Investors in Adirondack rail line are willing to bet big
By Tim Rowland
The winning bidder of a 30-mile rail spur through the wilderness plans to spend $19 million on a multi-pronged venture to harvest minerals from old mine tailing piles, enhance tourism and recreation and rebuild freight and passenger service essentially from scratch.
Carol McLean-Wright and her husband John Wright, as Doc N Dutchess Rails LLC, purchased the Saratoga and North Creek Railway at a bankruptcy auction this month for $3.33 million. But the Wrights’ plans go beyond purchase of the railroad, whose chief assets are the tracks and an easement that’s good for another 40 years.
“We’re going to be developing jobs, economic activity and tourism appeal,” McLean-Wright said.
First steps
The first machinations of that project began this week, said bankruptcy court trustee William Brandt Jr., who is submitting the Plan Administrator’s Report of Auction for Court Approval. It must also be reviewed by the federal Surface Transportation Board, with a tentative closing date of May 6.
Then the real work will begin. In size, scope and degree of difficulty, the plans in some ways call to mind those of the 18th century industrialists who found iron ore on virtually the same grounds and plotted developments along the headwaters of the Hudson River, where Teddy Roosevelt was staying in 1901 when he learned President William McKinley had been shot.
The wilderness eventually won out, and critics believe it will do so again. Other procedural, financial and structural hurdles remain for plans involving an industry that some conservationists believe has no place in the Adirondack Park.
McLean-Wright said she is aware of the challenges and the skeptics, and in response likes to quote Roosevelt himself, who said glory goes to the one who “knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly.”
McLean-Wright said her role will be to find investors, while the industrial side will be handled by a team of experts in their respective fields. Her husband, who she said is a virologist and former arms inspector in Iraq, will lend a scientific and educational perspective to the project, emphasizing the area’s geology and taking advantage of dark skies for astronomy tourism.
The other bidders
The Wrights’ bid for SNCR beat out West Coast scenic rail and freight hauler Sierra Railroad, and Revolution Rail, a rail-biking company that operates several hubs, including one on the southern end of the line in North Creek.
Sierra, the only traditional railroad to bid, objected to the proceedings on the grounds that the other two participants were not legitimate railroads. David Rohal, vice president of corporate projects for Sierra, said “it didn’t seem right” that entities with no rolling stock and no experience running railroads should be contenders. Sierra, which had wanted to run freight and tourist trains, along with a rail-biking operation, does not plan on further contesting the results, Rohal said.
Prior to the auction, a federal bankruptcy court had ruled that only companies intending to maintain the railroad would be permitted to bid. That knocked out another potential buyer, the Open Space Institute, which was interested in purchasing the line for a rail trail, a pursuit that had the backing of the state Department of Environmental Conservation.
Use of the rails south of North Creek will also have to be negotiated with owners of two other 30-mile sections of track to the south owned by Warren County and the Town of Corinth. The Wrights had business dealings in Warren County, reviving a bankrupt dude ranch in 2016. McLean-Wright said they exited the business in 2019 due to a health issue.
Warren County Director of Public Affairs Don Lehman said that the county had no comment on the sale, but that any resumption of rail service on the line would have to be negotiated. The county has been maintaining the tracks, and they are in good shape, he said.
The Wrights’ ambitions for the line center on restoring the railroad between Tahawus and North Creek. It has operated in fits and starts since the last load of titanium oxide was shipped from the National Lead Company’s mine in 1989.
From there, the Wrights hope to buy the mine itself, restore its historic name of Tahawus, and begin sifting through millions of tons of tailings to recover ilmenite, cobalt oxide and a dozen other minerals that have applications in everything from pigments to advanced electronics. The rail, which will keep the Saratoga & North Creek Railway nameplate according to the Wrights, would be available to other industries in the corridor, most notably Barton International, which mines garnet for use in industrial abrasives.
Sierra’s Rohal said that although be believed the railroad sold for more than it was worth, it represents “a good business opportunity,” particularly as new federal infrastructure money starts to flow, creating demand for road building materials.
