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Mining company to explore for lithium near Hill City

A mining company is going to explore for more lithium near Hill City.

Last month, the company announced it was going to explore for the mineral near Keystone. The new exploration project is larger.

The company, SDO Services, which is a subsidiary of Midwest Lithium, wants to drill up to 80 exploration holes across 16 drill pads.

The location of the exploration project is a quarter mile south of Hill City.

Location of the SDO Services exploration site near Hill City
Location of the SDO Services exploration site near Hill City

Michael Schlumpberger, a general manager with Midwest Lithium, said having a second exploration project is advantageous.

“This, again, is a past-producing asset. In fact, it was one of the last lithium-producing mines in the Black hills, so we know that there’s lithium there. We know that lithium has been produced there, so we’re pretty excited about it.”

The company is also looking to explore for lithium by the old Ingersoll Mine near Keystone. There, the company will drill 55 holes across 11 pads.

The move is part of an increased interest in minerals in the Black Hills. The annual number of new mining claims has increased 18-fold since 2019.

Schlumpberger said he hopes the projects are the start of a long relationship with the state.

“The last thing we want to do is bugger things off," Schlumpberger said. "We want to come in and show South Dakota that we can do just a top-drawer job so that we can be a mining company of choice.”

Schlumpberger said there’s no start date yet for the two exploration projects.

The state has no tax for minerals like lithium. The state only taxes gold and silver, as well as energy minerals like coal, natural gas and uranium.

In the Black Hills, most lithium is found in hard rock called spodumene, which is located in pegmatites. State law only requires an annual $100 permit to mine pegmatites, which is in the same classification as gravel and sand.

Efforts to establish a lithium tax stalled last session. Nearby states have a catchall mining tax for minerals extracted from the ground.

Lee Strubinger is SDPB’s Rapid City-based news and political reporter. A former reporter for Fort Lupton Press (CO) and Colorado Public Radio, Lee holds a master’s in public affairs reporting from the University of Illinois-Springfield.
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