PolyMet applied to open its copper-nickel mine: Now what?

A storage building stands empty.
In this photo taken Feb. 10, 2016, the storage building stands empty at the closed LTV Steel taconite plant that is abandoned near Hoyt Lakes, Minn.
Jim Mone | AP

PolyMet has filed a permit application to mine copper, nickel and precious metals at a site located just north of Hoyt Lakes in northern Minnesota's Superior National Forest.

The permit application, submitted to the state Department of Natural Resources, follows a long environmental review process. The project's Environmental Impact Statement generated more than 50,000 comments, and hundreds of Minnesotans testified for and against the proposal at several public hearings.

PolyMet's mine would be the first copper-nickel mine in Minnesota, so its permit application will be closely scrutinized by state officials and environmentalists concerned about water pollution and assurances that cleanup funds will be available should the company go bankrupt.

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Isn't this old news?

No. PolyMet's Permit to Mine is a new application. At over 15,000 pages, it's the most significant of the more than 20 permits PolyMet needs in order to open the mine. Others include air quality, water quality and wetlands.

Earlier this year, the DNR deemed the mine's Environmental Impact Statement adequate, meaning PolyMet officials could start applying for permits. But the permits include more detailed plans than the ones laid out in the impact statement, and government officials must sign off on each of those plans before PolyMet can proceed.

What does PolyMet hope to get out of this mine?

PolyMet wants to mine copper, nickel and precious metals for 20 years at the NorthMet Deposit. It's part of what is known as the Duluth Complex, which stretches from about 150 miles north from Duluth to the Canadian border and is considered one of the biggest copper-nickel deposits in the world.

PolyMet's mine would tap into just a small part of that, with the possibility of expanding later. The company's goal is to produce 72 million pounds of copper, 15 million pounds of nickel and 106,000 ounces of precious metals annually.

The company expects the project will create 360 full-time jobs, in addition to roughly 1,000 temporary construction jobs. A University of Minnesota-Duluth study predicts the project will create an additional 600 spin-off jobs.

What environmental effects will this mine have on the area?

PolyMet plans to capture and use reverse osmosis to treat wastewater from its processing plant and the mine site. The Environmental Impact Statement found the approach would allow the company to meet all state and federal water quality standards, including Minnesota's wild rice sulfate standard.

PolyMet would also repurpose the old LTV plant in Hoyt Lakes for processing.

But the proposed mine would destroy more than 900 acres of wetlands in an area that is currently part of the Superior National Forest. To make up for the loss, some 1,600 acres of wetlands would be created or restored elsewhere, and PolyMet is negotiating a land exchange with the U.S. Forest Service to ensure the Superior National Forest doesn't shrink.

It should be noted, though, that environmental groups have criticized the Environmental Impact Statement and argue it underestimates potential water contamination and other problems.

Are there other mines like this?

The Eagle Mine in Michigan's Upper Peninsula is a recent example of a nickel mine. But it's different from PolyMet because it was built underground. PolyMet's mine would be an open pit.

The Eagle Mine has also faced opposition from environmentalists, but owner Lundin Mining is looking at expanding the mine. While there are dozens of open-pit mines out west, Minnesota's water-rich environment makes for a difficult comparison.

What are the costs and benefits of allowing PolyMet to open a mine?

The mine would generate about $15 million a year in state and local tax revenue, according to the University of Minnesota-Duluth study. That's in addition to other economic benefits such as jobs and a return on investment for PolyMet investors.

The main potential costs the state of Minnesota must consider are environmental damage and the possibility of having to oversee cleanup of the mine in the future.

The latter concern is addressed through a provision in the Permit to Mine called financial assurance. It's the company's plan to pay for cleanup in the event something goes wrong or the company is sold or goes bankrupt.

Financial assurance became standard after mines in other states left messes for government officials to clean up, and several mines in the West are now federal Superfund sites. State officials will be scrutinizing PolyMet's financial assurance proposal, especially given that the environmental study indicated water treatment could be needed at the site long after the mine closes.

What's next?

PolyMet's Permit to Mine application will be reviewed by the DNR, which will also hold public hearings on the proposal.

Meanwhile, several other things are in the works for PolyMet. The U.S. Forest Service still needs to approve the Superior National Forest land exchange, and the U.S. Army Corps of Engineers must evaluate the Environmental Impact Statement and grant a wetlands permit.

Lawsuits are also expected if the U.S. Forest Service approves the land exchange or at other points in the process.

In short, there are a lot of moving pieces, and PolyMet is still likely many months, if not a couple of years away from being able to break ground on the mine.