Laurentian Vision Partnership

Meeting LIX Report

"Planning and Project Implementation 2015"

Wednesday, January 28, 2015Mining and Reclamation Classroom I Chisholm, Minnesota

L a u r e n ti a n V i s i o n P a r t n e r s h i pM e e ti n g L I XJanuary 28, 2015

“Planning and Project Implementation 2015”

M E E T I N G O B J E C T I V E

The Facilitator reviewed the past meeting results and next steps, highlighted meeting objectives and went over the agenda for today’s meeting.

Minnesota’s Iron Range mining and community landscapes are always changing. From the advent of new processes to reclaim iron units to the development of non-ferrous and potential iron making facilities, mining’s link with the land and communities continues to evolve. As existing mining operations expand physical footprints and new facilities are constructed, the relationship between mining and community growth is of increased importance to mining operations, cities and citizens. LVP, through a collaboration of stakeholders, addresses the challenges of community expansion, resource protection, land retention, reclamation, environmental permitting, local revenue generation, and reuse.

The focus of this meeting is on several topics including an overview of renewed mining development opportunities on the Cuyuna Range; an update on the evolving Twin Metals of Minnesota non-ferrous mining project located on the East Range; a timely update on the Highway 53 relocation project in the Quad Cities; as well as an overview of upcoming transportation projects scheduled for the region. Finally, we will hear progress reports from regional groups and work groups including information on community comprehensive plans, and progress on the Mine Mapping Project.

M E E T I N G S U M M A R Y

Laurentian Partnership Debriefing Participant introductions and expectations Opening comments Review of Meeting LVIII results and next steps (Oct 2014) Overview of meeting objective and agenda

P R E S E N T A T I O N

Bringing Mining Back to the Cuyuna Range…Renewed Mineral Development Possibilities and Opportunities

Kevin EaganAttorney

Michael BurtonConsultant, Senior Executive Corps, Brainerd

Lakes Area Economic Development Corp

Jim SellnerPE, MDNR, Lands & Minerals Division

A three member panel shared recent developments, discussions and the potential for renewed modern mining and recreation on the Cuyuna Range. Kevin and Michael shared a PowerPoint presentation that looked at the past mining and its significance on the Cuyuna Range from 1890 to 1960 as a thriving mining area and backbone of the local economy. They highlighted the more recent past from 1960 to 1980 explaining how mining played out and interest in reclaiming the area as a recreation destination with the creation of the Cuyuna Country Recreation Area in 1993, and its ongoing development as a premier mountain biking area and natural recreation area. Most recently, in 2011-2012, the potential for manganese was explored and a rich deposit identified near Emily. Cooperative Mineral Resources (CRM) has moved ahead with an MOU with two Canadian companies in a pilot plant joint venture to produce green manganese based batteries as a mining and value added opportunity. Star Minerals Group and Octopus Technologies are working with CRM on this effort today. The future for renewed mining includes the manganese opportunity and legacy iron ore in remaining stockpiles and tailings basins that could be accessed. The Brainerd Area Development Corporation is leading a public process working with area mining and recreation interests to look at the future and seek the social license to have a balanced resource use for both recreation and renewed mining. More to come on that as the process and discussions continue.

Jim Sellner, MDNR followed with a supporting PowerPoint presentation that highlighted mineral revenue and leasing generated by the state lands as well as the iron ore and manganese potential on the Cuyuna Range today. He reviewed the types of state administered lands and mineral leases that are managed by MDNR and shared information on the number of leases, both active and terminated from 2004 to 2012 that exist across the Cuyuna and Mesabi Iron Ranges. He Reviewed world iron ore production and how US and Canada production types are an issue, and demonstrated the revenue impacts from 2003 to 2012 generated by state lands and how significant these revenues have been from 1892 to 2012 for the state. He then shifted his focus to the Cuyuna

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Range, its historical development beginning in 1904, closure in 1984, and manganese startup interest in the early 1990s followed by the major recreation area designation in 1994 and then manganese mining development proposal in 2012. The manganese deposit on the Cuyuna is the largest identified resource deposit in North America and is poised for future development. The need to balance recreation and mining interests is the key issue and challenge going forward. He concluded with a series of historic photos of many of the 45 mines and the companies involved in iron mining on the Cuyuna, showing both maps and photos of these legacy producers. Also provided historic photos of the communities and how they grew and thrived at one time, as mining was a major economic generator.

The panel addressed a number of questions from LVP members and was asked to provide an update in the future as planning and proposed new recreation and mining developments unfold. The panel presentations, perspectives and level of detail were well received by members, and the presenters were thanked. Copies of the PowerPoint slide presentations are available on the LVP website at www.lvpmn.org.

