For decades, Maine was widely considered near impossible to crack in terms of mine permitting under stringent 1991 mining laws.
But following recent legislative changes — a new mining law went into effect in November 2017 — there are tentative signs that the industry is starting to reconsider the state as a mining jurisdiction.
To some degree, the new law is a compromise between pro-mining forces and mining skeptics. If it is a compromise, however, it tilts far in favor of those that do not want to see a large-scale mining industry in the state. Under the law, Maine bans open pits more than 3 acres in size, developing deposits with rivers running over them and tailings ponds to hold waste. It also requires projects to be backed with financial assurances for a worst-case catastrophe and that they use dry-stack tailings, which are considered more costly to operate than more typical tailings ponds.
The law also opens the door for smaller-scale underground projects, assuming they can meet, or economically justify, the still stringent criteria of Maine's mining law. On this, experts, investors and architects of the mining laws agree, based on recent interviews with S&P Global Market Intelligence.
James Kuipers, a mining consultant with expertise in state mining laws across the U.S. and Canada, described the before-and-after picture this way. "What they had before basically said you cannot mine," Kuipers said, referring to Maine's 1991 mining laws, which required mine discharges to meet the same quality guidelines for drinking water. The new mining law is more lenient. But still, he said, "this is going to take [a] unique occurrence of minerals for there to ever be any future mining."
Maine's 2012 mining law
To understand Maine's latest mining law, L.D. 820, you have to go back to 2012, when a Republican-controlled Legislature introduced and subsequently approved a mining law that looked set to boost resource extraction prospects in Maine. The impetus of the bill was to make permitting JD Irving Ltd.'s Bald Mountain gold-copper deposit, which would likely rely on bulk-tonnage mining in an open pit, possible. There was significant opposition to the Bald Mountain project, in part over fears the deposit's arsenic content and potential acid-mine drainage would contaminate water.
The 2012 mining law passed in the Legislature, but it created a legal crisis. Subsequent sessions of the Legislature would not approve needed regulations to back the law. These were being written by the state's Department of Environmental Protection, or DEP. The back and forth went on for four years without resolution.
Then, the Natural Resources Council of Maine, or NRCM, which was long opposed to the 2012 law and heavily involved in promoting more conservative mining laws, made a bold move. Nick Bennett, a staff scientist with the NRCM, recalled that in 2016, the NRCM took most of their wishlist for a mining law and put it down in writing into legislation. The impetus was partly to counter arguments from the DEP that statutes did not allow DEP to write more stringent regulations that some in the Legislature and advocacy groups like NRCM wanted, Bennett said.
"So we wrote a bill and the bill got legs," he said. It passed in June with an overwhelming majority that also required a vote to overcome a veto of the bill by Maine's more pro-mining governor, Paul LePage.
The 2017 bill was aimed at stymieing large-scale mining in Maine of the sort that a project like Bald Mountain would require. But the bill's authors and supporters agree it was also aimed at opening at least a narrow path for a possible mining industry in Maine.
House Representative Ralph Tucker, who was one of the driving forces of the new mining law, said the law balanced desires from three camps of people.
There were those who wanted to clean up the impasse created by having a 2012 mining law that had no regulations to back it, proponents of a law stringent enough to discourage mining altogether, and others who wanted to allow mining but with strict environmental protections and safeguards in place for the public in case of "mining disasters if the mining company goes belly up or is not available for the clean up," Tucker said.
The law, in how far it goes to constrain mining, sets precedent, Kuipers said. No other state in the U.S. is as restrictive. He noted that any underground deposit in Maine would have to support high-cost operations with dry-stack tailings, among other conditions, and comply with stringent water-related rules. To Kuipers, the law says to potential mine builders, "It's not no, but almost."
Explorers place their bets
At least a couple of Canadian exploration companies have taken note. Following approval of the mining law, Wolfden Resources Corp., with the financial backing of Altius Minerals Corp., struck a deal to buy the Pickett Mountain project for US$8.5 million. Pickett Mountain, discovered in 1979, yielded some high-grade intercepts but was never developed or, in recent decades, explored further. Past drill hits include some notable grades with as much as 8 meters grading 18.66% zinc, 10.27% lead, 1.63% copper and 6.72 ounces per tonne of silver, according to Wolfden.
Altius recognizes the permitting risk. Chad Wells, Altius' vice president of business development, said Wolfden "will effectively blaze the trail for mine permitting in Maine." In this, he acknowledged mining was a contentious issue in the state and moving a project forward through permitting could be "tough." Maine has been "anti-mining for a long time."
"Obviously we think there's some potential and opportunity" given Altius backed Wolfden with US$6 million for a 1.35% royalty over the property as well as investing in the stock, he said. Part of the attraction to Maine is being one of the first movers. Exploration of the deposit has been frozen for 40 years, Wells said, leaving lots of discovery potential to be tested. In that regard, any possible permitting is years off while Wolfden tries to extend the deposit and probes new targets.
Brent Cook, a veteran exploration investor with Exploration Insights, agreed that Maine has potential. S&P Global Market Intelligence asked Cook if the new mining laws would turn away investors like him who back early stage exploration companies. "I have no problems with looking for that sort of deposit [in Maine]," he told Market Intelligence in an email, referring to high-grade deposits that would be mined underground. "The area has been neglected for a long time."
At this point, Pickett Mountain does not appear to be a non-starter for the new mining law. "This deposit may be workable under Maine's existing regulatory structure," Mark Stebbins, the DEP's mining coordinator, said in an email regarding the project.
Still, NRCM's Bennett pointed out that Wolfden will have to contend with very high-quality water standards in the region, which is known for freshwater fishing that supports an important tourism industry. "And so if there is going to be a discharge — and there's no way as far as I know that you can have a mine that isn't going to have a discharge — they're going to have to meet very high water quality standards."
Bennett did not say the project was a no-go in the way that Bald Mountain proved to be for many in Maine. Wolfden management, which did not respond to multiple requests for comment, appear to understand what kind of mine will be possible in the state, according to Bennett, who attended recent public meetings the company held in Maine.
"I do agree with one of the things they said in the presentation, which is that our law does not — and it is designed explicitly not to — promote large-scale mines in low-quality ore," he said. "If you're going to do a mine in Maine, it should be small in footprint, low in risk and high in value."
