PolyMet gets Minnesota's OK to proceed on massive copper mine

The closed LTV Steel taconite plant
The closed LTV Steel taconite plant remains abandoned near Hoyt Lakes, Minn. However, the site, which closed in 2000, could see new life as a part of Minnesota's first copper-nickel mine owned by PolyMet. Polymet now has permission to begin the permit application process.
Jim Mone | AP

Updated 4 p.m. | Posted 1:55 p.m.

The Minnesota Department of Natural Resources has given its final blessing to the complex environmental analysis of the PolyMet mine, paving the way for the company to begin applying for permits for the controversial proposed copper-nickel mine in northeastern Minnesota.

The agency declared that the 3,000-plus page final environmental impact statement for the project is "adequate," a bureaucratic determination that signals the end of the state's portion of the environmental review.

For the past decade that process has pitted conservationists concerned about the potential for severe water pollution against Iron Range communities desperate for an economic jump-start.

It's a crucial milestone for PolyMet, which wants to dig and process copper, nickel and precious metals for 20 years at its deposit known as the NorthMet deposit. It's part of the Duluth Complex, a rich vein of minerals that stretches from Duluth north to the Canadian border.

The environmental report will form the basis of the applications the company can now file for more than 20 federal, state and local permits to build the mine near Babbitt and processing facility near Hoyt Lakes.

DNR officials described it as the agency's largest-ever environmental review.

A storage building stands empty.
A storage building stands empty at the closed LTV Steel taconite plant near Hoyt Lakes, Minn. The local economy never fully recovered after the mine and its processing plant shut down in 2000, leaving 1,400 workers unemployed.
Jim Mone | AP

"The environmental review process is about describing the potential environmental effects of the proposed NorthMet project," DNR Commissioner Tom Landwehr said in a statement. "We are confident this document has thoroughly examined the important environmental topics and has addressed them."

PolyMet applauded the decision, saying the DNR's findings confirm the project can be built and operated within state and federal rules.

Company CEO Jon Cherry called it a "historic event for Minnesota, the Iron Range, and for PolyMet."

Minnesota DFL U.S. Rep. Rick Nolan agreed. "This is an important step for a project that will bring hundreds of good jobs to our region while sustaining the integrity of our rivers, lakes and land," he said in a statement.

Union and business supporters of the project say PolyMet would provide a much needed jolt to the regional economy.

The ongoing downturn in the iron mining industry has led to the loss of around two thousand of the best paying jobs on the Iron Range. PolyMet is projected to create 500 construction jobs and 360 full-time positions.

But today's decision does not guarantee the mine will be built.

PolyMet must first secure an estimated $600 million in financing to build the mine at a time when metals prices have plummeted. Its largest owner, the Swiss mining conglomerate Glencore, lost $5 billion last year.

The U.S. Forest Service and Army Corps of Engineers must also sign off on the final environmental review. Those final "records of decision" are needed for PolyMet to swap more than 6,000 acres of private land with land in the Superior National Forest at the proposed mine site, and to acquire permits to replace wetlands that will be destroyed by the mine.

The Forest Service is expected to issue its final decision on the land exchange in late spring. The U.S. Army Corps of Engineers' process will take longer.

Closed LTV Steel taconite plant
Environmental groups and area Indian tribes worry that PolyMet's approval could pave the way for other proposed mines in the region. This Feb. 10, 2016, photograph shows the closed LTV Steel taconite plant near Hoyt Lakes, Minn. The plant could return to life as part of PolyMet.
Jim Mone | AP

The adequacy determination also opens the window for expected lawsuits.

Environmental groups and area Indian tribes have filed hundreds of pages of comments highly critical of the environmental analysis performed by the DNR and its federal partners.

They argue the document relies on flawed data provided by PolyMet contractors, underestimates the potential water pollution from leftover mine waste and abandoned mine pits, exaggerates the ability of the company's engineering plans to capture and treat polluted water before it escapes the mine site, and failed to consider more environmentally friendly options.

They also worry that approving PolyMet could pave the way for other proposed mines in the region. Several other companies are exploring for copper, nickel, gold and other metals in a broad area stretching from just south of the Boundary Waters Canoe Area toward Duluth and Aitkin County.

"Minnesotans don't believe that the international mining companies that own PolyMet will effectively keep their mining pollution from leaking into the St. Louis River, the largest tributary to Lake Superior, for the next 500-plus years that will be required," said Steve Morse, executive director of the Minnesota Environmental Partnership.

"No operation of this type has operated and closed without polluting nearby lakes, rivers, and streams," Morse said.

But DNR officials say the final environmental review shows that PolyMet's plans to control pollution are strong enough to protect the water-rich environment of the state's Arrowhead region.

The project's original environmental impact statement, released in 2009, was largely criticized. The federal Environmental Protection Agency assigned it a failing grade.

PolyMet then made major revisions to its mine plan, proposing among other steps to build a containment wall around the mine tailings disposal basin to prevent seepage of polluted water, and treatment plants utilizing reverse osmosis technology to treat water before releasing it into the environment.

Those and other changes satisfied state regulators. Last November, when the DNR released the final EIS, Landwehr said, "The project as proposed meets state standards...to maintain a safe environment for people and the environment."

But major differences of opinion remain.

For example, opponents believe polluted water from the open pit mine will flow northward toward the Boundary Waters Canoe Area Wilderness. PolyMet and state scientists maintain water will remain in the Lake Superior watershed.

"We're talking about a water treatment model that's based on faulty data that the company built and the DNR has never independently verified," Minnesota Center for Environmental Advocacy attorney Kathryn Hoffman said in November. "There's a lot to be concerned about here."

Today's decision triggers a 30-day judicial review period, during which time project opponents can file challenges to the adequacy of the EIS at the Minnesota Court of Appeals. Opponents could also file legal challenges to permits when they're approved.

Before the company can begin to apply for state permits, the Minnesota DNR will hold a pre-application meeting with the company and a public meeting where it will take additional citizen input.

Gov. Mark Dayton has also signaled he'll be actively involved in the state's decision whether to issue PolyMet the permits it needs to proceed. He's said he wants to hire an independent firm to study PolyMet's finances.

A final permit to mine must also include a "financial assurance" plan that would provide likely tens of millions of dollars to pay for environmental mitigation measures after the mine closes. State regulators have said that proposal will go out for public review.

At this point, the DNR has not received permit applications from the company and thus the agency is unable to estimate timelines for permit decisions.