All bidders were financially vetted, said Brandt, the bankruptcy court trustee, “and frankly, the Doc N Duchess entity was the most well-heeled of all three, meaning there are no concerns about closing.”
The Wrights said they also plan to work with Revolution Rail, which would like to continue its North Creek operations and open a new rail biking enterprise in Newcomb. And they say the track could be used for other recreational pursuits. Hikers, for example, might one day be able to hitch a ride to whistle stops along the line, where they could disembark, camp for a few nights and then catch a ride south, said Jeff Hagan, the new president of SNCR.
Rob Harte, whose Revolution Rail was the third bidder, said he and the Wrights have conversed, and he’s optimistic his company can maintain its operations in North Creek and expand into Tahawus. “There’s a lot of potential and a lot of excitement,” he said. “We’re excited to explore Newcomb — we feel like that’s an area that’s really going to pop.”
Bringing back industry?
Plenty of others believe in Newcomb’s ascension as well, although there are contrasting views on how it should happen. The state, some conservation groups and many in the hiking/biking community had hoped the 80-year-old line, built by the government in the heat of World War II, would fade peacefully back into the forest as a low-impact rail trail.
The Department of Environmental Conservation, in a matter that is still pending, has asked the federal Surface Transportation board to abandon the line with the long-term goal of ripping up the rails. But now that Doc N Dutchess has announced its intentions, the federal government is unlikely to agree to abandonment, said Newcomb Supervisor Robin DeLoria, a supporter of the Wrights’ endeavor.
But the state will still potentially have a say in the final outcome. The Tahawus mine is owned by Mitchell Stone Products, and the DEC would have to approve any transfer of its permits should it be sold.
Mitchell Stone Products, the DEC said, can only mine stockpiles from the previous mining operation. “Any additional operations would require DEC review and authorization,” a DEC spokesman said. “ Any change in ownership would require transfer of the permit.”
Mitchell currently trucks aggregates for roadbeds and other construction projects, a business Doc N Duchess plans to continue — although with more efficient freight cars that are easier on the environment and not a detriment to North Country roads, Hagan said.
Bob Kline, interim president of mining operations for the Wrights, said there will be no new digging or industrial or chemical separating processes at the site. Millions of tons of old mining waste, over the course of about two decades, would be shipped to covered yards off-site for mineral extraction.
Today, Kline said, newly relevant nanomaterials in the mining wastes have markets in advanced electronics. “We’ve found uses for some of the stuff we thought of as trash,” he said, adding that today’s technology has improved the extraction of useful minerals.
Kline said national security and domestic supplies of metals is also a driving force behind the project. The two top suppliers of titanium are China and Russia, with Ukraine coming in at No. 5. Similarly, China has a corner on the market of rare earth elements, small but essential ingredients of many modern technologies — lasers, night-vision goggles, batteries, smart phones, to name a few.
“China and Russia are not the sort of suppliers that we want to rely on,” Kline said. The federal government agrees. The 2021 National Defense Authorization Act instructs the Pentagon’s suppliers to wean themselves of critical elements produced in China, which has 80% of the world’s refining capacity.
Still, from a policy and economics standpoint, it’s a difficult environment for minerals, said Ian Lange, an associate professor of mineral and energy economics at the Colorado School of Mines. “The U.S. doesn’t do mining very well,” he said.
What rare-earth elements are mined domestically, for now, have to be shipped to China for refinement, and more common ores, like titanium, are subject to Chinese market manipulation. When a titanium consumer begins to talk with a new supplier, the Chinese suppliers typically cut their prices to retain the business, Lange said.
Kline said Doc N Duchess have a cost advantage though, because material does not have to be dug from the ground at considerable expense. And rather than opening or expanding a new pit, removing material will “clean up” the site, he said.
Rails and recreation
Hagen said he’s acutely aware that industries and the park’s regulators sometimes have strained relations, such as when the Iowa Pacific Railroad mothballed more than two dozen tanker cars on a wilderness siding in 2018.
