If I have 3 MT's out, and I develop a zone, do I draw 3 or do I just draw 1? In my mind it could go either way. You use the Action on the card to play one development and draw one. But on the other hand it does say "When" so do all trigger and you draw 3? Seems overpowered if that is the case.

You draw 3 cards. Playing a development triggers the action once for each instance of Mining Tunnels. Its the same as something like Dwarf Ranger, each one you have in play triggers every time another Dwarf leaves play. Also similar to Abandoned Mine in the FAQ sticky:

Q. If i have three copies of Abandoned Mine in play, at the beginning of my turn can i trigger each Abandoned Mine to take a total of 3 developments back into my hand?

A. Yes (official FAQ, Errata: Actions).