EMILY — On the surface, the city of Emily looks much like any number of small, rural communities surrounded by the lakes and forests of the Northwoods. It’s what’s locked deep below the earth that sets it apart — billions of pounds of manganese ore, believed to be the richest deposit of the mineral in North America.
The existence of the ore isn’t new information, with some of the first exploratory drilling occurring in the late 1940s and early 1950s. But a commercial mining operation has never materialized, despite multiple companies showing interest and exploring the property for its viability.
An accelerated push toward clean energy alternatives and a growing market for electric vehicles and other battery-powered technologies is reigniting interest in the site’s potential, however. Manganese is one of the metals used in battery production, combined with nickel and cobalt to increase energy storage capacity.
While the element is one of the most plentiful on the planet, a small sliver appears to be pure enough for battery use. And signs so far point to Emily’s deposit as containing that high-quality ore, according to the mining officials who just completed exploratory drilling.
“Geologic success on the drilling was good,” said Rick Sandri, CEO of North Star Manganese. “We’ve hit what we were looking for in 29 out of 29 holes.”
The company is seeking mineral rights leases on several state-owned properties surrounding those it has already explored from the Minnesota Department of Natural Resources. It’s the only pending request before the state agency, which notes it is reviewing public input collected in October 2021 ahead of a likely meeting this fall of the state’s Executive Council. The council is tasked with ultimate approval of such leasing agreements.
Battery of questions
Sandri was one of five people taking part in a panel discussion Tuesday, Aug. 15, which capped an open house centered on the manganese deposit at Emily City Hall. More than 100 people filled the gymnasium for the discussion, which lasted two-and-a-half hours and featured a slew of tough questions for those on stage.
Whether the potential mine would have negative consequences for the environment and those who call Emily home dominated the night, with inquiries about the nature of complex financial arrangements, mining expertise and transparency rounding out the public comments.
Midway through the Q-and-A, Emily resident Rob Trenn voiced concerns of some in the room most simply.
“I understand this is all about money, and that’s fine,” Trenn said. “But what are you going to bring to Emily, I mean, other than finances? What benefits are you going to bring to Emily? And my second question is, when something goes wrong, what are your cleanup plans? What’s going to happen to us?
“We live on the lake. We drink the water. What’s gonna happen to us? Are you guys going to tuck your tail and run?”
The response from Sandri reflected what those pursuing the project sought to emphasize. It’s an exploration project only, he said, not a mine — and there’s many more steps, reviews and research along the way to a commercial mining operation.
“I’ve been in the industry 49 years. That’s not a mine up there. It’s a few exploration holes. That’s all we’ve done to date,” Sandri said. “Now, if we got further, we would have a responsibility. And continuing? Absolutely.
“Anybody who decides to take on a project at this time has to have a responsibility during the time they’re operating and after the time they’re operating through the reclamation period. That’s both required by law, and it’s morally correct. But we’re not there yet.”
Char Kinzer, public relations manager for electrical cooperative Crow Wing Power, said the direction of current and future energy policy means pursuit of manganese and other minerals used in battery production will intensify.
Through a wholly owned subsidiary Cooperative Mineral Resources, Crow Wing Power purchased some of the property containing the ore in 2008 with the intention of finding partners to develop its mining prospects. If it moves forward, it would be the only such operation on the continent in a marketplace where most of the mining is happening in Africa and processing in China.
“It’s an investment in the future and we’re hoping that it will do really wonderful things, because we’re in the electrification business, and storage batteries are going to be totally necessary for all the renewable energy that we need to move in the future,” Kinzer said.
“ … The rich manganese is changing the world in lithium-ion batteries, and so it will prove its value. If we don’t do it, somebody else will hopefully be able to do this right. And if not, we’ll just keep importing manganese from China.”
It wasn't only locals who raised questions Tuesday. The project caught the attention of former Gov. Arne Carlson, who’s been forthright in his opposition to the proposed PolyMet mine in Hoyt Lakes. Carlson penned an open letter to Emily residents discussed during the open house, warning of potential efforts to “hide the risk of illegal water pollution from the public eye.”
The former Republican governor, who now considers himself an independent, pointed to a recent Minnesota Supreme Court ruling accusing the Minnesota Pollution Control Agency of concealing U.S. Environmental Protection Agency warnings when it came to the Polymet project.
“Here, in Minnesota, our most basic need for survival, healthy drinking water, is under attack from foreign mining conglomerates with shabby records,” Carlson wrote, calling for a moratorium on all mining permits in the state until a series of reforms are in place.
Something in the water
Joining Sandri and Kinzer on stage were Gary Lewis, CEO of Electric Metals, the parent company of North Star Manganese; Steve Carlton of the Carlton Group, which retains royalty rights to a future mine after his family sold property to Crow Wing Power’s subsidiary; and Dan Brennan of Emily Mining Information Group, a citizen organization researching various aspects of the proposed project.
"What’s gonna happen to us? Are you guys going to tuck your tail and run?”Rob Trenn, Emily resident
First to approach the microphone was Sue Airhart, who lives one-quarter mile from the exploration zone. Airhart displayed to the crowd a mason jar filled with her well water, which she said is nearly unusable since activity ramped up again.
“Now we have this dirty, filthy water in our system, and it only started when they started drilling over across the street,” Airhart said, her voice filling with emotion as she spoke. “ … I am so against this, because of our aquifer. It’s just going to ruin everything, and it’s black, and it’s ugly, and it’s just terrible. And there have been times when I haven’t been able to wash my clothes in it.”
Impacts on lakes and drinking water sources were top of mind for a number of those in attendance. While manganese is an essential trace element and occurs naturally in water and the human body, in excess, it’s a neurotoxin, Brennan explained in his introduction.