P R E S E N T A T I O N

Twin Metals of Minnesota Project Update Bob McFarlinVice President of Public & Gov’t Affairs, Twin Metals

Bob requested the opportunity to provide an update on the post prefeasibility work of Twin Metals and a significant recent announcement on ownership changes and what that means for the project. He shared a PowerPoint presentation and gave a brief overview of the project and announced that Twin Metals Minnesota (TMM) is now a wholly owned subsidiary of Antofagasta PLC, one of the world’s leading copper mining companies. Commented on the significance of the change and the technical and financial strength that Antofagasta brings to the project. He proceeded to outline the project location and characteristics, prefeasibility study completion last June and its release in October and the next phase in the projects development – Mine Plan of Operation (MPO) development. Proceeded to share the conceptual mine plan details for the project site as outlined in the prefeasibility report which will be subject to change as more detailed studies are completed in the next phase. Went on to review TMM’s environmental commitment, the typical environmental review process leading to permitting of the mine and where TMM is in the process, commented on the job creation potential to construct and operate an active mine, its 30 year planning period and the level of startup investment and capital to be invested over the life of the mine. TMM has invested over $250 million to date with offices in Ely and St. Paul and hiring of consultants and engineers to support the feasibility and planning underway. Bob addressed questions on Antofagasta and their financial strength and commitment to Minnesota as well as specifics on the conceptual mine plan, value added processing opportunities and timing of a development.

Bob’s presentation was well received by members; a copy of the PowerPoint presentation is available on the LVP website at www.lvpmn.org.

P R E S E N T A T I O N

Quad Cities/Highway 53 Relocation Project Update and Overview of Other Regional Transportation Projects in the Region

Pat HustonMnDOT, Hwy 53 Relocation Project Director

Duane HillMnDOT, District 1 Engineer

The transportation presentations bring topics to the table, an overview of the upcoming transportation projects planned for the area, and an update on the Highway 53 project with the recent release of the draft Environmental Impact Statement and its recommended preferred alternative route.

Duane Hill began with a review of regional transportation projects that have been programmed for construction in 2014- 2018. He shared a handout on District 1 which included organizational information, revenues and distributions, a financial snapshot shared with the legislature, overview of planned investment priorities for a 20 year planning period and concluded with construction program projects for 2014 to 2018 and specifically for project in 2015. He reviewed the 2015 list, and highlighted carryover and new projects with dates and costs and a work description. A total of 27 projects are planned in 2015. He commented on the growing need for pavement and bridge updates needs, and that this legislative session is expected to focus on transportation funding and long term needs. Duane addressed a number of questions on several specific projects planned for this year, use of taconite tailings and overburden rock as part of the aggregate material for road reconstruction and construction, and road relocations including Highway 53 and others in the future.

Pat Huston introduced himself as the new project manager for the Highway 53 Relocation Project including his background and what he intends to accomplish in the next year as this project moves ahead in the review and approval process. He said this project was the highest priority project at MnDOT and is an urgent need project. His PowerPoint presentation highlighted the status of the project today, where we are going and what we can expect to see as the process unfolds in 2015. He began with the status of the

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environmental review with the recent publishing of the Draft Environmental Impact Statement (DEIS), a public hearing held on January 22nd, and the continued public review period thru February 5 th. Explained the five alternatives outlined in the DEIS including two “no build” and three “build” options, and the recommendation that option E2 be the preferred alignment. Mapped out the three build alternatives and explained their similarities and differences and why the E2 route was the preferred alignment. Expanded his overview of the E2 alignment with a superimposed bridge in a site photo and how it was scaled compared to Duluth’s Blatnik Bridge; how it emerged as the preferred option based on engineering and technical analysis, not cost; and the preliminary estimated total project cost in the range of $180 to $240 million. Shifted his comments to the current and next steps in the process, including timing and approval of the final EIS, remaining challenges for a funding gap, utility and trail relocations, easement extensions and the overall construction schedule. He concluded his presentation explaining the use of a Construction Manager/ General Contractor approach to project design and development and construction and why; the upcoming work of the Visual Quality Committee of local folks and development of visual needs and workshops; the formation of the TH 53 Agency Sub-Cabinet in February with multi-agency staff leaders meeting to work and coordinate the project review, funding and development work. Addressed a number of questions on the project related to the lifespan of the bridge, source of steel, and the need for blasting setbacks. He thanked the LVP for their continued interest and support in getting this project done.

This panel presentation was well received by members; a copy of the PowerPoint presentation is available on the LVP website at www.lvpmn.org.

P A R T N E R S H I P P R I O R I T I E S

Regional Group Action Progress Reports

The following Regional Groups were present and provided an update on their major activities related to LVP.

