Research Report: October 18, 2018
Noah Williams, Center for Research on the Wisconsin Economy
In December 2017, Governor Walker signed into law a measure ending the effective mining moratorium in Wisconsin. The new law could usher in a new era of mineral mining in Wisconsin, which has substantial deposits of iron, copper, zinc, gold, and silver. The goal of this project is to evaluate the economic impact of a representative new metallic mining operation in the state. In particular, we evaluate the potential economic impact if a new metallic mining operation were to be located in Oneida County. We consider the impact on the state and local economy of a representative mine in this area, which in turn would be indicative of similar operations in other parts of the state.
Based on a comparison of existing and planned metallic mines in neighboring states, we analyze the economic impact of a potential 350 employee metallic mine in Oneida County. We also evaluate the impact of the construction phase of the mine, which we assume lasts two years with a total capital expenditure of $250 million. Our results could also be scaled to evaluate the impact of different sized mining operations.
We find that Oneida County would see substantial gains in employment and incomes, two measures where it has lagged the state as a whole. We estimate that the 350 mining jobs would pay an average of $72,568, which is 85% higher than the average pay in Oneida County. Moreover the mine would have impacts statewide through its network of workers, suppliers, and customers, and through the increased economic activity generated. Accounting for all of these impacts, we estimate that the new mine would generate 700 total jobs, and lead to $44 million total additional labor income and roughly $243 million in output each year. The increased economic activity would also generate $6.8 million in state and local taxes per year.
In addition to the ongoing mining operations, the construction of the new mine would generate short term benefits. We estimate that a $250 million capital expenditure over a period of two years would lead to a total of 1274 jobs and over $200 million in output created each year.
Overall, the construction and operation of a new metallic mine would have significant impact on employment, incomes, and output in the county, region, and the state.