Sulfide Minings Jobs vs. Reality

Mine proposals often start out with extremely high job predictions, only to have these whittled down as the design is developed.

But these early projections can significantly influence initial public and policy-maker decisions about whether the operations are a good deal for the state.

Timeline of PolyMet Job Predictions

  • 1999 – PolyMet estimated it would employ between 425 and 450 people, and that indirect employment would create up to 3,600 jobs in the Iron Range. The mine’s life span was predicted to last for possibly 40 years.
  • 2000 – PolyMet’s predictions were more optimistic, citing 450 jobs at the mine and processing plant, and a mine life of up to 45 years. PolyMet used a multiplier to calculate indirect employment of five to seven indirect jobs per direct job, a projection far beyond others in the region (another study on mining employment by the Bureau of Business and Economic Research at the University of Minnesota Duluth (PDF), projects fewer than two indirect and induced jobs per direct job).
  • 2006 – PolyMet had revised the job number to 400 permanent workers, with construction jobs at no more than 1,000 (PDF).
  • 2011 – Employment numbers for the PolyMet project changed once again when the company made a significant design change in the project. PolyMet announced it would no longer produce cathode copper on site, but instead use a single autoclave to create copper and nickel concentrates to be shipped elsewhere to be processed. This change reduced permanent jobs to 360 when the mine is at full capacity, and construction jobs to 500. The decision to not produce cathode copper eliminated prospects for associated industries producing wire, tube and other products from the copper.

In addition, Polymet itself predicts that 55 percent of the jobs would be “non-local” and filled by individuals relocating to the area, 20 percent would be commuters from “centers such as Duluth,” and only the remaining 25 percent would be local hires (DEIS pg. 4.10-15).

Twin Metals

While Twin Metals is still developing its mine design, it has nonetheless made early predictions for direct and indirect employment, projections that are especially high.

  • August 2010 – Antofagasta Chairman Jean-Paul Luksic “estimated from 2,000 to 2,500 individuals would be hired as permanent operations staff” at the mine (TendersInfo.com. 4 Aug 2010).
  • December 2010 – Duluth Metals modified the prediction, stating the mine could employ 1,500 workers over a mine life of at least 30 to 40 years.
  • May 2012 – Twin Metals on its website predicted it will provide “hundreds, potentially thousands, of long-term, well-paying jobs for generations of Minnesotans.”
    • At the same time, company information provided to media predicted “more than 1,000” people employed, and a mine that could last “a half-century or more.” (PDF)

Further development and clarification of their project design will reveal if Twin Metals’ job projections are scaled back.

A Familiar Fluctuation

What is the likelihood that if permitted, Twin Metals and PolyMet will meet their job predictions? For help answering this, we can study metal mines opened or expanded in North America during the last decade and their job projections. An examination of five of these mines shows that job predictions can sometimes be met if metal prices remain high and if there are no technical challenges. But these are conditions that do not last, and meeting employment targets is short-lived.

The Safford and Morenci mines in Arizona are good examples. Both are owned by the same company, are adjacent to each other, and are located in an area with shared characteristics with northeastern Minnesota. Similar to the Iron Range, they are located in a mining district that has experienced booms and busts. The area encompasses two rural counties far from urban centers and with a high percentage of land owned by the U.S. federal government. And, like the Iron Range, the area has a long mining history.

At the height of the copper market in mid-2008, Safford and Morenci mines were at full employment. By the end of that year, the mines laid off 402 workers at Morenci, and 59 at Safford. As metal prices continued to fall, the mine made more layoffs. More than 600 layoffs were made before the year was over. In 2009, over 2,000 miners were laid off between the two mines. As copper prices began to increase again in late 2009 and 2010, the mine began hiring again (Freeport-McMoran Copper and Gold. May 2011).

The Safford and Morenci mines also provide information about what kind of economic prosperity metal mining communities experience. Even when these mines had full employment, the surrounding area continued to have high unemployment, higher than the average for the rest of the state (source). And, despite the opening of the Safford Mine, the population of the county went down. While the new mine created jobs, especially in the construction phase, the economic benefits were not sustained or uniformly shared.

“Contrary to the long-established assumptions…roughly half of all published findings indicate negative economic outcomes in mining communities, with the remaining findings being split roughly evenly between favorable and neutral/indeterminate ones  … Until or unless future studies produce dramatically different findings, there appears to be no scientific basis for accepting the widespread, ‘obvious’ assumption that mining will lead to economic  improvement.” – Source (PDF)