REGIONAL GROUP CURRENT PROJECTS

Western Mesabi Mine Planning Board (WMMPB)

Doug Learmont

Reviewed specific legislative priorities related to the Hill Annex Mine, highway projects, deep drilling along the formation, fiscal disparities, Essar, Magnetation and community comprehensive planning. Concluded with a comment on the new book on sustainable mining that will be published and available soon.

East Range Joint Powers Board (ERJPB) Jeff Jacobsen, Biwabik

Highlighted two projects related to development of a new water source and possible service to Aurora and Hoyt Lakes as a joint venture; and the relocation/rerouting of County Road 715 (Whiskey Road) to accommodate ArcelorMittal Steel’s expansion plans.

Quad Cities Charlie Baribeau/Bernie Collins

Highlighted several business expansion projects and their status including Tri Tech expansion, bonding dollars for utility needs in Midway, Joy Global expansion interest, Range Mental Health and AEOA joint venture and Ulland Construction facility development on Highway 135.

Visual Quality Committee has been formed for Highway 53. Jon Cherry will be keynote at the annual Chamber dinner.

Central Iron Range Initiative (CIRI) Pete Kero/Rick Crum

Provided a Brownfield Project update highlighting the Phase 1 project site visit by the EPA in October as a setup for a Phase 2 application and request for $600,000 in 2015. The application was submitted in mid-December with 19 communities participating from across the Iron Range. The project administrator was changed from Chisholm in Phase 1 to Virginia for Phase 2. During the EPA visit they toured PolyMet mine site and commented on the strong and effective coalition of communities that participated in the Phase 1 project. We expect to hear on Phase 2 request in summer 2015.

P A R T N E R S H I P P R I O R I T I E S

Work Group Action Progress Reports

Individual work group representatives provided the following reports and next steps.

Action Areas Work Group Priorities Work Group Representative(s) Update/Next Steps

TARGETING PRIORITY PROJECTS

LVP Innovation Grant Program Budget

Jim Plummer, IRRRB We continue to look for good bricks and mortar projects with $200,000 available for projects. We currently have two projects in the queue which will be considered by the Coordinating Committee.

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DELIVERING TOOLS AND RESOURCES

1. Community Comprehensive Plan Update

Whitney Ridlon, IRRRB Reviewed the purpose and requirements for comprehensive community plans that are needed to be eligible for IRRRB public works funding. Commented on the maps and tools available and the importance of taking mining and the formation into consideration in these plans. Referred to baseline information and maps available to support this work.

2. “Mine Mapping” Project Update

Dan Jordan, IRRRB Map updating us in process and will be on the web site soon. Looking at south formation limit issues based on the group input and planning last spring and fall. The Minnesota Minerals Coordinating Committee is looking at funding deep drilling to the south to better define and update the maps for future planning. Look on the LVP website for updates as released this winter/spring.

3. Mesabi Iron Range Large Scale Projects Map – Quarterly Update

Dan Jordan, IRRRB and Tim Pastika, MnDNR

Updated map will be placed on the wall in the classroom meeting room soon. There were no additional updates suggested by members this quarter.

O T H E R B U S I N E S S U P D A T E S a n d F U T U R E T O P I C S

Future Topics/Presentation Recommendations of LVP Coordinating Committee (December 2014)

The group discussed a number of possible discussion topics highlighted on the agenda by the Coordinating Committee. The following topics were highlighted as priorities for the May 2015 meeting, with others continuing on our list for future consideration in 2015: Legislative update/wrap-up PolyMet Supplemental EIS review and permitting update Northshore long range reclamation plan – Peter Mitchel Mine Class One Airshed Application and Implications – Fond du Lac Mesabi Nugget update – Tom Lutes DRI developments (pending/future topic) Reclamation at Hibbing Taconite – innovation/reclamation project

C O O R D I N A T I N G C O M M I T T E E M E E T I N G

The next Coordinating Committee will be held on Friday, April 24, 2015 from 9:00 a.m. to noon at the Mining and Reclamation Classroom, at Minnesota Discovery Center in Chisholm. Work Group and Regional Group representatives will be asked to assist in developing the May 2015 membership meeting agenda.

L V P Q U A R T E R L Y M E E T I N G

The next Laurentian Vision Partnership meeting will be held on Tuesday, June 2, 2015 from 9:00 a.m. to 12:30 p.m. in the Mining and Reclamation Classroom at Minnesota Discovery Center in Chisholm.

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MEETING OBJECTIVEMinnesota’s Iron Range mining and community landscapes are always changing. From the advent of new processes to reclaim iron units to the development of non-ferrous and potential iron making facilities, mining’s link with the land and communities continues to evolve. As existing mining operations expand physical footprints and new facilities are constructed, the relationship between mining and community growth is of increased importance to mining operations, cities and citizens. LVP, through a collaboration of stakeholders, addresses the challenges of community expansion, resource protection, land retention, reclamation, environmental permitting, local revenue generation, and reuse.

