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Review of PolyMet Mining project finds treatment, and costs, lasting centuries

Minnesota DNR
The plan for the NorthMet mine site at year 20, when extraction operations are projected to end. Sulfides in waste rock at the mine site will need to be contained and treated for an additional 200 years. Click for larger version.

Not so many years ago, when he was still chairing the Metropolitan Council and I was scribbling editorials for the Star Tribune, Peter Bell got my attention by suggesting that maybe much of the cost and complication of environmental regulation could be displaced by insurance.

In place of large compliance bureaucracies, in government and industry alike, he thought societies could simply adopt environmental standards and penalties, then require companies to carry coverage in the form of liability policies, performance bonds and other instruments to pay their fines and repair the damage if they screwed up. [Disclosure: Bell now serves on MinnPost’s board of directors.]

The real beauty of it, he said, was that bad companies and bad ideas wouldn’t be able to find a carrier to share the risk. Thus, much environmental malfeasance could actually be prevented, not merely policed and punished after bad deeds had already been done.

Because Bell has always impressed me as a smart man and a principled conservative, I was intrigued by this notion, and we talked for a while about who would underwrite such coverage — Lloyd’s came to mind, of course — and how the risks would be assessed and premiums calculated, etc. 

Then we moved on to the real subject of our meeting, long ago forgotten. But Bell’s idea has rattled around in memory ever since, waiting for me to decide whether to file it under “Brilliant” or “Blithe,” and it came instantly to mind with the release of the new environmental assessment of PolyMet Mining Inc.’s NorthMet project on Friday.

In NorthMet, which proposes to mine and process copper, nickel and other precious metals on land now within the Superior National Forest, Minnesotans may be approaching a huge and high-stakes test of something very like the insurance idea, at sites within or near the state’s most treasured boreal wilderness areas.

Plenty of regular, old-fashioned policing will apply to PolyMet’s construction, operation and closure of the mine, where ore is projected to be dug for about 20 years. And while this kind of hard-rock mining of sulfide ores is new to Minnesota regulators – and very different from taconite, gravel or frac-sand mining – the basic work of regulating dust, noise, excavation and water discharges is certainly familiar.

500 years of treatment

What distinguishes the NorthMet project is the certainty of long-term acid formation and drainage as air and water act on sulfides in the waste rock, which will have to be contained and treated at a cost estimated to run $3.5 million to $6 million a year. For the purposes of the Supplemental Draft Environmental Impact Statement (SDEIS) issued on Friday, “long-term” means 200 years at the mine site and 500 years at the processing plant.

Those stunning figures, which leaked a few weeks in advance of the DEIS release, have prompted some back and forth in media accounts as to whether they are minimums or maximums. My reading is that they are neither:

The duration of the simulations was determined based on capturing the highest predicted concentrations of the modeled NorthMet Project Proposed Action. It is uncertain how long the NorthMet Project Proposed Action would require water treatment, but it is expected to be long-term; actual treatment requirements would be based on measured, rather than modeled, NorthMet Project water quality performance, as determined through required monitoring.

In other words, nobody yet knows how long water at the mine and plant could require treatment, and nobody will know until water at the sites has been subjected to actual treatment and monitoring. But some number had to be selected for the impact assessment to go forward.

You might ask, Why don’t they just assume the water will need to be treated forever? Excellent question, for which the answer is: Minnesota law prohibits permits to mines that will require “perpetual” maintenance after closure.

You might then ask, Who is going to pay for hundreds of years of water treatment? Yes, well, the answer to that one is still blowing in the wind.

What kind of assurances?

The DEIS says regulators will seek “financial assurances” from PolyMet to pay the costs of treatment in centuries to come, but discussion of the specifics has been deferred for now.  Although the U.S. Environmental Protection Agency reportedly pressed to have it addressed at the DEIS stage, the Minnesota Department of Natural Resources and its federal partners elected to kick it down the road to the permitting process, which will follow adoption of a final EIS, which will follow a 90-day public-comment period that begins next week.

Personally, I’m eager to see what kind of financial instruments are considered sure to endure some five centuries into the future.

