The $76 million deal includes mineral rights to about 56,000 acres along the Kawishiwi River and Birch Lake from south of Ely, Minnesota.
Structurally, the deal is complex, involving both a subsidiary and a partner of Duluth Metals, the Chilean mining giant Antofagasta PLC. But as far as the land is concerned the deal is simple, two adjoining areas become one.
Platinum group metals include copper and nickel, along with precious metals like platinum, palladium and gold.
Duluth Metals President Vern Baker said the combined project also provides advantages to regulators like the state of Minnesota.
“Instead of the state having to permit, and the federal government having to permit two completely separate projects … we can bring all that together,” he said. “We have a smaller impact on the environment. It’s one that really looks exciting.”
This project is not without controversy, though.
Platinum group metals are found in sulfide bearing rock. Poor mining practices in western states have created severe pollution from acidic runoff.
Environmentalists have criticized Polymet’s open pit mining proposal as a serious threat to the St. Louis River and the Boundary Waters Canoe Area Wilderness.
So far, the operations still lack a permit to conduct mining.
Duluth Metals President Baker won’t predict a timeline for permitting but he says the goal is to move as quickly as possible.
Franconia’s Board of Directors unanimously approved the deal, which still needs two-thirds approval from shareholders in February, and approvals from Canadian officials.
Story by by Bob Kelleher, Minnesota Public Radio