In a move that has sparked considerable debate, a $50 million grant awarded by Michigan to a Canadian firm for a copper mine project in the western Upper Peninsula is now the subject of a legal battle. The grant, approved in August, is intended to fund the construction of Copperwood Mine, but its proximity to Lake Superior and other sensitive areas has drawn significant criticism.
The Michigan Strategic Fund gave the green light to the grant after previous attempts by economic developers and lawmakers to secure taxpayer subsidies for the Copperwood Mine fell through. Proponents argue that the project will stimulate the local economy over its projected 11-year life span, while opponents raise environmental and oversight concerns.
The grassroots organization Protect the Porkies has taken legal action in Ingham County Circuit Court. They challenge the oversight of the funding, which originates from the Strategic Outreach and Attraction Reserve (SOAR) fund, a fund that has faced scrutiny due to its limited job creation and subsequent defunding by lawmakers.
Interestingly, the $50 million was initially allocated to an unnamed company in 2022. While other decisions involving the SOAR funds were expected to undergo public legislative scrutiny, state officials argue that this allocation was exempt due to prior appropriations.
Tom Grotewohl, executive director of Protect the Porkies, expressed concerns about the potential precedent set by this decision. “Regardless of how one feels about the proposed Copperwood Mine, all should acknowledge the (strategic fund board) has set an extraordinarily dangerous precedent for future handouts of public money to foreign companies beyond the purview of elected lawmakers,” he told Bridge Michigan.
Despite the controversy, the Michigan Economic Development Corp. (MEDC) has remained silent on the court filing, as per spokesperson Danielle Emerson. The Copperwood project, proposed by Highland Copper, estimates construction costs at $450 million and promises to employ 380 workers with an average salary of $80,000.
Earlier in 2024, the strategic fund board hesitated to approve the $50 million, questioning Highland Copper’s financial preparedness and external investment support. However, after confirming the state’s role as the initial investor, the board later approved the funds with certain conditions, bypassing a state Senate appropriations committee vote.
The grant includes $45 million allocated to Highland Copper for construction and site improvements, while $5 million is designated for the Gogebic County Road Commission to upgrade roads in Wakefield Township. The project has received endorsement from several UP lawmakers, with Marty Fittante of InvestUP calling it “the most important economic opportunity” for the region.
However, opposition remains strong, with environmental groups and tribes, who hold land rights around Copperwood, voicing their concerns. Anahkwet “Guy” Reiter of the Menominee Nation remarked, “Indigenous people have seen this pattern before: decisions about our lands and waters are made somewhere else, the economic benefits are promised to others, and our communities are expected to live with the consequences.”
Highland Copper CEO Barry O’Shea views the state grant as crucial for securing further financing, including a potential $250 million loan from the Export-Import Bank of the United States. “You truly can’t understate the importance of this to our company,” O’Shea said in a video aimed at investors. “It gives us incredible strength as we go into those next steps.”
The Attorney General’s office has been asked to review the funding, yet no further updates have been provided as of Tuesday.
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