Substantial Tax and Royalty Revenues

Taxes and royalties paid by Franconia Minerals will add hundreds of millions of dollars to local, state and federal revenues over the life of the Birch Lake Project.  A large part of these monies will directly benefit schools, roads, and economic development activities on the Iron Range and across Minnesota.

Ad Valorem Tax taxes on real property improvements (i.e. buildings) will go to host communities and their counties. 

The State Occupation Tax, paid by mining companies in lieu of corporate income tax, but based on net income, will go to the state’s general fund. 

The Net Proceeds Tax, in lieu of ad valorem taxes on reserves in the ground and also based on net income, will primarily benefit the northeast Minnesota area. It will be principally payable to counties, municipalities and school systems and to the Iron Range Resources Agency and its funds, for further economic development.

In addition to the taxes, Franconia will pay various royalties based the Birch Lake site’s location on private and state land and Maturi’s location on federal land.  These royalties are based on adjusted gross income of the mines and therefore reflect metals prices.  Most of the Birch Lake mine site royalties will be payable to the state and the benefit the State School Trust Fund and the Maturi royalties will be paid to the federal government for redistribution to local communities, Lake County and the Superior Forest for improvements.