Conservationists and rail advocates alike today recognize this as a blunder that fueled interest in converting the line into a recreational trail, and hardened opinion against the railroad. Iowa Pacific’s legacy was “bad debt and bad publicity, and we want to make sure that does not happen again,” Hagan said. “It is very irresponsible to put junk in these beautiful mountains.”
Not all hiking and conservation groups are convinced. “Our thoughts are firstly that it represents an economic development strategy that looks longingly backwards at an industrial and rail line era that has long since passed away,” said Peter Bauer, director of Protect the Adirondacks.. “Secondly, the future is a recreation trail. This effort will delay the inevitable by a decade.” The success of the Lake Placid to Tupper Lake trail “will leave many in Warren County drooling for the same,” he said.
Hagan pledged there will be no more wholesale railcar storage on the line, and estimated that about 10 to 20 freight cars a week would roll down the tracks, leaving ample opportunities for recreation. The concern with mixing freight and recreation is liability, Hagan said, but he believes both can co-exist safely.
The company is in the process of buying the locomotives and passenger cars it will need to begin operations. Hagan said the track will take some work and money to get back into shape, but that it was built to wartime standards and is in remarkably good shape.
Doc N Duchess president Michael Rogers said he hopes environmental groups will give the company a chance. “I don’t consider their concerns insignificant or inappropriate,” he said. “I’d like to find a way we can co-exist and make things better.”
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So far, I am liking what I am hearing about the plans for the mine – at least short-term. I would certainly like to see the tailings gone or used as fill, and it seems there is no immediate plan to actively dig for more material.
I am more concerned about long-term plans – for instance when the tailings are gone. Go back to digging? Close the mine? Remediation of the area? I would think DEC would be interested in the long-term plan as well – especially before transferring permits and such.
From what i understand from the article, the permits do not allow new mining. The owners would need mining permits that would need to be approved by the DEC, which would require a detailed plan including environmental safeguards.
( the DEC said, can only mine stockpiles from the previous mining operation. “Any additional operations would require DEC review and authorization,” )
It is unlikely they would get approval, unless something changes drastically in the need for the minerals on the property, as it did in WWII.
I dig the idea of lots of digging. Super Great News for industry and The North Country Economy. Aerospace Electronics High Tech let the advanced Sciences off the chain …. Great Super Excellent News.
Swamp Fox
Sadly, I expect Bauer & Co, the APA, and the DEC to torpedo this venture at every turn. I sure would like to be wrong.
They didn’t gamble on the purchase,
the deal was made to buy the mine BEFORE the rail line was purchased.
No business person takes a $3.33 million dollar risk.
Perhaps,
It seems to me the entire venture is a gamble, if it was a sure thing, the current mine owner could have brought in investors and done it themselves.
In the 1990s they tried to sell the whole 11,200 acres to the State but in the end in 2003 they kept the 1200 acres on which they could not get a certificate showing that they were free of environmental liability (and therefore the State could not buy it) and OSI bought 10,000 acres, selling 7,000 to the State in 2007 and selling the southerly 3,000 acres for private forestry. That 3,000 acres has an easement on it that would allow someone to mine the Cheney Pond deposit. The rail line also has a 100 year lease that began in 1962. Drill baby drill, dig baby dig.
One can only wonder when the NYS taxpayer will be on the hook for this venture.
I hope it turns out less than the Bill’s stadium hook.
CP killed the previous attempt by limiting the number of access to their line at Saratoga Springs.
These people are scammers, did anyone look into their past before giving them money for this? They destroyed 1000 Acres ranch and investors threw them out. Don’t believe anything they say.
Where is it said that somebody “gave” these folks money ? Perhaps they have their own money. People are entitled to spend their own money as they please.
Did you make this up or did you hear it from a friend who heard it from a friend who heard it from a friend?
The new owners are not doing any better and the same hard times happened at Pine Ridge Dude Ranch in Kerhonkson, NY Catskills. Perhaps they are scammers too?
sounds like another “rich get richer and enviromental disaster left to tax payers to clean up”. sounds like a lot of back room deals were made before purchase, payoffs and kick-backs deals done.
