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Three new cases expand the challenges to land exchange for PolyMet project

Turns out there are privately owned mineral rights in the land that would be added to Superior National Forest, too.

One lawsuit claims that the U.S. Forest Service and U.S. Fish and Wildlife Service failed to meet their obligations under the Endangered Species Act to adquately assess and mitigate the project’s probable impact on the Canada lynx and other species.
REUTERS/Leonhard Foeger

As no new lawsuits have been laid across the path of the PolyMet mining project this week, let’s catch our breath and review the flurry of recent filings that quadrupled the number of challenges to four in the space of a couple of days:

  • A lawsuit filed March 28, which claims that the U.S. Forest Service and U.S. Fish and Wildlife Service failed to meet their obligations under the Endangered Species Act to adquately assess and mitigate the project’s probable impact on gray wolves, Canada lynx and the northern long-eared bat in the Superior National Forest.
  • Two new lawsuits, filed March 27, which partly reiterate but also expand on an earlier challenge to the Forest Service’s appraisals of land in an exchange critical to PolyMet, arguing that the values are so unreasonably low that the result is a ripoff for taxpayers and a “sweetheart deal” for the company.

The appraisals issue was first raised in a lawsuit filed at the end of January by WaterLegacy. As I wrote at the time, this case seems potentially more problematic for the Forest Service — and therefore for PolyMet — than traditional environmental objections because it raises such a fundamental, nontechnical question of public interest:

Are we taxpayer/owners getting fair value in this exchange, where the appraised value is a mere $550 per acre — or is PolyMet the beneficiary of a gift at our expense, given sales data suggesting the figure should have been many times higher?

If a court should agree that the Forest Service erred in having the acreage appraised as timber land — instead of for a mine producing a 20-year stream of copper, nickel, platinum and other precious metals — PolyMet would face a large and intricate problem that it couldn’t solve by simply writing a check.

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The government can trade away this land only for more land, not cash. Therefore, PolyMet would have to find additional land, of sufficient quantity and quality, and in the right locations, such that its addition to the Superior would advance the service’s management goals for the Superior.

Flunking the ‘smell test’

I’m not the only journalist to see the situation this way. In mid-March the Timberjay newspaper of Ely and Tower, which follows sulfide mining issues as closely as anybody, said the $550 per acre valuation “simply doesn’t pass the smell test”:

PolyMet officials should be livid. The company’s plans to open their copper-nickel mine near Hoyt Lakes could run aground as a result of a federal appraisal for their land exchange that is quite simply a head scratcher. …  

Under federal rules, public lands have to be sold for their appraised value, but that is supposed to be based on a fair market price, and what the market will bear is typically determined by comparable sales. Those rules were put in place to prevent “sweetheart deals,” which is exactly the accusation in this case.

One thing is for sure, no private landowner in a similar situation would let lands sitting atop a multi-billion-dollar mineral deposit go for $550 an acre. Nor would they exchange their valuable mineland acre-for-acre for run-of-the-mill timberland, much less for the thousands of acres of swamp near Hay Lake, north of Virginia, that the public is actually receiving from PolyMet. Not in a million years.

PolyMet needs the land exchange in order to access minerals it owns below the surface. That’s because the land came into the national forest in the early 1900s via the Weeks Act, which prevents the government from allowing a surface mine of the type PolyMet proposes.

The Forest Service has said it supports the exchange partly out of concern that if it turned PolyMet away, the company might bring a court challenge that would invalidate the Weeks Act itself.

While WaterLegacy based most of its lawsuit on alleged violations of the Federal Land Management Policy Act, one of the cases filed March 27 — by Save Our Sky Blue Waters, the Save Lake Superior Association and the Sierra Club’s North Star Chapter — asserts that the exchange would also violate the Weeks Act, as well as the National Environmental Policy Act.

Minerals in new land, too

It turns out there are privately owned minerals under the land PolyMet proposes to trade for the NorthMet acreage, and the Weeks Act also prohibits the Forest Service from accepting land “in which there are reserved or outstanding interests that would interfere” with its use and management for public purposes.

The risk, the plaintiffs suggest, is that the new land could attract interest from mining companies at some future point — and if the proposals were for deep mines, rather than surface mines, the Weeks Act would offer no basis for blocking them.

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As to the likelihood of this happening, the lawsuit challenges the Forest Service’s finding that the mineral value, therefore the likelihood of a future mining attempt, appears to be low. It points out that there are many active mineral leases in the same areas, some of which have seen recent exploration drilling.

The lawsuit also alleges a number of additional procedural violations in the Forest Service’s handling of the land exchange, as does another complaint filed the same day by the Minnesota Center for Environmental Advocacy, the Center for Biological Diversity and the Izaak Walton League’s W.J. McCabe chapter.

Both also argue that the decision to approve the land exchange is premature, and that under federal law, the Forest Service should not have considered the proposal until PolyMet had obtained necessary state and federal permits to commence mining.

Habitat protection issues

The third new lawsuit is focused not on appraisals but the more traditional, and technical, territory of what the Endangered Species Act (ESA) requires of the Forest Service and the U.S. Fish and Wildlife Service in evaluating a proposed land exchange.

Brought by the Center for Biological Diversity (CBD), Save Our Sky Blue Waters and Earthworks, the complaint says the agencies flunked the test of “arbitrary and capricious” decisionmaking in concluding that the NorthMet project would have only minor impact on three ESA-protected species: gray wolves, Canada lynx and the northern long-eared bat.

The ESA requires the Forest Service, in consultation with the Fish and Wildlife Service, to assess the impacts of projects like NorthMet on protected species. Also, to avoid actions “that result in the destruction or adverse modification” of places that have been designated as “critical habitat” for those species.

As nearly all Minnesotans know by now, gray wolves were among the first creatures listed for protection back in 1967, but the state population rebounded to a point where they came off the list in 2012 — only to be returned by court order two years later. All of the Superior National Forest is designated as critical habitat for wolf recovery.

The Canada lynx has been designated as a threatened species since 2000 and most of the 200 or so thought to remain in Minnesota are in the northeastern Arrowhead region — one of just six “core areas” nationwide, and the only one in the Great Lakes Region.

Most of the Superior was designated as critical lynx habitat as well, but there was a carve-out for a so-called “mining district” where the forest had been cleared for earlier mining activity; this includes the site of the NorthMet processing plant but not the mine itself, which would be in critical habitat.

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The northern long-eared bat went on the ESA list as threatened in 2015, but because the main threat is the fungal disease known as white-nose syndrome, the Fish and Wildlife Service decided against designating critical habitat. Instead, it issued a so-called 4(d) rule that prevents certain bat-threatening activities near known breeding or hibernation sites (an approach CBD has  challenged as inadequate).

By CBD’s calculations, “The PolyMet mine would directly destroy nearly 4,000 acres of habitat for wolves and lynx — including 1,719 acres at the proposed mine site — with open-pit mines, waste rock stockpiles and mining infrastructure. Most of the destruction would be permanent.” Then there are the additional roads and rail lines that would be built in surrounding areas, significant because this raises the odds of a wolf or lynx becoming roadkill.

CBD raises a long list of objections to how the agencies did their jobs in assessing the PolyMet impacts, most of them highly technical, but the gist of the allegations is simple: The impacts of habitat loss were brushed aside, probable losses in all three protected species were understated, and the responsibility to find ways of making the project less harmful was essentially ignored.

It is anybody’s guess how the Forest Service will respond to these cases in court, but in the meantime it’s following its policy of not commenting on litigation.

PolyMet is not actually accused of misconduct in these cases, and is on record as saying it is confident the federal agencies acted appropriately in the land exchange.