Time to Value the Water

By JT Haines, March 24, 2014

Excellent commentary in MinnPost this morning, entitled “Water or Sulfide Mining: Which is more valuable?” The piece concludes as follows:

“When one considers the rapidly depleting Oglala Aquifer, growing droughts, and climate change, the value of water can only increase. And yet, we’re seriously considering taking on an industry that promises 500 years of water pollution? That’s foolish.

So, why mine and take the chance of destroying such a rich natural resource, the industries it supports, the value of lake property, and the tax base? This is a case where the minerals are more valuable staying right where they are. The real strategic resource that Minnesota possesses is our water.”

My take: I’m thrilled to see this key part of the nonferrous mining debate being taken up more and more. One of my public comments to the DNR and Governor Dayton on the PolyMet SDEIS was that it is a dramatic failure of the document that it does not consider in earnest the value of the water (used and otherwise at-risk) over the course of the time frames discussed, including the potential impact on such value in the event of future contingencies including shortages, spills, or other catastrophes.

I’m sure project proponents will attack today’s MinnPost commentary for the back-of-napkin nature of the calculations offered — it is certainly not a scientific or complete calculation by any stretch. The authors’ ultimate point, however, is that whatever the figures, we obviously need to be considering all relevant valuations as part of the official process. And I share their intuition that we are dramatically overvaluing the value of the mining, and undervaluing the value of not mining. Incidentally, this intuition is based on decades of collective experience by society with profit-taking resource extractors, so in that sense it is scientific. We know how the costs and the benefits get divvied under the current corporatized system. We don’t have to “wait and see” to figure out how that goes anymore.

Notably, it seems to me that in one sense the calculation they offer in support of their point is actually more generous to the proposed project than is even necessary: The authors roughly compare the value of our water and associated tax and employment base to the expected profits for PolyMet/Glencore (which they peg at $4B based on PolyMet’s projections). For Minnesotans, though, isn’t the important comparison the value of the water (and associated benefits) to the economic impacts from the mining strictly for Minnesota? In other words, the discussed “rosy” 4B number isn’t really even what matters for us, it’s whatever the Minnesota portion of that would be, minus costs. Given the involvement of international stockholders, and the lack of evaluation of the value of leaving the water and other resources alone, you can believe the 4B figure isn’t the one that matters to us.

Simply put, the analysis of the value of water vs the value of mining is not sufficiently present in the official process to date, especially vis a vis the value of leaving certain resources untouched. Thankfully, these authors are among the increasing number of people around Minnesota who are speaking out with the message that that old way of business is over.

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