Exxon to Receive Royalty on Crandon Mine Profits

Exxon, despite selling its half interest in the proposed Crandon mine to Rio Algom, will retain a 2.5 percent royalty interest in future mine profits. This deal, finalized last week, involves Exxon receiving $17.5 million upfront, an additional $5 million if the mine begins operation, and the royalty interest. The mine's operator, Rio Algom, will have full control over the development and operation of the mine. The royalty interests of other companies are publicly disclosed in Forest County records.

Key Takeaways:

• Exxon retains a 2.5 percent royalty interest in future profits from the Crandon mine despite selling its half stake in the project.
• The royalty interest was granted as part of the terms of the sale to Rio Algom, which paid Exxon $17.5 million upfront and has committed to an additional $5 million if the mine begins operation.
• Dozens of other companies have similar royalty interests in the mine, with varying percentages disclosed in public records.
• Exxon has no day-to-day control over the mine's development or operation due to the sale.
• Rep. Spencer Black questioned the terms of the sale, citing previous estimates of the mine's ore value at up to $4 billion.
• Mining company official Dale Alberts disputed the $4 billion figure, citing "high operating costs" and a lower return on investment.

Statistics:

• Exxon will retain a 2.5 percent royalty interest in future mine profits.
• The sale of Exxon's half stake in the Crandon mine was completed last week for $17.5 million upfront, with an additional $5 million paid if the mine begins operation.
• The estimated ore value of the mine was previously estimated at up to $4 billion, but disputed by mining company officials as a return on investment.

Sources:

• Alberts, Dale (official speaker for Crandon Mining)
• Rep. Spencer Black, D-Madison
• Exxon
• Rio Algom
• Crandon Mining