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NorthStar Economics: Proposed Gogebic taconite mine will create thousands of jobs and generate billions in economic benefits and tax revenues
4/12/2011

Contact: Mr. Bill Williams
President, Gogebic Taconite
(715) 561-2601

Mr. David Ward
President, NorthStar Economics, Inc.
(608) 279-3393

Economic Impact study predicts widespread economic benefits

HURLEY – The construction and long-term operation of an iron ore mine in the 12-county Gogebic region of Northern Wisconsin and the Upper Peninsula of Michigan will generate significant, widespread and long-term economic benefits, according to an economic impact study recently completed by NorthStar Economics, Inc. — a nationally recognized economic consulting and research firm, specializing in analysis of the Wisconsin economy. The NorthStar Economics study identified areas of economic impact across a variety of sectors, including: long-term local and regional employment and economic impact projections for mining operations; short-term economic impact from construction of the mine; the current economic climate in the 12-county region; and the economic impact of similar mines in neighboring states. The study was conducted on behalf of Gogebic Taconite.

“NorthStar’s comprehensive economic impact report shows that the proposed Gogebic Taconite mine will create thousands of family-sustaining jobs here in Northern Wisconsin and around the state,” said Bill Williams, president of Gogebic Taconite. “Everyone knows Wisconsin workers need these jobs, Wisconsin suppliers and manufacturers need the business, and our communities need the vital tax revenues this report indicates will be created by Gogebic Taconite.”

The study estimates that the proposed Gogebic Taconite mine, producing an annual production level of eight million tons of ore, will create 2,834 long-term jobs; including approximately 700 direct mining jobs. Doubling the mine output to an annual capacity of 16 million tons would double employment to 5,668 long-term jobs; including 1,400 family-sustaining, direct mining jobs. The estimated average labor income for direct mining jobs is expected to be nearly $83,000, including benefits — which is 87 percent more than the Wisconsin all-industry average labor income. Total job creation estimates are based on both jobs directly created by the mine operation and jobs created in related industries such as suppliers and purchasers of mining product and businesses that will benefit from increased consumer spending.

According to the NorthStar report, the Gogebic Taconite mine will generate $604 million in annual economic impact when producing at a yearly level of eight million tons of ore; and increase to $1.2 billion in annual total economic impact at a yearly production level of 16 million tons of ore. State and local tax revenues will top $17 million annually at a production level of eight million tons of ore and more than $34 million at a level of 16 million tons.

In addition to significant long-term job creation, the proposed Gogebic Taconite mine will create 3,175 construction jobs during a two-year construction period. Construction of the mine will create an estimated total economic impact of $2 billion and generate nearly $21 million in state and local tax revenues.

Business and industry outside the immediate 12-county region will also benefit from the Gogebic Taconite mine. A majority of the jobs created as a result of mining would be multiplier-effect jobs created by suppliers, transportation, manufacturing and other businesses. Wisconsin-based companies such as P&H Mining Equipment Inc. and Bucyrus International Inc., along with Wisconsin suppliers from Caterpillar Inc. and Metso Corp. will provide equipment critical to the mining operations. Vehicle, ship and other metal manufacturers located in Southeastern Wisconsin and the Fox Valley will depend on products produced from ore mined at Gogebic Taconite. These jobs are in addition to the jobs created, as mining workers with family-sustaining wages purchase goods and services from local businesses.

The 12-county Gogebic region — which includes the Northern Wisconsin counties of Ashland, Iron, Douglas, Washburn, Bayfield, Price, Vilas, Oneida and Forest, as well as the Upper Michigan counties of Gogebic and Iron — currently suffers from job loss, stagnant business growth and a declining population. Median family income in the region lags behind both state and national averages, and regional unemployment is also higher than state and national averages.

“The economic conditions within the 12-county region in question are below both state and U.S. averages. This is a region that is losing population and jobs,” said David Ward, president of NorthStar Economics. “The economic success of any region is dependent upon a stable work force earning wages, paying taxes, purchasing property and buying other goods and services. A new enterprise in the region, like Gogebic Taconite, has the potential to draw hundreds of new workers to the area.”

Pointing out that Wisconsin’s neighbors — Minnesota and Michigan — have long enjoyed the economic benefits of iron ore mining, Iron County Board Chair Dennis DeRosso said, “Our neighbors in Minnesota and Michigan reap the economic benefits of iron ore mining. It’s time for Wisconsin to prosper from iron mining too.”

There are currently six iron ore mines in Minnesota and two in Michigan. These mines generate billions of dollars in annual total economic impact for their respective state and local economies and employ thousands of workers with quality jobs. Nationally, metal ore mining creates more than 88,000 direct mining jobs and contributes more than $37 billion to the total U.S. Gross Domestic Product.

Gogebic Taconite, a subsidiary of Cline Resources, is exploring the possibility of developing a portion of the Gogebic iron deposit in Ashland and Iron Counties. The company holds an option to lease the mineral rights on the entire deposit, but has indicated it would concentrate on determining whether permits could be obtained for approximately 4,500 acres of the 22,000-acre deposit. For more information and to obtain a copy of the economic impact study, please visit http://www.gogebictaconite.com/enconomic_study.html
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