Court rejects Minnesota's renewal of U.S. Steel mine permit

U.S. Steel's Minntac taconite mine and plant
U.S. Steel's Minntac taconite mine and plant looms over the city of Virginia in April 2015
Dan Kraker | MPR News 2015

Updated: 4:32 p.m.

The Minnesota Court of Appeals on Monday reversed a decision by state regulators to renew a wastewater discharge permit for U.S. Steel's giant Minntac iron ore mine in the northeast of the state.

The court sent the dispute back to the Minnesota Pollution Control Agency for further proceedings. The agency first issued the permit in 1987 and renewed it last year amid a protracted dispute over whether Minntac had to comply with a state law meant to protect wild rice beds by limiting discharges of sulfates.

Minntac's ore processing facility in the city of Mountain Iron includes a 13.6 square mile (35.2 square kilometer) tailings basin that holds mine waste and wastewater that's recycled for further ore processing. As as result, sulfate levels build up in the basin and water from it seeps into local ground and surface waters.

Minnesota law restricts discharges of sulfates into waters where wild rice grows to 10 milligrams per liter. But the state for years has allowed Minntac to exceed that standard. The Legislature in 2011 put enforcement of the existing standard on hold and ordered the MPCA to develop new standards. The agency commissioned extensive research and drafted a complex new set of sulfate limits, but an administrative law judge rejected them last year.

Monday's ruling came in a consolidated set of appeals by U.S. Steel, the environmental group WaterLegacy, and the Fond du Lac Band of Lake Superior Chippewa. U.S. Steel challenged the MPCA's denial of its request for a variance from groundwater quality standards, while WaterLegacy and the tribe argued that the state agency erred in its interpretation of the federal Clean Water Act and drafted permit conditions that didn't sufficiently protect surface waters.

Paula Maccabee, an attorney for WaterLegacy, said the complex ruling requires “that the MPCA go back and take a hard look" at whether Minntac's tailings basin is polluting surface waters in violation of the wild rice rule and federal law.

Maccabee also pointed out that all sides now have 30 days to ask the Minnesota Supreme Court to hear the case, and she wasn't sure what she or the other parties would do.

The Minnesota Center for Environmental Advocacy said in a statement that the court's ruling showed that the evidence failed to support the MPCA's decision that specific limits to prevent downstream pollution weren't necessary, but it also handed mining companies a win by preventing the state from enforcing groundwater standards.

The MPCA said in a statement that while it reviews the court's decision and assesses its next steps, the agency “will continue engaging with stakeholders to ensure the state’s groundwater and surface water are protected.”

Pittsburgh-based U.S. Steel did not immediately respond to a request for comment.