Townships move forward with revitalization plan
April 3, 2016
By LISA BOWERS - Journal Ishpeming Bureau , Mining Journal
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REPUBLIC - An attempt to revitalize the west end of Marquette County is chugging forward.
A joint meeting of the Humboldt and Republic Township boards will be held at the Republic Town Hall at 6:30 p.m. April 14 to continue finalizing an interlocal rail agreement between the townships, County Commissioner Joe Derocha said.
He said the two townships hope to receive state funding to reactivate an approximately 9-mile stretch of LS&I rail bed between the townships to transport millions of tons of tailings from the south side of the Old Republic Mine, currently owned by Republic Mountain Lake, LLC, to be delivered to a processing or pelletizing mill.
"The tailings are ready to be pelletized," Derocha said. "It is just a matter of collecting them and shipping them out."
Republic Township Supervisor Gary Johnson said the tailings on the south side of the mine are not the only product that could be shipped out.
"The magnetite ore, which is on the north side of the mine, is also being looked at for crushing and shipping to a processor. All of this depends on the rail line, and the price of ore," Johnson said in an email.
Derocha also acknowledged that the price of ore will have an impact on when the $350 million dollar development will start to pay off.
"Currently the price of minerals are at historic low levels, development could be years out at this point," Derocha said.
Hoping to fill the gap
Derocha said the rail agreement would give the two communities a revenue stream because they would own the rail bed, helping to fill the gap that depleted revenue sharing from the state has caused.
"Aside from the economic development to the community and the creation of jobs, we live in an environment where big business and government, especially state government, has been taking tax revenue from communities and not giving it back," Derocha said.
Derocha said the rail corridor would be necessary to access the ore and transport it out for processing.
"Because the townships own the rail corridor, they can charge so much per ton demurrage to transport it out to be processed," Derocha said. "This is a clever way to gain revenue for our local communities."
Reaching an agreement
Derocha said the townships have solidified about 95 percent of an interlocal rail agreement that gives Humboldt Township 75 percent share of the rail bed and Republic Township 25 percent share.
This month's meeting should allow the townships to work out the details of how the rail bed will be purchased and the process of requesting the rail line be put back.
"The appraisal is already done and townships would be purchasing the corridor," Derocha said. "The DNR has the Land Transaction Application."
Derocha said the interlocal rail agreement needs to be modified to be acceptable to both townships.
"About 95 percent of the agreement is solidified," Derocha said.
One of the items of contention in the document, according to Derocha, calls for local employment and prevailing wage in the construction of the rail bed.
A suggested edit to the rail agreement, according to the minutes of a joint meeting between the townships in December, states: "Whereas, it is the desire of the HT and RT boards that prevailing wage, as provided by state and federal standards, be paid to mechanics and laborers working on major construction contract for HT and RT. Whereas any contract as to which the cost over a contract for construction exceeds $50,000 is deemed a major construction contract. Every contract in excess of $50,000 wil be a minimum of 50 percent local Marquette County resident employment hire."
Iron Ore Heritage Trail impact
Derocha said he believes the rail corridor can be reinstated, despite the fact that a portion of the rail bed is on the Iron Ore Heritage Trail.
He points to the 1.9-mile railroad spur north of U.S. 41 completed in 2014 for the Lundin Mining Co. to ship nickel and copper concentrate to its processing facility in Canada.
According the Detroit Free Press, the spur in Humboldt Township was the first rail bank reactivation in the state and one of only a handful across the country.
In the case of that rail bed being reactivated, the affected section of the Iron Ore Heritage trail was relocated at the mining company's expense.
Administrator Carol Fulsher said she was aware of plans to reinstate the rail bed, and that it would affect all 9 miles of trail in that area.
"We knew it was a possibility. At the appropriate time we will work with them to find a new route, and sometimes there is rail with trail, so there are options for us," Fulsher said.
Fulsher said the land on the affected section of trail is currently state owned, and the Iron Ore Heritage Recreation Authority acts as the local manager.
Fulsher said while some may see this as a setback for IOHRA, she is confident that the situation will be settled for all involved.
"The state recognizes the importance of trails in this area, and I am sure they will take care of us," Fulsher said.
Derocha said he expects the process of reactivating the rail bed to keep moving forward.
"I would say that the rail corridor would be purchased, I am anticipating in the next six months, and the real estate and the federal side will be complete," Derocha said. "This will breathe new life into Republic Township. As a county commissioner representing this area, I would like to see that."
Lisa Bowers can be reached at 906-486-4401. Her email address is lbowers@miningjournal.net.
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