Prospecting opportunity

As metals prices rebound, interest again builds in mining Maine's rich deposits

Workers operate a drill tilted at a 45-degree angle to cut across rock strata in the bed of Crawford Pond in Piscataquis County, Maine. (The BOSTON GLOBE/FILE 1960)

After decades of quiet, Maine's rocky landscape is once again being picked over by prospectors looking for a rich vein to mine.

Once a thriving producer of minerals, Maine has untouched deposits of copper, nickel, and zinc that could be profitably plumbed if commodity metals prices continue to rebound to the high levels they commanded as recently as a year ago.

Exploration companies are now eyeballing locations such as the Bald Mountain area in Aroostook County, where a massive copper-zinc sulfide deposit was first discovered in 1977. At an estimated 30 million tons, it may be the third-most-significant copper discovery in North America since the 1950s, according to a Maine Geological Survey report.

"What our people are seeing in the region's geology has us really excited," said Louis Hoël, president of Toronto's Golden Hope Mines Ltd., which has been investigating mineral options across the state.

That excitement has been tempered lately with a huge drop in metals prices worldwide as the global economic slowdown sharply reduces demand for the materials. Hoël acknowledged the price drops have affected his plans. But the prospects for a rebound in prices has been boosted with the promise by President- elect Obama to introduce an economic plan that would rely heavily on building projects. Indeed, prices have ticked back up a little in the recent days since Obama introduced his plans. Hoël said his company sees strong long-term demand for gold and a continued growth in demand for copper and other minerals.

"The Chinese economy is slowing, but they are building a huge middle class, and copper is very important to that, so we are expecting first stabilization of prices and then rising prices," Hoël said.

Indeed, the Maine State Geologist's office has logged more than a half-dozen exploration leases from mining and prospecting interests, including two for state lands. The state geologist, Robert E. Marvinney, said his office has also received a number of inquiries from land-management companies about requests to lease out their properties for mineral exploration. But since there is no requirement that leases of private land be reported to the state, he is not able to establish a complete picture of current activities.

"There has been an increase in exploration to both better evaluate known deposits and discover new ones," said Marvinney.

The leases for state lands are for exploration only so far, according to Marvinney, and cost the companies a nominal fee; Should Golden Hope or another company get to the point of mining minerals, the state would expect to receive substantial royalties from those sales.

Marvinney's office survey highlights Maine's rich geologic past, including ancient volcanoes, and mingled deposits of copper, zinc, and nickel and some precious metals.

One of the lessors of state land at Alder Pond, in west-central Maine, is Jean Claude Bonhomme, a veteran oil and gas industry executive based in Toronto. Bonhomme declined to name his client, which he said is in the midst of reorganization. Maine geological office research shows the site to have substantial deposits of copper and zinc. One of the keys to Bonhomme's development plans is the availability of ore-processing facilities just over the border in Canada.

"That will eliminate many of the environmental concerns about this kind of project in Maine while also making good use of an existing industrial facility," he said.

For John Breedlove, a geologist and Maine native who now works for Golden Hope Mines, the current prospecting climate is a welcome change. "I have worked all around the world and now, for once, I can finally work in my home state," he said. What's more, he said the overall regulatory climate is not that onerous. "The state permitting process requires some work but unless you are on the coast or near a lake it isn't really all that difficult to permit a mine," he said.

Of course, by comparison with other parts of North America, the mineral deposits in Maine are relatively small and less likely to be pursued by industry giants, said Murray Hitzman, a geology professor at the Colorado School of Mines, in Golden, Colo.

Still, "because of environmental concerns - the permitting challenges are similar everywhere - and due to the energy intensive nature of ore-processing, I believe smaller ore bodies that are of higher quality may be of more interest in the coming years," he said. Furthermore, the regional infrastructure - people, road and rail connections, and utilities - all make extraction in Maine easier than in more remote regions.

But mineral extraction in Maine requires negotiating political minefields. In 1992, a Canadian firm tried to move ahead with plans to actively mine in Warren, a town located just west of the picturesque coastal community of Rockland.

"All hell broke loose," recalled Warren Town Manager Grant Watmough. Initially the town declared a temporary moratorium on mining and then passed a series of carefully crafted ordinances that "allow for mining but impose so many special requirements that it cannot be done economically," he explained.

Indeed, even in places with a rich history of successful mining, there is unlikely to be much support for reviving that heritage.

Up the coast from Warren, the town of Blue Hill hosted mining operations that produced substantial quantities of copper ore into the late 1970s. "They ran a good, clean operation and it was the very best of times for native folks," said Duane B. Gray, a Blue Hill selectman. Since then, however, the demographics of Blue Hill have changed; the community is now best known for its art galleries and music festivals. As a consequence, Gray said he cannot imagine any scenario in which mining would resume.

The key, says Hoël, is "you have to make money and you have to respect the environment - that means getting everyone around the table and putting together a package where everyone gets high fives in the end."