EAGLE ROCK, Michigan: Standing on the marshy ground at Eagle Rock in the remote woods of Michigan's Upper Peninsula, it's hard to imagine that beneath one's feet is a lump of nickel worth billions of dollars.

"This is where the money is," said Chauncey Moran, vice chairman of the Yellow Dog Watershed Preserve conservation group, whose mission is to protect the Yellow Dog River and surrounding watersheds.

Cold water comes almost to the knees of the waterproof boots covering Moran's legs. He looks down into the thick marsh grass and water at his feet. "I bet you've never stood over $8 billion worth of nickel before," he said, his white-bearded face breaking into a grin.

This isolated spot is at the heart of a battle over plans by Kennecott Eagle Minerals Company, a US unit of Anglo-Australian mining giant Rio Tinto, to mine that nickel ore. Rio Tinto is the world's No 3 mining company.

Opponents argue that the project would violate an area that is considered sacred by a local American Indian tribe and could send chemical pollution into Lake Superior, one of the Great Lakes that straddle the US-Canadian border.

The company defends its plans, which it says call for $350 million in spending and will create more than 200 jobs.

Jon Cherry, who heads the project for Kennecott, said the value of the nickel fluctuates with the market but is "in the billions", adding that the mineral deposit here is "close to if not the highest concentration of nickel in the world".

Nickel is a metal used in a variety of industrial and consumer products such as stainless steel and other corrosion-resistant alloys, rechargeable batteries, magnets, and coins.

Kennecott is waiting for final approval from the state, pending a Michigan Department of Environmental Quality review of the claim by local Chippewa Indians that the project would harm the Eagle Rock spiritual site.

'Good corporate citizens'

Pollution-related objections raised about the project have been rejected by the state. Conservationists argue the mine project could pollute water that feeds Lake Superior. The Great Lakes account for 22 percent of the world's fresh water.

Kennecott says its plans exceed Michigan's environmental standards and have the backing of community leaders and many local people because they would bring jobs.

"Mining is part of our heritage up here," added Steve Powers, the top official in Marquette County.

"We only invite good corporate citizens here," said Amy Clickner, head of the Lake Superior Community Partnership, a public-private initiative in Marquette County that seeks to attract businesses to the area. "Kennecott has more than met Michigan's environmental requirements."

Opponents argue the mining company's plans are deficient.

"I'm not anti-mining or a tree hugger, but I'm against this project," said Jack Parker, a mining engineer whose experience in mines goes back to 1946. "Kennecott has fudged the numbers, and what they're proposing is unsound."

"This is liquid gold," said Marcy Cella, who lives near the proposed mining site and is concerned about possible water pollution, as she put a glass of water on her kitchen table. "And we need to protect it."

Environmental groups are worried because Kennecott and other mining companies are trawling the mineral-rich Upper Peninsula for fresh prospects. High local unemployment amid the US recession, which began in December 2007, may lead to unwise decisions, they say.

Potential collapse

"This is truly a test case for us," said Michelle Halley, an attorney for the National Wildlife Federation conservation group. "If this mining project goes through, then there is no doubt it will be followed by a rash of other permits."

For Kennecott, Eagle Rock has two attractions: the superb nickel ore quality and the fact that the United States is politically stable, making it a safe investment.

He said the company erred on the side of caution when it came to its mine design, so operations will be safe and clean. The water filtering system it proposes, he said, would produce water cleaner than current local drinking water.

Critics said Kennecott has not done its homework.

The crux of their argument is about a potential collapse of the "crown pillar," or the rock support the company would leave between the underground mine and the marshland above.

"We believe our design is both safe and stable," Cherry said, saying the rock will be thick and strong enough.

But environmentalists said that since the nickel ore is sulfur-bearing with the presence of mercury, a mine collapse would cause serious water pollution. Under certain conditions water, sulfur and air can combine to form sulfuric acid.

But Cherry insisted the company will get this project right and is looking at other possible sites across the Upper Peninsula. Test drilling will begin at up to 10 to 14 sites in 2010, Cherry said.

"If we mess this project up, there's no way we'll be allowed to do others up here," he added.

Reuters

(China Daily 11/30/2009 page11)