Wisconsin Democrats Kill Union-Backed Mining Legislation That Would Allow Iron-Ore Mining in Badger State

One year after fleeing the state to prevent Governor Scott Walker's bill that would curtail the collective bargaining ability of public employee unions from being voted on in the state Senate, Badger State Democrats have dealt a blow to private-sector unions.

Assembly Bill 426, which would've overhauled the regulatory and permitting for the mining of ferrous minerals in Wisconsin, was narrowly defeated by a 17-16 margin in the State Senate- 16 Democrat state Senators and GOP State Senator Dale Schultz, who represents the 17th District in Southwestern Wisconsin, voted against the measure.

Wisconsin’s mining laws were developed to regulate sulfide mining, which utilizes chemicals in its mining and refining processes. The ore deposit in Iron County is a ferrous (i.e., iron) deposit, not a sulfide deposit. The process relies on water and magnets rather than chemicals. Additionally, the Department of Natural Resources would have issued a permit for the mine only after it had confirmed that the mine would operate in an environmentally responsible manner.

The bill not only had support from Governor Walker, the Wisconsin GOP and businesses, but also labor unions including the International Union of Operating Engineers, Iron Workers District Council of the North Central States, the Wisconsin Pipe Trades Association, North Central States Regional Council of Carpenters; and the Wisconsin Laborer’s District Council.

Florida-based Gogebic Taconite had reached a Memorandum of Understanding with the unions that the company would use union labor and Wisconsin-based contractors while the mine was under construction and continue using labor once the mine was up and running. Gogebic had begun the exploratory process in Iron and Ashland counties in northwestern Wisconsin [see map above- NANESB!]. Once the anticipated deposits of taconite iron-ore were located, Gogebic estimated the mines and processing facilities could be operating for up to 35 years and create as many as 3000 jobs once the mine was up and running.

The anticipated job growth would not have been limited to northwestern Wisconsin. Two large mining equipment manufacturers- Joy Global [NYSE- JOY] and recently-acquired Caterpillar [NYSE- CAT] subsidiary Bucyrus International both operate out of the Milwaukee area and also employ union labor.

However, after the State Senate killed AB 426, Gogebic announced that they would be pulling out of Wisconsin altogether. Other mining companies are unikely to step in and fill the void unless the issue of overhauling regulations for mining ferrous minerals in the Badger State is revisited.

Since Gov Walker is facing a recall election this year, there is a school of thought that public employee unions like the AFSCME and SEIU pressured the Democrats to vote unanimously against AB 426 to deny Walker any sort of victory or good publicity heading into the recall campaign.

While some green activists claimed concern about environmental degradation or harm to adjacent wetlands, similar mining operations have been taking place for over a century just to the west in Minnesota's Mesabi range without the widespread environmental devestation activists claim is inevitable.