Analysis of proposed 20-year mineral leasing withdrawal in Superior National Forest

Abstract The Rainy River Watershed on the Superior National Forest is home to the Boundary Waters Canoe Area Wilderness (BWCAW). It also contains deposits of copper, nickel, and trace metals, and copper-nickel mining has been proposed adjacent to and upstream of the BWCAW. In 2017, the US Department of Agriculture proposed withdrawing land in the Rainy River Watershed within the Superior National Forest from mineral leasing, a position it reversed in 2018. These developments highlight the potential tradeoff between economic benefits from mining and concerns about its negative economic consequences for the local recreational and amenity-based economy. Previous studies of mining in the Superior National Forest focus on static effects on a single industry (e.g., mining) at some unspecified point over a medium-run horizon. We draw on these studies and the economics literature to provide a unified analysis of the effect of the proposed mining development on income and employment over time. Our results suggest that the proposed mining would lead to a boom-bust cycle that is typical of resource extraction economies, exacerbated by the likely negative effect on the recreation industry.