This is probably as good a point as any at which to disclose that in 2007 and 2008, as executive director of Friends of the Boundary Waters Wilderness, I made it my top priority to spur the Friends group into action as a challenger to the PolyMet and other mining projects. Also, to urge allied organizations to join us in abandoning what had been a perplexingly relaxed posture on this issue in Minnesota’s environmentalist community.

That history has made it a little complicated for me to come back to the subject as a journalist, because I recognize that some readers simply won’t be able to accept that I can be fair- and independent-minded on these issues.

To those folks I would simply say that my views of hard-rock mining and its hazards were formed as a journalist, not as an activist – and long before I went to work at Friends – in a series of visits to mining disgraces in the Western U.S. (For one example, consider the Berkeley Pit in Butte, Mont., well worth a stop if you’re driving across the Treasure State.)

The position I advocated at Friends, and advocate now, is that Minnesota agencies ought to withhold permits from any sulfide mining operations unless they can demonstrate proven ability to operate and close down their operations without lasting environmental harm beyond the scope of their permits — and back up their promises with ironclad financial guarantees to protect taxpayers.

I know that some thought this was a disingenuous position on the Friends’ part – that in reality, we were opposed to any and all mining near our precious wilderness retreats and were simply unwilling to say so.

Speaking only for myself now, I can say that’s not the case. I could readily support a mining project that meets these tests, and I think it’s possible that PolyMet will do so – though much remains to be seen, of course.

Impressive technologies

I have toured the NorthMet sites with company officials and come away highly impressed with the technological advances that seem to be within their reach. I’m delighted to think that the old LTV/Erie plant at Hoyt Lakes could be repurposed by PolyMet, converted from countless tons of silent scrap metal into something vibrant and valuable for the Iron Range.

Minnesota DNR
PolyMet’s proposed mine is located near Babbitt and the processing plant would repurpose U.S. Steel’s former plant in Hoyt Lakes. Click map for larger version.

I’m willing to be persuaded that newer mining technologies and stronger environmental commitments could make the PolyMet project a dramatic departure from hard-rock mining’s terrible history of lasting harm in this country and others.

But that’s what mining companies always say, and I’ll admit that PolyMet’s credibility with me took another hit recently when officials tried to downplay the company’s interest in having the Hoyt Lakes plant handle ore from other future mines in the area, whether operated by PolyMet or by other companies that would do their own digging and pay PolyMet to do the processing.

When I toured the plant site in 2008, company officials described this as a key part of their business plan, and it only makes sense: Do we really want every mine to have its own processing plant?

plant site
Minnesota DNR
The plan for the PolyMet processing plant at Hoyt Lakes. Click for larger version.

And yet, when a PolyMet-commissioned report on the subject surfaced late last month in the Star Tribune, with predictions that the company’s metals production could double or triple beyond the scope of the NorthMet project within a couple of years, company officials said such scenarios were “not part of our discussions around here.”

I can’t imagine whom they thought they were kidding with that obvious dodge. On the other hand, the story served to underline this key reality that should be kept in mind as the PolyMet process goes forward:

The NorthMet project is only the first proposal in the regulatory queue for a sulfide-mining boom that could easily grow to a dozen projects or more, and involve active mining for many decades to come, with each mine creating a treatment problem stretching centuries into the future. And the regulatory decisions on NorthMet will set a pattern for the others.

* * *

The Supplemental Draft Environmental Impact Statement for the NorthMet project is available here, along with related materials and information from the Minnesota DNR about the public comment process that runs from Dec. 14 through March 13.

Comments (19)

  1. Anonymous Submitted by Anonymous on 12/10/2013 - 10:04 am.

    What combination of hubris, greed and desperation would possess a state like Minnesota – with its valuable water resources – to despoil that same water for 500 years for 20 years worth of jobs?

  2. Submitted by Mike Supina on 12/10/2013 - 10:21 am.

    I am very curious…

    …to see how a legal and financial regime could be structured that will function for 500 years. Does it have to be inscribed onto stone tablets?

