately after Exxon’s discovery of the Crandon zinc-copper deposit, at least 40 companies were actively exploring in the state.

But that figure has dwindled to below five in recent years, largely a result of strict environmental regulations, heavy tax burdens and negative public attitudes toward mining.

In Wisconsin, companies must obtain approval from the Department of Natural Resources for their mining and reclamation plans before they can secure a mining permit. The would-be miners must also prove that the plan they have chosen will “minimize” environmental impacts.

For Exxon, which estimated a 70-million-ton deposit grading 5% zinc and 1% copper at Crandon as early as 1977, the headaches created by the permitting process may have proved too great. In 1986, the company abandoned its bid for a mining permit, deeming the project unfeasible.

High on the list of environmental concerns is the fate of hundreds of acres of wetlands that dot the northern Wisconsin landscape. One of the deterrents to the development of the Crandon deposit was the potential destruction of 80-90 acres of wetland, a natural habitat for a variety of wildlife. Both the Flambeau and Lynne deposits are also surrounded by the sensitive swamps.

“Wisconsin is a tough state environmentally no matter what you do,” Evans said. The biggest problem is not so much the environmental restrictions themselves, but the time required to secure the necessary permits, he added. It has taken Kennecott three and a half years to obtain a mining a permit, and the battle is not over yet. Considering the cyclical nature of base metal prices and the cost of delaying production, companies are often unwilling to wait that long.

Evans said the socio-economic impacts of the mining industry are also raising some questions. In Wisconsin, where mines have tended to be short-lived, people are concerned about reviving an industry that provides only short-term employment prospects. Many would rather suffer unemployment than encourage the boom-and-bust economies that the mining industry tends to create.

These socio-economic concerns are taking centre stage at the current Flambeau public hearings because many citizens are worried if Flambeau is allowed to go ahead, it will set a precedent for other mining projects.

But if Kennecott is successful in securing a mining permit for Flambeau, the growing interest in Wisconsin’s mineral resources may get a much-needed boost.