U.S. bans mining in parts of Minnesota, dealing latest blow to Antofagasta's copper project

Jan 26 (Reuters) - The U.S. Interior Department on Thursday blocked mining in part of northeast Minnesota for 20 years, the latest blow to Antofagasta Plc's (ANTO.L) Twin Metals copper and nickel mining project but a step officials said is needed to protect the state's vast network of interconnected waterways.

The decision further escalates the U.S. tension over where and how to procure the minerals crucial for the green energy transition. Copper and nickel are used to build electric vehicles, solar panels, wind turbines and other renewable energy devices.

While Congress and President Joe Biden have heavily subsidized mining and minerals processing, administration officials said the risk from a mine to northern Minnesota's ecology was too great.

"With an eye toward protecting this special place for future generations, I have made this decision using the best available science and extensive public input," said Interior Secretary Deb Haaland, who signed an order on Thursday morning withdrawing 225,504 acres in the Superior National Forest from leasing to mining or geothermal companies through 2043.

Chile-based Antofagasta's Twin Metals subsidiary said it was "deeply disappointed and stunned" by the move and that it remains committed to protecting its rights to access the mineral deposit.

The region is visited each year by more than 150,000 outdoor enthusiasts, many of whom have long feared that any mine disaster could pollute rivers and quickly spread through the 1.1 million acres of the Boundary Waters Canoe Area Wilderness and into the Great Lakes.

The underground Twin Metals mine would, if built, be a major U.S. source of copper and nickel. The only existing U.S. nickel mine is set to close by 2025.

Haaland's decision, which had been expected, came after U.S. officials canceled the Twin Metals leases last January and rejected the mine's plan of operations, steps that essentially killed the project.

Antofagasta sued last August, claiming the decision was "arbitrary and capricious." The leases were first granted in 1966 and have been passed between successor companies. No mining has taken place at the site, near the town of Ely. Thursday's move deals another roadblock to the project, regardless of the court's decision.

Republicans blasted the decision. "If Democrats were serious about developing renewable energy sources and breaking China's stranglehold on the global market, they would be flinging open the doors to responsible mineral development here in the U.S.," said Representative Pete Stauber, chairman of the House Committee on Natural Resources.

Administration officials said they do not believe blocking the Twin Metals project shows they do not support mining. "The department sees the value in critical minerals and their critical importance to the future of this country," an Interior Department official said.


Antofagasta has long said it would use the most-advanced equipment to protect the environment, but officials noted other recent mining disasters as evidence of "irreparable harm" should the company's efforts fail. Administration officials added they believed the region's economy would benefit more from recreational activity than mining.

The officials said it was unclear whether future administrations could reverse the 20-year decision. Only Congress can make the ban permanent.

"You don't allow America's most toxic industry next to America’s most popular wilderness," said Becky Rom of the Campaign to Save the Boundary Waters in response to Haaland's move.

The mineral withdrawal does not affect Minnesota taconite iron ore mines operated by U.S. Steel (X.N), ArcelorMittal SA (MT.LU) and Cleveland-Cliffs Inc (CLF.N).

The order also does not affect a proposed nickel mine from Talon Metals Corp (TLO.TO), which last year received funding from the Biden administration, nor PolyMet Mining Corp's (POM.TO) plans to build a copper and nickel mine in the state.

Reporting by Ernest Scheyder; Editing by Mark Porter and Daniel Wallis

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Covers the future of energy and transportation including electric vehicle and battery technology, with a focus on lithium, copper, cobalt, rare earths and other minerals, politics, policy, etc. Previously covered the oil and natural gas, including a stint living in North Dakota’s Bakken shale oil patch.