  3. Submitted by Sean Olsen on 12/10/2013 - 12:04 pm.

    The answer, of course, would be to require PolyMet to pay big $$ while the mine is in operation. $3.5M for 500 years is $1.75B (assuming no inflation), so the bare minimum starting point should be $87.5M annually.

  4. Submitted by Steve Titterud on 12/10/2013 - 01:00 pm.

    What human endeavors have persisted for 500 years,…

    …with detailed, specific, planned and executed activities, consistently over the entire period ? In all of human history ?

    To think that PolyMet and the other parties, including the State of Minnesota are up to this fantasy is BEYOND RIDICULOUS !!

    Add to this that the 200 year, 500 year, or any other cooked up notion of duration is a pipe dream, as Ron points out above. There is no definitive period – in fact, it is due to the absence of any sound definition, as in –

    “uncertain…but…expected to be long-term”

    – that these numbers had to be cooked up as a placeholder, rather like those magnificent proceeds from e-pulltabs to finance the Vikings stadium.

    And what would we take all this risk for, all the certain degradation of the water resources involved ?

    For 300 jobs over 20 years ? Who could possibly think this is worth it ? Only deranged champions on the Iron Range, and of course, PolyMet, who stands to flee the state in 20 years or so with a real bundle of profits.

  5. Submitted by Harris Goldstein on 12/10/2013 - 02:10 pm.

    I can answer that.

    You ask “Who is going to pay for hundreds of years of water treatment?”.

    The answer is not blowing in the wind, the answer is “us” – Minnesota taxpayers. To avoid getting into finance above my head, I’ll simplify it a bit.

    To achieve a return of $3.5 million in perpetuity, you would have to invest about $85 million today (assuming 4% real rate of return, which is high by today’s standards). Granted that’s in perpetuity, but it wouldn’t change much if your time horizon is 200 years.

    Will Polymet deposit $85 million up front with the State of Minnesota? Doubt it; $85 million is about 1/2 of Polymet’s net assets. Of course, if annual cleanup is $6 million, then roughly double that figure. (By the way, if Polymet did deposit that money, we’d probably just spend it like the tobacco bonds.)

    So then we get to Mr. Bell’s idea of insurance. Sounds great in theory, but no so great for unbounded, long term, risks. The most obvious parallel is AIG – how well did that work out? The Polymet scenario is somewhat worse than the AIG meltdown, since the time horizon is so unknown. Great temptation for any company to book immediate revenue when the risks are after we are all dead.

    None the less, the deal will go through. Because it trades tangible, immediate benefits (jobs) with a committed constituency for less tangible, long term environmental costs with a diffused constituency. The DNR will roll over and play dead.

  6. Submitted by Mike Supina on 12/10/2013 - 03:05 pm.

    Tsunami stones…

    …have been in place along the Japanese coast for centuries to mark where it was unsafe to build. Most were forgotten or ignored. “It takes about three generations for people to forget” according to Tohoku University’s Prof. Fumihiko Imamura.

  7. Submitted by Lance Groth on 12/10/2013 - 04:49 pm.

    We should simply run the other way …

    … from any endeavor that is going to require centuries of concerted clean-up programs.

    500 years, really? We don’t know if the state of Minnesota, or the United States, will still exist in 500 years (certainly Polymet will not), and if it does, whether it will still have the wherewithal to unswervingly maintain a project like this, regardless of political and economic conditions. The Roman Empire endured barely 500 years, and they had the advantage (in terms of stability and longevity) of the heavy hand of a monolithic imperial system during a period of only a glacial rate of change in human systems and technologies. The deck is very much more highly stacked against us in this era of warp-speed change, hyper complexity and interdependence of human systems (with correspondingly greater potential for catastrophic failures), and resource constraints. When in human history has a single project continued without interruption for five centuries?

    And for what, 300 jobs for Minn.? Microscopic benefit, stratospheric risk.

    No amount of money will compensate for the corruption of a relatively pristine environment – once done, it cannot be undone. If we go ahead with this, the consequences will be tragic and we will deserve them.

  8. Submitted by Ray Schoch on 12/10/2013 - 04:58 pm.

    Yet another case

    …of socializing the costs while privatizing the profits. Harris Goldstein is quite correct in assessing who will be paying to avoid disastrous environmental contamination. It’ll be the taxpayers — my grandchildren and their grandchildren, and perhaps several more layers of grandchildren, even if everything goes according to what seem to be rather nebulous plans.