The focus of this meeting is on several topics including an overview of renewed mining development opportunities on the Cuyuna Range; an update on the evolving Twin Metals of Minnesota non-ferrous mining project located on the East Range; a timely update on the Highway 53 relocation project in the Quad Cities; as well as an overview of upcoming transportation projects scheduled for the region. Finally, we will hear progress reports from regional groups and work groups including information on community comprehensive plans, and progress on the Mine Mapping Project.

PROPOSED AGENDA

9:00 Laurentian Partnership Debriefing Randy Lasky, Facilitator Participant introductions and expectations Opening comments Review of Meeting LVIII results and next steps (Oct 2014) Overview of the meeting objective and agenda

9:10 Presentation: Bringing Mining Back to the Cuyuna Range…Renewed Mineral Development Possibilities and Opportunities What’s been happening and where? What are the challenges and issues with exploration, leases and mineral rights,

conflicts with tourism, biking and the Cuyuna Country Recreation Area, and other challenges?

What can we expect in the foreseeable future?

Kevin Eagan Attorney

Michael BurtonConsultant, Senior Executive Corps, Brainerd Lakes Area

Economic Development Corp (BLADEC)

Jim SellnerPE, MDNR, Lands & Minerals Division, Hibbing

9:55 Presentation: Twin Metals of Minnesota Project Update Bob McFarlinVice President of Public & Gov’t Affairs

Twin Metals

10:25 Presentation: Quad Cities/Highway 53 Relocation Project Update and Overview of Other Regional Transportation Projects in the Region

Pat HustonMnDOT, Hwy 53 Relocation Project Director

Duane HillMnDOT, District 1 Engineer

11:10 Break

11:25 Partnership Priorities: Regional Group Action Progress Reports What’s happening in regional areas across the Iron Range?

o Western Mesabi Mine Planning Board (WMMPB) Doug Learmonto East Range Joint Powers Board (ERJPB) Curt Anttilao Quad Cities Charlie Baribeau and Bernie Collinso Central Iron Range Initiative (CIRI) John Fedo and Pete Kero

11:45 Partnership Priorities: Work Group Action Progress ReportsTargeting PRIORITY PROJECTS

o LVP Innovation Grant Program Update Jim Plummer, IRRRB

11:55 Delivering TOOLS and RESOURCESo Community Comprehensive Plan Update Whitney Ridlon, IRRRBo “Mine Mapping” Project Update Dan Jordan, IRRRB

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Partnership Meeting LIXWednesday, January 28, 2015 9:00 AM – 12:30 PM

Mining & Reclamation Classroom Chisholm

o Mesabi Iron Range Large Scale Projects Map – Quarterly Update Dan Jordan, IRRRB and Tim Pastika, MnDNR

12:15 Other Business Updates and Future Topics Randy Lasky, Facilitator

Future Topics/Presentation Recommendations of LVP Coordinating Committee (May 2015)o Legislative update/wrap-upo PolyMet Supplemental EIS review and permitting updateo Northshore long range reclamation plan – Peter Mitchel Mineo Class One Airshed Application and Implications – Fond du Laco Mesabi Nugget update – Tom Luteso DRI developments (pending/future topic)o Reclamation at Hibbing Taconite– innovation/reclamation projecto Other?

Future Topics/Presentations (Spring 2015 and beyond)o Iron Range Regional Planning – A regional approach to balancing immediate and long-term mining land retention needs and sustainability

expectations with community growth and development needso Regional environmental issues

- Discharge Water Sulfate Concentrations and Impacts Study (MPCA Wild Rice Study)- EPA Federal Haze Rules and Regulations and Federal Land Exchange- Proposed carbon rules and regulations

o Mercury air emissions studyo Iron ore price projections for the next 25-50 yearso Quad Cities T.H. 53 relocation/alignment study updateo Reclamation needs for changing stockpiles – How will reclamation needs and economic development opportunities be addressed as stockpiles

are moved and reused across the Iron Range?o Future underground mining?o Alternative iron-making evolutiono Titanium mining development – new technologyo Cooperative Mineral Resources, an overview of a new ManganiFerrous Iron Ore Mining Project o Future Charrettes for Quad Cities/Highway 53, KeeTac and PolyMet/East Range areaso New Innovation Grant project proposals and existing projectso Mesabi Nugget project updateo Create liaison with political representatives

Recognize role as forum (strategy on this); state, federal and county levelso Expand the scope of our mineral focus beyond iron

12:25 What’s Next? Facilitator Meeting Schedule (May 2015) Next meeting date and agenda

o Coordinating Committee – April 2015 Representative from each work group and each sub-regional group

o Laurentian Vision Partnership – May 2015? Wrap up announcements and conclusions

12:30 Adjourn

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