Newcomb should be saying “NO!”, APA should be saying no to mine run off into Boreus and hudson river waters. The mine should never be reopened, no blasting, no heavy machines, no toxic runoff or poison pits! Reseach mining pollution and it screams no
Where is it said that there will be new mining at Tahawus ? From everything I read the plan is to move out the tailings that have been sitting there for 80 years.
And where is it said that the mining operations, past or present, have polluted the Upper Hudson River ? I lived in Minerva for many years, have hiked, backpacked, canoed, kayaked in the areas around the mine. I never noticed polluted water. Fear, doom and gloom, how about some JOBS and not ripping out another rail road. Bauer and Company, this publication, Dick Beamish et al are so anti rail, ENOUGH. You got your Tupper ~ Placid Rail trail. Let these folks give it a go.
Scott,
Why would anyone pay 3 million dollars to remove the tailings from a long unused mine ? Of course the mine is a source of future profits but it will not create jobs on the scale needed here. A few heavy equipment operators, a small number of train crews – sort of like how lumber is harvested now and trucked away on huge trucks. No more merry bands of lumberman, dancing on logs rolling down the river. I don’t know if we need any more rail trails as the first segment from Tupper to Placid isn’t quite complete yet or more access into the wilderness but I do know we have to get better broadband and cell phone coverage in the Adirondacks. And improve our existing public school systems and increase the number of licensed child care providers. This will create job opportunities and attract new residents to the area.And the new monies requested by Gov.Hochul for SUNY will improve our local public colleges after years of being starved by the former Governor. This is the positive route forward and not some private enterprise chimera with dubious antecedents and a confrontational future.
They must know something you don’t know.
do you honestly think it will only be tailings? that it will not evolve to be more mining. Also did you see when the mines were running in the 40’s through 60’s at full tilt? my grandparents worked and lived in Tahawus they saw the filthy water running out of the mines down stream and i grew up hearing about the heavy rains washing mine waste and for weeks the streams would be lined with dead fish.How grandpa would be so upset to loose his trout fishing. Look up history of mining and long term pollution. then use an educated opinion!
Secondly these people from Colorado are not looking here for anything but profit, they are not being enviromentalists or outdoors people. Greed pure and simple, reopening mines will create maybe 20 jobs for a decade or two, then they close mine, stop paying taxes and the massive toxic clean up gets left to tax payers yet again as repeated through out history. Let them build but have to put aside a well funded account for only cleaning up the mess and see how fast they run away!
U.S. Department of Defense (DoD) Industrial Base Analysis and Sustainment Program to support the construction of a commercial scale processing facility for heavy rare earth elements.
HREEs have higher atomic weights and are generally less abundant than light rare earth elements (LREEs). They are essential inputs to many critical defense and commercial technologies, particularly permanent magnets instrumental to the performance of electric vehicles, wind turbines, drones, and missile systems.
The ability to process HREEs alongside LREEs will enable companies to extract and refine all rare earths required to manufacture high-performance permanent magnets. It will also enable the company to recycle all recoverable rare earths from end-of-life magnets and magnet production scrap, increasing the resiliency and environmental sustainability of the domestic supply base.
“The U.S. needs to continue to push the scientific envelope to develop secure, reliable, and affordable domestic source critical minerals used in defense and commercial manufacturing in order to reduce its dependence on foreign sources in a time of global economic competition,” said Deborah Rosenblum who is performing the duties of Assistant Secretary of Defense for Industrial Base Policy.
To meet growing magnetics demand and promote supply chain resiliency.
Tahawus will have a closed loop, zero-discharge rare earth production facility with a dry tailings process that recycles more than one billion liters of water per year.