    The only thing that humans have managed to do consistently and well over the course of multiple centuries is reproduce. To that I should perhaps add “delude public officials with visions of tax money and jobs.” The emphasis should be on the “delude” part. This won’t be like the California Gold Rush, with hills turned into piles of rock by hydraulic mining. This will involve the creation of known poisons, accompanied by the genuinely laughable notion that someone other than citizens relatively nearby will pay to prevent environmental catastrophe over decades and centuries.

    PolyMet will be a historical footnote in 200 years. The poison will still be with our descendants, who will not think highly of the venal and shortsighted public officials who approved this travesty.

  9. Submitted by patricia benson on 12/10/2013 - 07:23 pm.


    Peter Bell’s innovative solution was laudable from the 20th century capitalist model perspective. But insurance is an illusion, a promise of certainty in an uncertain world, where something big is always lost for an unwanted gain. The choices now are stark and clear if we take the time to reflect on our historic decisions regarding our wild lands and species, including humans, who depend on clean water and thriving landscapes. We must say no to PolyMet. Seven generations of preservation of our most vital resources is the minimum standard, not how much will it cost to clean up the mess we leave behind us. The choices are hard when people need jobs now. But we must stop enabling the death of our planet in the name of creating jobs. This is not about “living wages,” but about killing that which sustains ALL of us, downstream, in each and every watershed. We are so disconnected from our land, water, air, and food resources that we look at each issue, separate, threw the haze of consumerism. Be clear on who needs these metals and why, and then decide what you would be willing to give up in exchange for keeping the land and the waters alive and unmolested.

  10. Submitted by rolf westgard on 12/10/2013 - 07:23 pm.


    Long term acid rock drainage issues can be controlled with alkaline materials and other techniques. This is another case of uneducated public panic.

    • Submitted by Brian Nelson on 12/10/2013 - 09:37 pm.

      Then I suggest you educate us…

      How much will it cost? Has PolyMet included it in their plan? If not, why not?

    • Submitted by Ray Schoch on 12/10/2013 - 10:59 pm.

      Technically correct — and irrelevant

      Even those of us who barely survived high school chemistry know at least a little bit about acid and alkaline. Some minimal amount of explanation seems in order for your comment to carry any weight. What alkaline materials and “other techniques” are you suggesting would be adequate to deal with the potential for ecological disaster in this case? There’s no alternative to potable water. Unless used very carefully, “alkaline materials” can be just as harmful to the environment as acids. My personal objection to the PolyMet project has less to do with the pollutants that will be produced, though they’re significant, and your comment does nothing to allay public suspicion, than it does with the heavily documented and lengthy historical record of environmental damage created by mining companies all over the globe.

      Plenty of promises have been made about environmental “sensitivity,” but by now those promises, based on the record, have little credibility. Beyond that, even if PolyMet had a squeaky-clean environmental record, I’ll stand by my earlier suggestion. In two centuries, PolyMet won’t exist except in historical footnotes. Like many another resources-extraction company, once the profits dwindle, it will find a host of excuses to justify not living up to its promise to reclaim and rehabilitate the landscape and resources damaged by its activities. When things get really uncomfortable, or really expensive, or both, PolyMet will walk away. There’s no evidence on the historical record of more than a handful of corporations lasting more than a century, and none whatsoever of companies keeping cleanup promises hundreds of years into the future, long after the resource being sought has been depleted.

      Talk is cheap. It’s action that counts, and the actions of resource-extraction industries have dependably shown a disregard for the environment.

    • Submitted by Lance Groth on 12/11/2013 - 03:30 pm.

      Who will do it – for 500 years?

      Just who is going to be around for 100, 200, 300, 400, 500 years, to apply alkaline materials “and other (unspecified) techniques.” And how can you guarantee continued attention for all those centuries?

      You can’t, and neither can anyone else. That’s the core of the problem.

  11. Submitted by Joe Musich on 12/10/2013 - 07:58 pm.

    What happened around the world in 1513 ?