According to the Minnesota Department of Health, people who drink water containing high levels of manganese may experience problems with memory, attention and motor skills. Babies are at greatest risk of impacts, with the potential for learning and behavior problems. The health department notes drinking water is considered safe when tests show manganese remains below 100 micrograms per liter for infants or 300 micrograms per liter for older children and adults.
A 2012 initial assessment of manganese in the state’s drinking water showed results across Crow Wing County — not only in the Emily area — revealed concentrations higher than 300 micrograms. This was true throughout the state, with several samples gathered across southwestern Minnesota showing even higher concentrations, often exceeding 1,000 micrograms per liter.
Kinzer pointed to this data, noting the presence of iron and manganese in water near Emily is well known and preexists any mining activity. She said Crow Wing Power tested about 600 wells in the areas surrounding the site in 2010, before a previous attempt at exploration drilling that ultimately failed because of the technique and equipment used. The company tested after the exploration efforts as well, she said, and results were shared with residents.
While a list of individual results was available at the open house, residents repeatedly asked for more specific details as well as what the data showed as a whole. In a follow-up with Kinzer, KAXE asked for a summary of the result averages before and after drilling. Friday, Kinzer noted Barr Engineering, which conducted the tests on behalf of the coop, is in the midst of reviewing the data.
Based on the company’s previous documentation, however, average manganese levels both inside and outside a 1-mile radius fell below levels considered unhealthy for older children and adults.
Kinzer said wells outside the radius averaged 175 micrograms per liter, while those inside the radius showed 239 micrograms per liter. Both exceed the threshold of what’s considered safe for infants.
“The fact that some people feel their water has changed significantly over the past 12 years since we did our sampling is an issue that should be looked at,” Kinzer wrote in an email. “It’s my hope that the City council and perhaps the Minnesota Department of Health and Natural Resources take a good hard look at the well water situation in the area.”
At Tuesday’s meeting, Sandri said he didn’t believe exploratory drilling had any impact on well water.
“Right now, we’ve had no mistakes, nothing went wrong,” Sandri said, as members of the audience interjected with responses.
“Hold on a second,” he continued. “We did drilling exploration and we drilled 29 holes, filled the holes with cement. There’s no water used in the system, except in the drilling muds. We weren’t putting water down. We weren’t taking water out. We’re going into the hard rock.
“People who have questions about water and water sources, first off, should be talking to the Department of Health. That is a Department of Health question. I think your question is valid, ma’am (Airhart). I think absolutely that needs to be fixed somehow. … I don’t think that we did it, because we’re plugging the holes with cement literally right after we do so.”
Sandri said this is the standard approach approved by the state and significantly more water wells were drilled in the area during the same time period than exploratory drilling.
“People who have questions about water and water sources, first off, should be talking to the Department of Health. That is a Department of Health question."Rick Sandri, CEO of North Star Manganese
“If we were injecting stuff in there, or if we were letting them (be) open for years at a time, that might be a different kind of question, and valid,” Sandri said. “But that’s not what we did.”
“You should be a politician,” someone called out from the crowd.
“I’m not, and I don’t ever want to be,” Sandri replied. “But what we did was we took samples. That’s all we did, is take samples. But those of you who have water wells, you’re actually drilling and leaving a cavity open.”
What about the money?
Whether Electric Metals and its local operation North Star Manganese were in a financial position to pursue a mine rose to the surface again and again Tuesday.
Questions surrounding the company’s cash flow and long-term intentions — and whether a larger, multinational mining firm may swoop in to acquire the junior company — lingered alongside a continued focus on Crow Wing Power’s past decisions regarding royalties and the use of its funds on a speculative project.
The Brainerd Dispatch in 2019 covered the matter in several stories, including an explosive annual meeting at which a majority of present members advised the coop to remove CEO Bruce Kraemer over the issues. Kraemer remains at the helm today.
In December 2022, the Minnesota Attorney General’s Office sent an inquiry to the coop seeking detailed information about financial arrangements and nondisclosure agreements involving company executives, in response to ongoing concerns raised by the Crow Wing Power Accountability Group. Kinzer said the company complied with the requests and has heard nothing since.
The Star Tribune reported in an April story that hundreds of millions of dollars would be required to get a commercial mining operation off the ground, and it isn’t unusual for smaller companies to partner with deeper pockets.
Lewis, CEO of Electric Metals, said financial risk is the nature of the mineral exploration business.
“We’re fully funded to do everything we need to do until the middle of next year,” Lewis said. “So to be quite frank, our balance sheet — and I don’t want to get technical about it — it’s not gonna look good for years. But that’s just the nature of what we do. We take risks to invest in projects.”
Kinzer said Crow Wing Power’s pursuit of the property 15 years earlier related to its desire to keep things local, noting taxes imposed by the state on mining companies could have significantly positive effects on area school districts and local governments. Asked if other member-owned electrical cooperatives have pursued projects like this, Kinzer said she does see other “aggressive coops” branching off into electricity-related directions, like solar power or battery testing.
“In many ways, this project is akin to our mainstay, which is providing electricity — reliable electricity, at the lowest available rate. That’s our main goal,” Kinzer said during a follow-up phone interview. “If we can enhance our business by embracing the new wave of beneficial electrification … that just puts us at the top of doing good things for the community.”
Kinzer said they entered an agreement with North Star Manganese because the company believes it shares similar values. This was after courting by other mining companies in the past, including a Chinese firm that intended to buy the property before Crow Wing Power did. But she confirmed nothing in the agreement prevents acquisition by a larger mining company at some point in the future.
“I don’t know what might happen in the future, if they were to turn it over to a different company,” Kinzer said. “I would hope that their values would remain the same.”