Molly you sound like a paid rep for the new owners rather than a simple commenter. To be that high a level of clean would require a very, very massive outlay of infrastructure and that kind of invest ment of close to 50 to 100 million dollar.Then milions per year to maintain those safe guards. will the Re-processesing of the tailings for a second time, really recover the initial investments? and there will be issues of seepage into the ground water, containment pools that can over flow, levee filure. and surely owner desire to further dig,and dig some more for profits. There are much better places to mine than the very Heart of a nature preserve a “forever wild”. it took decades for the boreas river to recover from the 40’s,50’s and 60’s mine wastes. The boreus river slowly rebounded and become a clear river with fish, then acid rain wiped the Boreas river dead again in the 80’s and part of the 90’s. The boreas is finally seeing fish some and still no crayfish, now to poison it yet again???
Just an informed citizen.
https://www.cnbc.com/2021/06/08/biden-administration-announces-plans-to-strengthen-critical-supply-chains.html
https://www.defense.gov/News/Releases/Release/Article/2418542/dod-announces-rare-earth-element-awards-to-strengthen-domestic-industrial-base/
Still got to get use of the rail line to the south. If those communities hold fast, theses idiots will be long gone before anything moves again on that rail line.
Why would they be against it? They would negotiate lease agreement that both sides are happy with, transport by rail is significantly safer, more efficient, and has less environmental impact than using trucks.
Seems to me that no one is talking about the fact that someone else owns the material they are planning on taking down the rail that hasnt run in years there are way to many unanswered questions and a lot of dollars to be spent something really fishy smelling here
On behalf of Adirondack Wild, I am not a great fan of ripping out the rails between North Creek and Tahawus, nor do I feel that once ripped out, a future rail-trail between North Creek and Newcomb would blend peacefully into the forest. It could readily become a legal or defacto mechanized corridor, with many opportunities to spur off it, illegally. If Doc N’ Dutchess LLC can feasibly move Tahawus aggregrate via the spur rail line again and reduce the truck traffic out of Newcomb, I think those are positives.
I skied from upper works a couple times this winter. There was one other car in the parking lot. The area is as spectacular as the heavily used northern high peaks. The state is putting effort into getting people to enter the high peaks from the south. People will come. There is so much more that can be done to create opportunity. Why isn’t there internet up there yet? There are many excuses which add up to our legislator being unfocused on the needs of residents of Newcomb and visitors If you want something done, it can get done.
There are many very bright people working on Wilderness issues.
Clean air, solitude, clean water, mountains, peaceful places are shrinking.
The wild character becomes more valuable by the day. Plans from folks who have a profit motivation by using or taking something from the land, instead of offering to the land to benifit the natural charactor and people, need to be questioned.
This is the Adirondack Park. A jewel on this planet.
Also, the tourist train idea is ridiculous.
It’s a very very bygone issue. If these folks say they want to try to revive it, you have to question if they are being honest. Thank You.
Well said.
It should certainly be questioned.
The real objective seems to be to move the tailings to a place where they can have the valuable minerals extracted from them, The cost of transportation of material, often cuts into the profits too much to make it worthwhile.
They will likely work out shared usage with the bike rail company, the tourist train is probably just to make their business sound like it will bring tourists, especially since the government clearly wanted the rails used and maintained for trains. They will have engines and employee’s, they could probably do some tours and not lose money.
Their operations should be held to a very high standard in all respects, and they should have to show proof of compliance.
Assuming they do, I wish them luck, getting valuable materials in an environmentally responsible manner, is much better than importing them
Question everything, question those who question, and question those who do not.
Rare Earths Mining
When you include electric vehicles in the renewables and electrification equation, the demand for rare earth minerals needed for both batteries and magnets increases.
Rare earth minerals are a highly valued commodity. China currently controls 80% of the world’s resources and refines most of the rare earth minerals mined in the world. This in and of itself is not an issue unless rare earth minerals become politicalized, which occasionally they do. In 2010 China restricted rare earth mineral shipments to Japan. It is entirely possible this could happen to the United States or Europe as well if China deems rare earth minerals to be a strategic commodity. The United States currently gets about 80% of its rare earth supply from China, so a disruption in the supply chain would have a serious impact.