    Yes just like lead will contain nuclear waste! There’s just too many of us. But lately no one seems to be asking the question whether the species will ever deal with population control or will it deal with us ? Seems as if we are going with it dealing with us. So Google population 1513 which would be 500 years ago, examine population predictions for 500 years from now, throw in the extra millions of tons of co2 in the atmosphere with the new epa ethanol decision and factor over corporate greed to aquire natural resources coming to the surface due to global ice melt connected to climate change and multiple by volume of potable h2o remaining while we teach out to explore Mars!

  12. Submitted by Neal Gendler on 12/10/2013 - 09:05 pm.

    Benefit to risk ratio

    The world has a huge demand for copper — right now, anyway, even as copper communications lines are (slowly) being replaced by the more-effective fiber optic. But at the pace of technological change, who knows what the demand will be in 20 years?

    There’s a big economic benefit for PolyMet and he world at large by not leaving this resource unused in the ground.

    But the risk, the foreseeable environmental damage, seems to greatly outweigh the benefit. The damage lingers for centuries after the resource is exhausted.

    I cannot imagine any way of assuring environmental-protection resources for 200 or 500 years. Other than (vastly changed) nations and the Catholic Church, what companies, institutions or agencies remain from the year 1513?

  13. Submitted by Tom Anderson on 12/10/2013 - 09:05 pm.

    Why worry?

    Global climate change has us underwater and roasted within 100 years. If that proven science is wrong, perhaps in 500 years we’ll have a method to extract the mine products safely while cleaning the water at the same time.

  14. Submitted by mark wallek on 12/11/2013 - 09:57 am.

    Thye obvious result

    It’s clear that what the citizen will get is trashed useless land, polluted water and likely some disease that cannot be legally blamed on any pollution.

  15. Submitted by Eric Snyder on 12/11/2013 - 12:00 pm.

    300 jobs to rule them all, one mine to bind them…

    Like a runaway train, consumer/corporate capitalism is rushing ahead, heedless of nothing except its own imperatives, plowing through the earth’s finite resources at an accelerating rate.

    Prodded by the demands of investors who never have enough, the extraction industries (oil, coal, gas, minerals, timber) are in a frenzy to exploit what remains. The easy-to-find resources are either exhausted or on the way to becoming so. As a result, more environmentally dangerous and damaging practices are being employed. Corporate land theft, environmental recklessness, criminality, human rights abuses, and species endangerment stories are not at all uncommon occurrences in these industries. (Numerous examples are only a few clicks away.)

    Given the great timelines involved in this Polymet mining project, the uncertainties and environmental dangers, the extensive and well-known history of mining industry malfeasance, the endless repetition of the routine of fly-by-night corporate hustlers leaving the public to pay the cleanup bill–it’s amazing this proposal is getting serious consideration at all.

    And given this reality, it’s seems positively utopian to be talking about what we need to talk about if we’re serious about having a livable planet: Getting to an economic system that doesn’t waste (“Waste is a resource out of place.”), ending the fiction of eternal growth on a planet with finite resources, transcending the pathologies of consumerism, according ethical status/concern to future generations, and ending the ethical primitiveness that nature (animals, forests, species, ecologies, etc.) has no intrinsic value other than what unaccountable and ‘systems-blind’ corporations can get away with exploiting.

    Need more copper? How about we start thinking about the future. How about we stop our unbelievably wasteful practices? How about start employing ecological design principles in our state? How about we stop filling landfills in perpetuity and start using resources with at least a minimum of intelligence and wisdom? Is that too much to ask? Are we so crude in our social evolution that a few tax dollars and the apparent argument-ending chant of “Jobs!” will override every other consideration?

    • Submitted by Lance Groth on 12/11/2013 - 03:39 pm.

      Well said

      And this line, in particular, gets to the heart of it:

      “ending the fiction of eternal growth on a planet with finite resources,”

      We must get away from the insanity of the eternal growth model before it consumes us, and all other living things on Earth. The philosophy of endless growth is the philosophy of the virus, or the cancer cell. Let us not be a cancer on the face of the Earth.

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